A federal bill that would make data centers pay a larger share of the US transmission grid passed its first test in the Senate on Monday. Senators voted 73 to 25 on 9 November to begin debate on the Bipartisan American Affordability and Jobs Act, S. 5653, CNBC reports. The package also rewrites parts of the permitting rules for power plants and transmission lines. It still needs final passage in the Senate and approval in the House, and its backers hope to have it signed before the current Congress ends in January. The President has endorsed it.
What The Bill Asks Of Data Centers
The data center part is about pricing. According to TechTarget, the bill would require FERC to revise its transmission pricing policy so that utilities charge data centers both for their share of the existing network and for the extra costs of serving them, and use that money to lower transmission charges for other customers. A separate section, the Ratepayer Protection Floor, asks the states to deal with the costs that large computing loads put on generation, storage, transmission and distribution, including financial guarantees and continued liability if a large load leaves early.
On permitting, CNBC writes that the bill amends the National Environmental Policy Act, the National Historic Preservation Act, the Clean Water Act and the Endangered Species Act to speed up reviews of projects such as power generation, and changes how transmission lines are approved.
Grid Strategies Puts A Number On It
The consultancy Grid Strategies estimated on 2 November that data centers would pay about $55 billion in transmission charges over ten years under the bill, roughly $35 billion more than under current policy. The total splits into about $35 billion of embedded network costs and $20 billion of incremental costs. Per year that is around $5.5 billion, against roughly $2 billion that data centers pay today, TechTarget reports, and PJM and MISO would account for about 82 percent of it. The estimate rests on 40.3 GW of new data center capacity outside Texas, which is left out, and it assumes that new data centers take firm transmission service. If states apply the protection floor in full, the consultancy sees a further $136 billion of generation costs that could be recovered from data centers over the decade; TechTarget stresses that this is a possible exposure, not a forecast.
Not everyone thinks moving costs settles the matter. Neil Osnato of Persistence Analytics Group told TechTarget that utilities should insist on binding capacity commitments, financial security and early termination terms, because a law can decide who pays for a line but cannot make the data center's load appear.
Firm Service Gets Dearer, On-Site Power Gets A New Look
The part that matters for plant planners is the assumption about firm service. A data center that only draws curtailable power, or makes most of its own, would not produce those charges, and TechTarget notes that the bill could shift the economics of behind-the-meter generation. Rob Gramlich, president of Grid Strategies, expects on-site plants to add to grid supply rather than replace it. If that is how it plays out, engines and turbines next to the campus will be sized for long running hours and partial grid support, not only for the few hours a year of a classic standby set, and that changes what the cooling and the service plan have to be built for. Earlier items on the same trend include the tracker of gas plants built for data centers; the generator side is on our data centers page.
Sources: CNBC, TechTarget, Grid Strategies
