OPINION:
On the first full day of his second term, President Trump welcomed the leaders of three major U.S. tech companies to announce the launch of Stargate—a $500 billion private initiative to build data centers in the United States to power the future of Artificial Intelligence. The message was clear: The race for AI is on, and, as the president put it, “we want to keep it in this country.”
Only hours before, Mr. Trump declared a national emergency to address “an unusual and extraordinary threat” caused by barriers in the way of domestic energy production and infrastructure. “The integrity and expansion of our Nation’s energy infrastructure—from coast to coast—is an immediate and pressing priority,” the order states.
While most Americans won’t agree with a president on every issue, I believe Mr. Trump is clearly right about this issue. It is imperative that our country win the AI race, and winning will require the infrastructure to support the massive energy demands of next-generation technology.
Accordingly, the president and his team, including both Secretary of Energy Chris Wright and Secretary of Interior and Chairman of the newly formed National Energy Council, should pay attention to activity at the Federal Energy Regulatory Commission (FERC) that could imperil the President’s objectives for American energy dominance needed to win the important AI race.
Late last year, FERC issued a Notice of Inquiry signaling its intent to overhaul a longstanding policy of granting “blanket authorizations.” The framework, which has been in place since 2006, allows investors and funds to acquire shares in public utilities up to $10 million without requiring a case-by-case review by the Commission. Such investments are still bound by FERC’s thorough regulatory guardrails.
The Commission claims the potential rule change is a response to a “precipitous” rise in index fund investment—as if that were bad—and to prevent investors from consolidating controlling interest in utilities. In practice, however, it could choke builders’ access to capital and discourage the development necessary to secure and grow our energy grid.
The existing rule is intentionally robust and “rigorously regulated” to prevent an investor (or investors) from controlling a utility. And importantly, the blanket authorization allows passive retail investors to participate in America’s all-of-the-above energy renaissance through ordinary investment vehicles, like index and mutual funds.
Regulators should open the doors for investment into the U.S. energy grid, not close them, if we hope to build the resiliency to support leading-edge technology. Data centers require immense amounts of energy. A Goldman Sachs report projects that AI computing will create a 160% increase in data center electricity demand and that data centers will consume 8% of U.S. electricity by 2030. A Boston Consulting Group analysis pegs usage at double that figure, equal to two-thirds of all U.S. homes.
Investment in our energy infrastructure is already woefully behind. Seventy percent of the U.S. electric grid is 25 years old or older, making it vulnerable to severe weather events and cyber-attacks. Replacing old transmission lines will require $10 billion of investment each year, while bringing online renewable energy capacity and storage will take an additional $2.5 trillion by 2035. And that’s to say nothing of the pipelines, solar panels, wind turbines and other resources necessary to generate more power.
In Congress, I introduced legislation to expedite FERC’s regulatory review process and clear the backlog of projects awaiting approval. A lack of technical expertise and simple manpower at the agency contributed then to long wait times and extra layers of bureaucracy, which delayed permitting and often killed much-needed development in the crib. Those issues haven’t abated, and now to require common and largely passive transactions to receive a different form of FERC approval could further sap the organization’s already strained bandwidth.
The impact of the Commission’s proposed blanket authorization rewrite is predictable: Investors would take their money elsewhere, the cost of capital would increase, and infrastructure development would slow down. Those factors could drive up energy prices for everyday consumers and impede efforts to secure the United States’ position as a global technology leader.
I encourage President Trump—committed to cutting government redundancy and inefficiency— to direct FERC to conclude its inquiry and table any changes to the blanket authorization policy. This is a solution in search of a problem, and America’s energy independence and technological leadership could hang in the balance.
• Cory Gardner is an American attorney and politician who served as a United States senator from Colorado from 2015 to 2021.
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