During the Federal Energy Regulatory Commission’s most recent open meeting, the Commissioners outlined steps that are being taken to protect Americans from rising electricity costs as data center development picks up speed.
As FERC and the Trump Administration work to unleash AI and American energy, one fact remains clear: natural gas can meet the moment while keeping costs low for consumers.
FERC outlines ways to protect consumers
FERC called upon all six regional power grid operators under its jurisdiction to justify or reform the rules governing how data centers and other large energy users connect to the electric grid. The mandate: speed up large load connection without shifting costs onto everyday ratepayers.
As FERC Chairman Laura Swett explained:
“We are setting the stage for a resilient, reliable, and forward-thinking grid that empowers communities and safeguards consumers.”
At the meeting, FERC Commissioners also agreed to reconsider a past order regarding co-location, a process where large loads like data centers are built alongside power plants. Co-location can help bring large loads online quicker because the sites are already served by long-distance transmission lines and, in many cases, natural gas pipelines that fuel generation. Given the challenges associated with building pipelines and new infrastructure of all types, having sites with existing supply can help meet rising demand efficiently.
The case for natural gas
The data center boom is showing up in real-time demand forecasts. The Energy Information Administration’s latest Short Term Energy Outlook links rising electricity demand directly to large computing facilities, with natural gas holding approximately 40 percent of the U.S. generation mix in 2026 and remaining the single largest source of power on the grid.
Data centers require reliable, dispatchable power. Natural gas is uniquely positioned to deliver it. Natural gas is not subject to the intermittency of wind and solar, making it the most practical fuel for meeting continuous, high-intensity load. America’s abundant domestic supply from basins across the country has helped insulate the United States from geopolitical conflict better than the rest of the world while still setting export records.
EIA Administrator Tristan Abbey put it plainly:
“Natural gas supply is critical as we forecast that U.S. liquefied natural gas exports expand and electricity demand rises through 2027, driven largely by increasing demand from large computing facilities, including data centers.”
Permitting challenges persist
Despite the clear case for natural gas, critical infrastructure still face obstacles. Insufficient pipeline infrastructure and prolonged permitting delays continue to constrain the buildout needed to keep pace with demand.
As a recent report from the Interstate Natural Gas Association of America found, meeting growing demand will require a major buildout of natural gas infrastructure, and enabling that buildout will require permitting reform. A coalition of major business groups, led by the U.S. Chamber of Commerce, recently called on policymakers to modernize permitting processes, noting that:
“Outdated and inefficient permitting processes stand in the way, delaying these investments and driving up costs.”
The Institute for Energy Research has made a similar point, arguing that rising electricity rates are less a product of data center demand itself and more a consequence of the regulatory bottlenecks strangling grid infrastructure:
“The machines aren’t the main problem. The red tape strangling the U.S. grid is. Remove it, and America can have both cutting-edge AI and abundant electricity.”
Bottom line: The data center boom is driving real load growth, and the United States needs reliable, scalable power to match it. While FERC is taking meaningful steps to ensure that growth does not come at the expense of everyday ratepayers, natural gas continues to provide affordable power for millions of Americans. Maintaining that reliability and affordability, as data centers get developed, will require building necessary infrastructure and transparent permitting reform.
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