Open Circuit

When tech giants build massive data centers to power AI, they're often negotiating confidential deals with utilities that few people will ever see — but that everyone might pay for. Harvard legal expert Ari Peskoe has uncovered a pattern across 40 state regulatory proceedings: special contracts between utilities and data centers being approved with minimal public scrutiny, potentially shifting billions in infrastructure costs to regular ratepayers.With tech companies planning up to $1 trillion in spending on AI infrastructure, some utilities project their energy sales could nearly double by 2030. Are state regulators allowing utilities and tech companies to ink billion-dollar contracts, and pass the costs on to ratepayers without transparently proving the system-wide benefits?This week, Ari Peskoe, Director of the Electricity Law Initiative at Harvard Law School, joins us to talk about the new report he co-authored, “How Utility Customers Are Paying for Big Tech’s Power.”This hidden cost transfer is just one front in a broader battle over energy regulation. At the federal level, the White House is making an unprecedented grab for control over FERC, the independent commission governing interstate energy markets.Meanwhile, another executive order gives the Department of Energy extraordinary authority to force struggling coal plants to stay open regardless of economics — creating what critics describe as a consumer-funded bailout for uneconomic generation. We talk with Ari about how these regulatory battles are shaping up, and why they could be so damaging.Open Circuit is supported by Kraken, the only proven, AI-powered operating system for utilities. Learn how Kraken helps unlock excellent customer experiences, increased innovation and reduced operational costs at kraken.tech.Open Circuit is brought to you by On.Energy. As one of the fastest-growing battery storage IPPs, On.Energy delivers turnkey resiliency solutions for utilities and enterprise customers. Whether you’re managing data centers or local grids, we help bring storage to your fleet. Learn more at on.energy.Credits: Co-hosted by Stephen Lacey, Jigar Shah, and Katherine Hamilton. Produced and edited by Stephen Lacey. Original music and engineering by Sean Marquand.

The business world is facing a tsunami of uncertainty. Across nearly every industry, investment is seizing up amid unpredictable tariffs and contradictory domestic policies. In this week’s episode of Open Circuit, we examine how this compounding uncertainty is impacting clean energy during a critical moment of spiking demand and rising costs.We dissect the signals from the market, revealing that despite the chaos, certain sectors are finding unexpected advantages. While utility-scale projects face delays, distributed generation is experiencing renewed interest as companies seek certainty through on-site solutions. Virtual power plants and grid-enhancing technologies may emerge as clear winners in an environment where traditional infrastructure planning has become extremely difficult.Plus, we play a round of "Transmission Lines," testing our hosts' knowledge of the news through provocative energy quotes, and take live audience questions about the volatile landscape.Open Circuit is supported by Kraken, the only proven, AI-powered operating system for utilities. Learn how Kraken helps unlock excellent customer experiences, increased innovation and reduced operational costs at kraken.tech.Open Circuit is brought to you by On.Energy. As one of the fastest-growing battery storage IPPs, On.Energy delivers turnkey resiliency solutions for utilities and enterprise customers. Whether you’re managing data centers or local grids, we help bring storage to your fleet. Learn more at on.energy.Credits: Co-hosted by Stephen Lacey, Jigar Shah, and Katherine Hamilton. Produced and edited by Stephen Lacey. Original music and engineering by Sean Marquand.

John Smirnow, Principal of Smirnow Law, shares his extensive trade expertise, discussing the chaotic impact of U.S. tariffs on the energy sector. He delves into the contradictions of trade populism, the three-part tariff strategy of boosting domestic manufacturing, and national security. Smirnow articulates the looming uncertainty for clean energy investments and the challenges facing businesses amid fluctuating policies. He also raises critical questions about whether these tariffs will create lasting change or simply inflate costs.

The podcast dives into the shift from climate-centered energy strategies to a focus on national security. As geopolitical tensions rise, particularly the Russia-Ukraine conflict, energy security is taking precedence in investment decisions. Discussions highlight how this may accelerate the adoption of clean energy solutions. The hosts explore the complexities of energy investment, contrasting tolling versus trading strategies in turbulent markets. They also tackle potential funding cuts for clean energy and the implications for innovation amid Washington's chaotic landscape.

Five years post-pandemic, energy markets reveal surprising shifts. The lockdowns sparked a boom in renewables while urban life evolved without the predicted demise of cities. Data centers emerged as major energy players, reshaping consumption and digital connectivity. The contrasting U.S. and EU policy responses highlighted challenges and opportunities in clean energy investment. As fossil fuel volatility continued, the pandemic underscored the appeal of zero-fuel-cost solutions, driving a transformation in both market dynamics and energy strategies.

The residential solar industry is navigating tough times due to high interest rates and policy changes. Key player Sunnova faces challenges that affect its significant DOE loan guarantee. The discussion highlights innovative solutions like off-grid solar microgrids tailored for data centers. Hybrid solar-gas systems emerge as a competitive answer to rising energy needs. Advocating for better regulations and community-driven models is essential for the sector's evolution, aiming to move beyond its image as a 'bad product'.

Major U.S. banks are pulling out of climate alliances, raising questions about the future of sustainable investing. As they shift from decarbonization to 'de-risking' portfolios, the implications for clean energy investments are profound. A critique of the Inflation Reduction Act sparks a debate on its economic effectiveness and reliance on corporate subsidies. The urgent need for robust clean energy supply chains and the integration of climate solutions into business practices highlights the complex interplay between climate policy, economics, and public engagement.

Elon Musk is making waves by targeting the very agencies that aided his rise in the energy sector. Indiscriminate budget cuts are threatening nuclear security and grid operations, raising alarms about critical infrastructure. A new executive order could slow regulatory decisions, impacting electricity markets significantly. Meanwhile, the EPA's efforts to reclaim green funding raise eyebrows, and Texas faces challenges as gas developers abandon projects while clean energy, like solar and batteries, continues to thrive without subsidies.

Peter Freed, former director of energy strategy at Meta, dives into the escalating demands of the tech industry with a staggering $1.3 trillion investment in data centers. He discusses how AI's expansion is outpacing efficiency gains, leading to a projected tripling of electricity consumption by 2030. The conversation touches on the shift from mega-campuses to smaller data centers, the pivotal 2027-2032 energy landscape, and the urgent need for sustainable solutions like nuclear and geothermal power. Freed also tackles critical questions about the costs and infrastructure requirements of this energy boom.

The discussion dives into the puzzling contradictions of the Trump administration's energy policies, risking its own goals. It highlights the impressive growth of clean energy alongside resistance from fossil fuels. There's a focus on the resilience of solar power and the electric vehicle market despite regulatory challenges. The impacts of AI on energy infrastructure are explored, alongside political shifts affecting investor confidence. The episode wraps up with optimistic predictions for electric vehicle sales and battery advancements.