Speed to Power: How Electricity Ratepayers Can Win the AI Race
“One policy concept gaining traction in some quarters of the policy community is Consumer Regulated Electricity (CRE). It begins with a simple but powerful insight: the fastest way to accelerate investment in electricity may be to allow entrepreneurs to build outside the legacy regulatory structure—without imposing any risk on existing customers.
CRE would allow privately financed, physically islanded electric utilities to serve new, voluntary customers such as data centers or industrial facilities. Crucially, these systems would not: (1) interconnect to the incumbent grid, (2) rely on regulated rates, or (3) socialize costs to the public or increase blackout risks. They would operate through a purely voluntary and private structure—private contracts, private capital, and private risk.
This approach changes the political economy of electricity. CRE is not another attempt at deregulating the old grid. It is a permissionless approach to building completely new networks. CRE mirrors how America built nearly every other major network industry—including railroads, pipelines, fiber-optic broadband, and cloud computing. A CRE utility could move quickly because it wouldn’t have to stop and ask a regulator for permission to build.
The finer points of CRE are laid out in a recent Cato briefing paper. However, the gist is straightforward: if sophisticated customers want to move quickly by purchasing from private networks (and a potential CRE utility wants to provide them service), why should anyone hold them back? More importantly, what could we learn from these emerging systems, and what kinds of innovation might they bring? If there’s one thing the electricity sector needs to keep up with the hyperscalers, it’s a fresh dose of innovation.”
