Allocating Electricity

The U.S. electricity system is premised on the ideas that utilities have a duty to serve all customers in their service territories and that electricity supply should always meet demand. Until recently, there has been little reason to question these foundational premises. Now, however, electricity experts predict massive load growth - most notably from data centers to power artificial intelligence (AI) and cryptocurrency - and building new power plants has financial and environmental risks. In this presentation, based on a forthcoming paper, Professor Klass will discuss law and policy frameworks developed for other resources - natural gas and water - for which short- or long-term scarcity is or was the norm rather than the exception, to reevaluate electricity law's foundational principles, like the duty to serve, and to propose new approaches to meeting electricity demand. She will lay out a new regulatory framework for regulating data centers called "demand-side connect-and-manage" that can reduce the likelihood of overbuilding energy generation plants, allocate risks to and encourage innovation from major data center companies, and accelerate data center grid interconnection.

Speaker: Alexandra Klass, University of Michigan Law School