The top U.S. energy regulator spoke bluntly to a room of industry executives at their biggest annual conference earlier this spring.
Laura Swett, chairman of the Federal Energy Regulatory Commission, said the giants of artificial intelligence — the ones with Washington lobbying teams and huge financial stakes in quickly linking up their artificial intelligence data centers to the U.S. power grid — weren’t coming to see her.
When they did, she said, they weren’t on the same page as the utilities and regulators that manage the nation’s power system.
“The hyperscalers, when they do come speak to us, they don’t speak FERC,” Swett said. “Their complaints about the utilities, quite frankly, to me show a lack of understanding of how the utilities normally function and how the grid functions.”
Since that March gathering, those AI developers have been learning the language, according to multiple people in the tech industry. Swett’s remarks set off a two-month sprint to further engage with FERC in face-to-face meetings as the commission approaches a June release for its proposal that aims to bring data centers onto the big regional electric grids — at a faster pace than the likely five-to-10-year timeline that frontier AI companies say is too slow for the fast-moving technology.
As the commission under Swett continues to weigh how transformative its action should be, the most politically fraught option — a federal takeover of the connection process — is opposed by state officials who regulate electricity sales and set the utility rates that households and businesses pay. Under that scenario, FERC would assert broad federal control over how quickly to link data centers’ city-size electricity appetites to the grid, and federal officials would determine how to divvy up costs for transmission and utility service.
The stakes are high for Big Tech. In looking for pathways to connect to the grid more quickly, Silicon Valley companies have been thrust into a regulatory world that utilities have long dominated. And they enter the fray after a brutal year of rising utility bills and voter backlash against data centers.
Microsoft, Google, Amazon, Meta, OpenAI and Anthropic are each spending hundreds of billions of dollars to buy chips, build or lease data centers, and secure the electricity supply needed to run frontier AI models. While they’ve shown a command of Trump-era Washington politics on some of the biggest issues governing the rollout of AI, the regulatory principles that govern the most complex machine on Earth — the U.S. electric grid — are well outside their regular wheelhouses.
“I don’t think Nvidia has ever filed comments before FERC,” Levi Patterson, the giant chipmaker’s director of energy and AI infrastructure policy, said at an April conference in Washington. “Nvidia is new to D.C. and trying to figure it out. We need to figure out a better way to really communicate and drive our positioning here.”
Nvidia CEO Jensen Huang accompanied President Donald Trump to China earlier this month, and the California company is the dominant maker of chips for advanced AI models.
“Eventually, there’s a world where, if we don’t deploy enough infrastructure, the most powerful [AI] models are out of reach for a lot of the average user,” Patterson continued. “That’s why we need to deploy a lot more energy in the United States.”
Google got a jump on other tech companies after Trump returned to White House, hiring energy and regulatory experts in-house and through outside counsel.
FERC’s approach to the Trump administration’s “speed-to-power” push for data centers has a “direct impact on our infrastructure build-out,” said Brad Simmons, Google’s Washington-based energy and sustainability policy manager, at a recent conference sponsored by the Energy Policy Research Institute.
Swett has indicated that the closely held internal FERC discussions will seek to create national solutions to the challenges of pulling “large-load” data centers and high-tech industries onto the grid.
“I’ve learned a lot about how load can be very different depending on the operations and the customers that are served by it,” Swett told an energy audience earlier this month. “That is a billion-dollar — hundreds of billions of dollars — question that we’re trying to solve at FERC.”
‘The next 100 years’
Energy Secretary Chris Wright asked FERC in October to draft a rule that asserts federal jurisdiction over grid connections for data centers to speed their link-ups. That would be a major change from the arm’s-length approach that FERC — and Republicans in particular — have taken in overseeing multistate grids and electricity markets, such as the PJM Interconnection in the East and the Southwest Power Pool transmission grid across the Central Plains.
More direct federal control would assert FERC’s power across the fragmented governance of American electricity — the state interests, powerful utility companies and warring industry factions. And it could present challenges to FERC’s limited authority and legal precedent that have long stymied visions of national energy policy.
Swett, however, has expressed a willingness to push the regulator’s authority to the legal limit.
“There are also powers that the commission can use to initiate change,” Swett said at the United States Energy Association forum in May. “Whatever comes out will be what I believe is the right balance between honoring precedent, the statutes that give us power and also respecting state jurisdiction over retail load.”
Trump has been more willing to push the tech industry on energy costs than he has on AI threats to cybersecurity and jobs. In a televised meeting with tech executives in March, Trump pivoted from AI boosterism to a recognition that Republicans were paying a political price for rising electricity costs. The White House unveiled its “ratepayer protection pledge,” a voluntary agreement signed by Google, Microsoft, Meta, Oracle, xAI, OpenAI and Amazon to pay for expensive grid upgrades and their data centers’ electricity costs.
FERC then has twin goals — to create a more efficient system for bringing data centers safely onto the grid while establishing the guardrails for public ratepayers as utilities and tech companies build out their infrastructure.
Some companies are in a wait-and-see mode.
“Some customers have been willing to continue advancing project discussions and agreement negotiations, while others have chosen to pause and wait for regulatory clarity,” Constellation Energy CEO Joseph Dominguez said during the power company’s first-quarter earnings call.
But tech executives POLITICO spoke with also lament the two different perspectives that separate utility and tech industry priorities.
Utility companies plan and pay for infrastructure over multiyear time horizons. Their regulators use public interest standards to balance consumer protection with infrastructure costs and utility profits.
Google’s Simmons said tech companies are working with elected officials “to make sure they understand the unique dynamics surrounding AI-level growth.”
FERC is no exception, an executive at another AI company told POLITICO.
“FERC has been used to dealing with certain types of companies for the last 100 years,” said the executive, who was granted anonymity to speak freely. “They need to understand that we’re the companies that they’re going to be dealing with for the next 100 years.”
‘What do we want this to look like?’
DOE’s Wright has advocated for an interim step: co-locate data centers and power generation on the same site so the data center can start operating potentially years ahead of connecting to the larger grid.
FERC is also at the center of a complicated regulatory policy debate around tech and power co-location, particularly inside the PJM grid that stretches across the upper Midwest and mid-Atlantic states. PJM has struggled more than any other grid operator to address interconnection backlogs, making co-location potentially more attractive than waiting for the grid to catch up.
Still, the tech and power industries are jimmying the process. Major power companies are planning large-scale energy hubs with data centers as their customers. NextEra Energy is planning a $33 billion investment in gas-fired power plants in Pennsylvania and Texas. Japan’s SoftBank and utility AEP Ohio will redevelop federally owned land to support the power needs of a giant data center complex in southern Ohio.
Tech companies are also calibrating their message to speak more directly to grid policy debates that they’ve largely skirted so far.
“We have to find solutions to better utilize the system than we’re doing right now,” said Amanda Peterson Corio, Google’s global head of data center energy, at the CERAWeek conference in Houston in March.
“We’re focusing too narrowly on this moment and its bottlenecks, and not thinking collectively as a system,” Corio said. “In 10 years, what do I want this to look like?”
Francisco “A.J.” Camacho contributed to this report.
