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On offshore wind's defense, Three Mile Island, and virtual power plants
Attorney General Letitia James leads a group of states suing the administration’s move to buy back two offshore wind leases.
On Anthropic’s IPO, home energy rebates, and French rare earths
Behind both the Anthropic IPO and the Iran War negotiations sits the energy transition.
A climate scientist goes back to the numbers to argue that we’re overestimating the cost of the energy transition.
A group of energy researchers have a three-part prescription for Washington, D.C.’s exploding energy costs.
Washington, D.C. has earned an unwelcome distinction: the largest one-year electricity price increase of any state (or equivalent geographic distinction) in the U.S. Prices there are up 87% over the past five years and 26% in the past year alone, according to new data from MIT and Heatmap News’ Electricity Price Hub. The average D.C. household is now paying $55 more for power each month than it did five years ago.
In the face of this crisis, local officials have done little but blame regional markets, emphasizing the parts of recent rate increases they don’t fully control — generation charges — rather than any proactive measures they could take to offer relief to D.C. households. Meanwhile Exelon, the parent company for Pepco, D.C.’s local utility, has used the crisis to lobby state policymakers across the region for something worse — a return to utility-owned generation, which could leave consumers holding the bag for projects that run over budget or that are built for demand that never materializes.
As residents of Washington, D.C. and energy researchers who helped put together the Electricity Price Hub, we are well aware that the District cannot remake the regional electricity market on its own. But it has meaningful tools to protect ratepayers now.
To be sure, the problems D.C. faces are not entirely of its own making. Rising demand and constrained supply across the Mid-Atlantic have created a wholesale market pressure cooker.
Capacity market prices in the Pepco region, which are set through a regional auction scheme designed to ensure the grid can reliably deliver power when demand peaks, increased more than fivefold in 2025. Those costs are passing through to retail bills. As capacity has come under increasing strain, generation charges in Pepco’s standard supply service have gone up 119% — 33% in the past year alone, with yet another rate increase set to kick in on June 1.
That regional dynamic is real. But it does not absolve local officials.
Roughly 30% of Pepco’s average residential bill is made up of charges that fall squarely under D.C. jurisdiction. Distribution charges, the largest of those local components, have risen 57% over five years, and account for 20% of the total rate increase. The D.C. Public Service Commission regulates utilities in the District and must approve Pepco’s rates before they take effect. The commission, in turn, answers to the D.C. Council, the District’s legislature, which confirms its commissioners and oversees its work. These bodies should be examining every dollar of Pepco’s proposed increases. Instead, a D.C. court recently struck down the commission’s most recent rate-hike approval, finding that it had failed to sufficiently scrutinize Pepco’s request.
When a regulator is doing such a poor job that judges have to step in, that is a five-alarm signal. Yet there is a workable action plan for the Council and the PSC to rein in costs and ease the burden on D.C. households.
First, scrutinize distribution charges aggressively — that is squarely within their jurisdiction. As Pennsylvania Governor Josh Shapiro argued in his public letter to utility leaders last month, the PSC should require Pepco to justify every additional dollar of revenue requested in plain language. That means using transparent, replicable data and analysis to show why it’s needed, the alternatives considered, and how the proposed spending will concretely benefit consumers. To support this, the D.C. Council should ensure that the PSC, the Office of the People’s Council, and relevant state agencies are adequately resourced and positioned to engage with and probe Pepco’s arguments in rate proceedings.
Second, force transparency into how Pepco procures power. The public has remarkably little visibility into what makes up generation charges for the utility. For example, how much of the total cost is attributable to capacity prices, energy procurement, administrative costs, and compliance with the District’s Renewable Energy Portfolio standard? And what changes could D.C. consider to the competitive procurement process or RPS eligibility requirements to mitigate costs? Officials can’t manage what they can’t measure.
Third, attack demand by making it easier for customers to generate their own supply. High and unpredictable interconnection fees, process delays, and other administrative hurdles add unnecessary costs and contribute to the above-average cost of solar in D.C.. The D.C. Council and PSC can incentivize distribution-level solar battery deployment by cutting permitting and interconnection costs and improve cost transparency and streamline interconnection reviews to speed up the process of installing solar and storage.
None of these moves alone will reverse five years of rate increases. But together they would put real downward pressure on bills and signal that the city is serious.
What officials should reject — across the region — is Exelon’s push for utility-owned generation. In practice, it could create a generation subsidiary tomorrow. The reason it wants its rate-regulated distribution utility to do so instead is that this would let it earn a guaranteed return on costs it currently just passes through, while shifting the risk of cost overruns, schedule slips, and overbuilt capacity from shareholders to ratepayers. It would also hand the utility an information advantage over independent power producers, suppressing the competition the market relies on to keep prices honest. More profit, less risk, less competition. A great deal — for the utility.
The D.C. Council recently passed emergency legislation pausing utility disconnections for residents with unpaid balances under $1,000. That is a humane stopgap as we head into summer, but it is not a strategy. Neither is anything that has been proposed during the current mayoral race, in which leading candidates have attacked each other’s records instead of offering a plan to lower bills.
D.C. residents do not need more blame-shifting. The choice in front of the council and the PSC is concrete: Scrutinize what is in their jurisdiction, force the transparency they have the authority to require, accelerate the cheapest sources of new supply, and refuse to subsidize a Pepco business model that turns ratepayers into the underwriters of utility risk. That is the test of whether they meet this moment seriously.
A conversation with Travis Fisher of the Cato Institute.
This week’s conversation is with Travis Fisher, an energy policy analyst with the Cato Institute and one of my favorite people to chop it up with on Energy Twitter. I reached out to Fisher for a conversation about how he’s approaching the data center boom as a free market-minded wonk at a time when other figures on the so-called Right are calling for strict regulations on the sector. What I learned is that folks like Fisher are concerned about the scale of the buildout too, but their ideas and approaches wildly differ from the Tucker Carlsons of the world.
As always, our conversation was edited for length and clarity.
What’s your approach to the data centers debate in the Republican camp right now?
My bias is towards free markets. So as long as we’re talking about voluntary exchanges with property rights, it's fair game.
The sticking points for me are: is cost being socialized? Is there too much special treatment, like tax credits or overt subsidies or eminent domain? All of that stuff is problematic to me.
There is a world where we have massive expansion and it's still very consistent with my view of how things ought to go. But I’m not sure I love the approach I’ve seen on the siting end of things. There’s stories of private land takings, or private companies taking land, and that’s very problematic for me.
I see this as a huge growth area and a huge opportunity, so the idea of pausing even for a year feels like the wrong way to go about it. There’s a lot of parallels where folks want to slow things down but in hindsight it feels like a silly thing to stop progress.
[And] it really shines a light on conservatives versus free-market people. They’re not always the same.
How do you view data centers as an opportunity for building out the energy grid?
There’s two conversations here, really: improving the grid as we know it and expanding access to power off-grid.
Data centers are very large customers if we can free up supply to increase the quantity on the grid and then reduce average costs. That’s a whiteboard approach. But I can spend all day on why the whiteboard approach to economics on the power grid does not show up in reality. If you reduce average costs, what incentives do utilities have to pass lower costs onto consumers? They’ll just maximize shareholder returns. I don’t like the status quo utility model but there is a white board approach where if we believe in a natural monopoly thesis, then an expansion on the demand side moves you further down a downward sloping supply curve.
If you buy this argument, there’s an opportunity to cut costs. But I’m skeptical of that argument.
You’ve advocated for consumer regulated electricity reform in this situation. How does that relate?
This is the second prong, the off-grid solution. We have customers that want to move faster than the grid allows. We have a very regulated grid which is not compatible with the fast growth these customers want. And they have an enormous willingness to pay for that speed-to-power, so in terms of their opportunity cost, this sets up an opportunity to essentially build new power networks. If you’re a private utility and not a public utility, public utility regulations should not apply to you. And if you can build a private utility without oversight from Public Utility Commissioners or FERC, you’re free to innovate. Then this all becomes a new sector we can transfer learnings from back to the grid.
This idea – which I’ve seen you describe to my colleague Matthew Zeitlin – does it require policy change?
Yes, but it depends on what state. Ohio, Utah, and Oklahoma, maybe West Virginia… Those states already have systems kind of like this. It’s why you may be seeing private [energy and data center] networks there. In Ohio, at the New Albany site. In Utah, which is its own thing. But there are already state laws trending in this direction.
My view on this is you need a reform at the state level saying if you’re a private utility, you’re not under the jurisdiction of the PUC. At the federal level, it would mean the regs that do not apply to the bulk system do not apply to you.
So then, is your goal to create “power islands” here off grid using the free market?
The goal is to be as pro-consumer and free market and fast-moving as possible. This policy change would open that avenue and make it clear this is a greenlit activity. A thing that can happen and investors have certainty they won’t be side-swiped later.
I think we’re approaching the point where a lot of observers recognize the status quo is untenable. They say we had [utility] restructuring and now the status quo is untenable after restructuring, so let’s re-vertically integrate utilities or nationalize them. Those are all terrible, terrible, awful options. But the moment is so dire that a lot of bad ideas are on the table. I’m trying as hard as I can to parse the free market ideas from pro-utility ideas.
Vertical integration – where’s the momentum against that situation? I understand you’re trying to combat monopoly here, without being too heavy-handed from a regulatory level.
Even in a vertically integrated space, there’s pro-consumer reforms and consumer choice. Consumer-regulated electricity would do that in a clean and aggressive way but there is plenty you can do to tinker. How do we fight back against incumbent utilities? There’s many answers to that question but the last thing we should do responding to data centers is give them more control.
For example, the one thing we absolutely cannot do is reintrench the franchise. If a state says nobody else can be a utility in this state, why is that even a thing in the year 2026? That is backwards thinking, 100-year-old thinking we need to move on from.
My last question, since you keep bringing this conversation to utilities, is… why are we seeing so much upset in the utility sector?
I can only answer on my own behalf: They are monopolies. Since when was a monopoly industry friendly to free-market thinking? It’s historically been friendly to conservatives, because of the status quo bias, and I’m trying as best as I can to cleave the conservatives off being pro-utility because if you’re free market and conservative you shouldn’t like what they’re doing.
If you’re pro-consumer, you don’t like whatever the incumbent set up is. There’s an element of both the left and the right seeing this.
As rates go up, and as problems persist, we’re not getting anything more even though we’re paying more. It’s not a good environment for the utilities, who want to keep things the way they are.
