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A conversation with Center for Rural Innovation founder and Vermont hative Matt Dunne.

This week’s conversation is with Matt Dunne, founder of the nonprofit Center for Rural Innovation, which focuses on technology, social responsibility, and empowering small, economically depressed communities.
Dunne was born and raised in Vermont, where he still lives today. He was a state legislator in the Green Mountain State for many years. I first became familiar with his name when I was in college at the state’s public university, reporting on his candidacy for the Democratic gubernatorial nomination in 2016. Dunne ultimately lost a tight race to Sue Minter, who then lost to current governor Phil Scott, a Republican.
I can still remember how back in 2016, Dunne’s politics then presaged the kind of rural empathy and economic populism now en vogue and rising within the Democratic Party. Dunne endorsed Vermont Senator Bernie Sanders’ 2016 presidential bid and was backed by the state’s AFL-CIO; Minter, a more establishment Democrat, stayed out of the 2016 primary and underperformed in the general election. It doesn’t surprise me now to see Dunne emerging with novel, nuanced perspectives on how advanced technological infrastructure can succeed in rural America. So I decided to chat with him about the state of data center development today.
The following chat has been lightly edited for clarity.
So first of all, can you tell our readers about your organization in case they’re unfamiliar?
We founded this social enterprise back in 2017 because the economic gap between urban and rural turned into a chasm. We traced the core reasons and it was the winners and losers of the tech economy. There were millions and millions of jobs created from the great recession, but the problem was that it was almost exclusively in urban areas, in the services sectors like consulting, finance, and tech. At the end of the day, we believe in the age of the internet there should be no limit to where high-quality technology jobs should thrive.
We work with communities across the country that are rural and looking to add technology as a component to their economy. We help them with strategies – tech accelerators, tech accountability programs, co-working spaces, all the other stuff you need to create a vibrant place where those kinds of companies can emerge so people can come back, come home. We work with 43 regions across 25 states that are all on this journey together and help them secure the resources to execute on that journey.
One of the reasons I wanted to speak with you is your history in Vermont. I went to the University of Vermont, and I loved living there, but there aren’t jobs to keep kids there which is still a huge disappointment to young folks who love living in the state.
At the same time the state reflects many of the same signals we see in Heatmap Pro data around advanced industrial development. Large land owners bristle at new projects regardless of their political party, and Democratic voters are more inclined to side more with locavorism than a YIMBY growth-minded approach.
How do your Vermonter roots inform your work, and do they affect the ways you see the conflicts over new advanced tech infrastructure?
What we’ve seen in Vermont after the Great Recession is that there’s lots of available space and a population that’s aged significantly.
This all impacted my outlook as a community development person, and now as a leader of a social enterprise. We need to be thinking proactively about what an economically healthy community looks like and how we ensure we have places importing cash and exporting value in a way that doesn’t destroy what’s amazing about these rural places. You pretty quickly land on tech, as well as maybe some design-related manufacturing where the ideas are local.
To make it clear, we’re building infrastructure for technology communities which is different from building technology infrastructure itself. That’s an important distinction. It’s about giving them the tools to stand up a tech accelerator and have a co-working space that creates community. A good co-working space has good programming, allows for remote workers to go to a place, and you can have those virtuous collisions that lead to something else. A collaboration. A volunteer project. Whatever it is. Having hack-a-thons, lectures or demonstrations on the latest AI technology that can be used. Youth programming around robotics. If you can create a space where that happens, you create a lot of synergy, which is important in smaller markets – you have to be intentional with all of this.
Okay, so considering those practices, what do you think of the way data center development is going?
For the record, I spent six and a half years at Google and was hired at first because of data centers. At the time, I saw Google try to build a big data center in a community of less than 10,000 people in secret, and it didn’t go well because it just doesn’t work, and that’s how I got my job there.
There is a right way to come into a community with a data center or frankly any kind of global company infrastructure project, and there’s a wrong way to do it. The right way is being as transparent as possible, knowing full well that when a brand name is mentioned, the price goes through the roof for the land. There does have to be some level of confidentiality when you’re ready to go, but once you can, you have to be proactive with it.
You have to be a really good steward on the impacts, whether they’re electrical demand or water demand. It’s about being clear, it’s about figuring out how to mitigate it, and it’s about maintaining your commitment to 100% renewable energy even as you’re bringing online data centers. Oh, and it’s about having a real financial commitment to make sure the community can economically diversify away from being overly dependent on the data center, on that one industry. The data center developers know full well that they’ll create a lot of construction jobs but that’s not going to be a good, sustainable employer. Frankly, the history of rural places is littered with communities that are too dependent on one industry, one company, and that hasn’t
What does that look like from a policy perspective and a community relations perspective?
I think there are models emerging, including from Microsoft, Google, and others, about what good entry and strong commitments look like. It would be great if someone put a line in the sand about 2% of capex going to a community to diversify the economy. It would be great if companies put a reasonable time horizon out there to replace potable water through technology or other kinds of supports. It would be great to see commitments to ratepayers that say people won’t have to foot the bill for increased demand.
Here’s the part we focus on more because we’re not as focused on site selection: Rural America is likely to shoulder the burden of data center infrastructure just like they shouldered the burden of energy production infrastructure. The question at the end of the day is, how do we make sure those communities see the upside? How do we make sure they can leverage tech capacity inside these data centers to be able to have more agency and chart their own economic futures? That’s what we’re really focused on because if you do that, it doesn’t have to be a repeat of the extractive processes of the past, where rural places were used for cheap land and low-wage workers. They can instead be places with lots of land available and incredible innovation, new enterprises and solving the world’s problems.
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What happens when one of energy’s oldest bottlenecks meets its newest demand driver?
Often the biggest impediment to building renewable energy projects or data center infrastructure isn’t getting government approvals, it’s overcoming local opposition. When it comes to the transmission that connects energy to the grid, however, companies and politicians of all stripes are used to being most concerned about those at the top – the politicians and regulators at every level who can’t seem to get their acts together.
What will happen when the fiery fights on each end of the wire meet the broken, unplanned spaghetti monster of grid development our country struggles with today? Nothing great.
The transmission fights of the data center boom have only just begun. Utilities will have to spend lots of money on getting energy from Point A to Point B – at least $500 billion over the next five years, to be precise. That’s according to a survey of earnings information published by think tank Power Lines on Tuesday, which found roughly half of all utility infrastructure spending will go toward the grid.
But big wires aren’t very popular. When Heatmap polled various types of energy projects last September, we found that self-identified Democrats and Republicans were mostly neutral on large-scale power lines. Independent voters, though? Transmission was their second least preferred technology, ranking below only coal power.
Making matters far more complex, grid planning is spread out across decision-makers. At the regional level, governance is split into 10 areas overseen by regional transmission organizations, known as RTOs, or independent system operators, known as ISOs. RTOs and ISOs plan transmission projects, often proposing infrastructure to keep the grid resilient and functional. These bodies are also tasked with planning the future of their own grids, or at least they are supposed to – many observers have decried RTOs and ISOs as outmoded and slow to respond. Utilities and electricity co-ops also do this planning at various scales. And each of these bodies must navigate federal regulators and permitting processes, utility commissions for each state they touch, on top of the usual raft of local authorities.
The mid-Atlantic region is overseen by PJM Interconnection, a body now under pressure from state governors in the territory to ensure the data center boom doesn’t unnecessarily drive up costs for consumers. The irony, though, is that these governors are going to be under incredible pressure to have their states act against individual transmission projects in ways that will eventually undercut affordability.
Virginia, for instance – known now as Data Center Alley – is flanked by states that are politically diverse. West Virginia is now a Republican stronghold, but was long a Democratic bastion. Maryland had a Republican governor only a few years ago. Virginia and Pennsylvania regularly change party control. These dynamics are among the many drivers behind the opposition against the Piedmont Reliability Project, which would run from a nuclear plant in Pennsylvania to northern Virginia, cutting across spans of Maryland farmland ripe for land use conflict. The timeline for this project is currently unclear due to administrative delays.
Another major fight is brewing with NextEra’s Mid-Atlantic Resiliency Link, or MARL project. Spanning four states – and therefore four utility commissions – the MARL was approved by PJM Interconnection to meet rising electricity demand across West Virginia, Virginia, Maryland and Pennsylvania. It still requires approval from each state utility commission, however. Potentially affected residents in West Virginia are hopping mad about the project, and state Democratic lawmakers are urging the utility commission to reject it.
In West Virginia, as well as Virginia and Maryland, NextEra has applied for a certificate of public convenience and necessity to build the MARL project, a permit that opponents have claimed would grant it the authority to exercise eminent domain. (NextEra has said it will do what it can to work well with landowners. The company did not respond to a request for comment.)
“The biggest problem facing transmission is that there’s so many problems facing transmission,” said Liza Reed, director of climate and energy at the Niskanen Center, a policy think tank. “You have multiple layers of approval you have to go through for a line that is going to provide broader benefits in reliability and resilience across the system.”
Hyperlocal fracases certainly do matter. Reed explained to me that “often folks who are approving the line at the state or local level are looking at the benefits they’re receiving – and that’s one of the barriers transmission can have.” That is, when one state utility commission looks at a power line project, they’re essentially forced to evaluate the costs and benefits from just a portion of it.
She pointed to the example of a Transource line proposed by PJM almost 10 years ago to send excess capacity from Pennsylvania to Maryland. It wasn’t delayed by protests over the line itself – the Pennsylvania Public Utilities Commission opposed the project because it thought the result would be net higher electricity bills for folks in the Keystone State. That’s despite whatever benefits would come from selling the electricity to Maryland and consumer benefits for their southern neighbors. The lesson: Whoever feels they’re getting the raw end of the line will likely try to stop it, and there’s little to nothing anyone else can do to stop them.
These hyperlocal fears about projects with broader regional benefits can be easy targets for conservation-focused environmental advocates. Not only could they take your land, the argument goes, they’re also branching out to states with dirtier forms of energy that could pollute your air.
“We do need more energy infrastructure to move renewable energy,” said Julie Bolthouse, director of land use for the Virginia conservation group Piedmont Environmental Council, after I asked her why she’s opposing lots of the transmission in Virginia. “This is pulling away from that investment. This is eating up all of our utility funding. All of our money is going to these massive transmission lines to give this incredible amount of power to data centers in Virginia when it could be used to invest in solar, to invest in transmission for renewables we can use. Instead it’s delivering gas and coal from West Virginia and the Ohio River Valley.”
Daniel Palken of Arnold Ventures, who previously worked on major pieces of transmission reform legislation in the U.S. Senate, said when asked if local opposition was a bigger problem than macro permitting issues: “I do not think local opposition is the main thing holding up transmission.”
But then he texted me to clarify. “What’s unique about transmission is that in order for local opposition to even matter, there has to be a functional planning process that gets transmission lines to the starting line. And right now, only about half the country has functional regional planning, and none of the country has functional interregional planning.”
It’s challenging to fathom a solution to such a fragmented, nauseating puzzle. One solution could be in Congress, where climate hawks and transmission reform champions want to empower the Federal Energy Regulatory Commission to have primacy over transmission line approvals, as it has over gas pipelines. This would at the very least contain any conflicts over transmission lines to one deciding body.
“It’s an old saw: Depending on the issue, I’ll tell you that I’m supportive of states’ rights,” Representative Sean Casten told me last December. “[I]t makes no sense that if you want to build a gas pipeline across multiple states in the U.S., you go to FERC and they are the sole permitting authority and they decide whether or not you get a permit. If you go to the same corridor and build an electric transmission that has less to worry about because there’s no chance of leaks, you have a different permitting body every time you cross a state line.”
Another solution could come from the tech sector thinking fast on its feet. Google for example is investing in “advanced” transmission projects like reconductoring, which the company says will allow it to increase the capacity of existing power lines. Microsoft is also experimenting with smaller superconductor lines they claim deliver the same amount of power than traditional wires.
But this space is evolving and in its infancy. “Getting into the business of transmission development is very complicated and takes a lot of time. That’s why we’ve seen data centers trying a lot of different tactics,” Reed said. “I think there’s a lot of interest, but turning that into specific projects and solutions is still to come. I think it’s also made harder by how highly local these decisions are.”
Plus more of the week’s biggest development fights.
1. Franklin County, Maine – The fate of the first statewide data center ban hinges on whether a governor running for a Democratic Senate nomination is willing to veto over a single town’s project.
2. Jerome County, Idaho – The county home to the now-defunct Lava Ridge wind farm just restricted solar energy, too.
3. Shelby County, Tennessee - The NAACP has joined with environmentalists to sue one of Elon Musk’s data centers in Memphis, claiming it is illegally operating more than two dozen gas turbines.
4. Richland County, Ohio - This Ohio county is going to vote in a few weeks on a ballot initiative that would overturn its solar and wind ban. I am less optimistic about it than many other energy nerds I’ve seen chattering the past week.
5. Racine County, Wisconsin – I close this week’s Hotspots with a bonus request: Please listen to this data center noise.
A chat with Scott Blalock of Australian energy company Wärtsilä.
This week’s conversation is with Scott Blalock of Australian energy company Wärtsilä. I spoke with Blalock this week amidst my reporting on transmission after getting an email asking whether I understood that data centers don’t really know how much battery storage they need. Upon hearing this, I realized I didn’t even really understand how data centers – still a novel phenomenon to me – were incorporating large-scale battery storage at all. How does that work when AI power demand can be so dynamic?
Blalock helped me realize that in some ways, it’s more of the same, and in others, it’s a whole new ballgame.
The following chat was lightly edited for clarity.
So help me understand how the battery storage side of your business is changing due to the rise in data center development.
We’re really in the early stages for energy storage. The boom is really in generation – batteries aren’t generators. They store, they shift, they smooth power, but they don’t generate the power from fuel. In this boom right now, everyone is trying to find either grid connections or on-site power generation. Those are the longest lead time items – they take a while – so we’re still in the early stages of those types of projects coming back and saying, we need to start procuring batteries. We need to start looking at the controls and how everything’s going to work together. That’s still a little bit in the future.
Are you seeing people deploy batteries responsibly, in an integrated way, or is it people unsure what they need?
There’s definitely uncertainty as to what they need. The requirements are still hard to nail down. A lot of the requirements come from the load curve of the AI workloads they’re doing, and that’s still a bit of a moving target. It’s the importance of knowing the whole system and planning that out in the modeling space.
The biggest space of all this is the load profile. Without a load profile, there’s uncertainty about what you’re going to need –
When you say load profile, what do you mean?
The AI workload. The GPUs. The volatility. In a synchronized training load, all of the GPUs are generally doing the same thing at the same time. They all reach a pause state at the same time, and you’re close to full power on the data center, and then they say, okay now we go idle. It has a little bit of a wait and then starts back up again.
It’s that square wave, very sharp changes in power – that’s the new challenge of an AI data center. That’s one of the new uses of BESS that’s being added compared to the traditional data center doing data storage. They’re more stable which use less power and are more stable.
The volatility is where some of the friction comes in, and that has to be handled by some technology.
So what you’re telling me is that data center developers do not know how much they need in terms of battery storage? Simply put, they don’t know how much power they need?
Traditionally, utility-scale batteries – the projects we’ve been doing – come from a PPA, an interconnect agreement. There’s something in place where they know exactly how many batteries they can install. They know how many megawatts they’re allowed to install. Then they come to us and they say, I need a 4-megawatt battery for two hours. Tell me how many batteries you’re going to give me.
In a data center, they don’t know that first number. They don’t know how many megawatts they need. So that’s the first question: well, how big of a battery do you need?
If you have a 1-gigawatt data center that means the load change is 60% of that – 600 megawatts is the step up-and-down. The starting point is 600 megawatts for two hours. That’s the starting point that’ll cover being able to take care of that volatility. The duration is a part of it, too. From there you get into more detailed studies.
When it comes to transmission, how much of a factor is it in how much storage a data center needs?
The first thing is whether it’s connected at all. The battery is a shock absorber for the whole system. If you are grid-connected, the BESS is still a stability asset – it’s still improving the power quality and stability at an interconnect. If you’re doing on-site generation, it becomes vital because you have only one system being controlled.
As far as when you talk about permitting and transmission, the details of that don’t really play that much into the BESS, but it’s tangentially related. The BESS is an important part of how you handle that situation. Whether you get to interconnect or not, it’s an extremely important asset in that mix.
With respect to the overall social license conversation, how does battery storage fit into the conversations around energy bills and strain on the grid?
Bias aside, I think it’s the most important piece.
If you look at the macro scale, it’s like transitioning to renewables where they’re intermittent; batteries turn intermittent generation from renewables into firm, dispatchable power. It’s still not going to be available all the time – you’re not going to turn a solar plant into a 24-hour baseload plant – but a battery allows you to shift the energy. It greatly alleviates the problem.
The other aspect is it’s a stability asset. The short version of that is you have big thermal plants – rotating metal masses that have momentum to them that stabilize everything on the grid. As you take those offline, the coal plants and the gas plants, the grid itself loses that inertia so it is more susceptible to spikes and failures because of small events. Batteries are able to synthesize that inertia.