It’s been a rough summer for soft serve ice cream cone enthusiasts. In most parts of the United States, hot and humid weather has visited and overstayed its welcome, which is no treat for the power grid, either. Elevated temperatures mean increased electricity consumption and accompanying higher prices, the cherry on top amidst a nationwide surge in demand fueled by data centers, manufacturing, and mass electrification.
So far, we’ve seen grid operators issue a few alerts and calls for conservation, particularly in constrained PJM Interconnection territory, where emergency conservation measures narrowly kept electricity demand from eclipsing an all-time high set in 2006. Down in Texas, the record book is being rewritten this summer. ERCOT has shattered its all-time demand mark more than once, but has also thus far kept power prices reasonable by leveraging an influx of renewables and battery energy storage to break generation records, too.
In general, serving peak demand is extremely expensive, and the peakier the system, the pricier it is for the average ratepayer. As most of the country copes with higher electricity bills, finding ways to curb costs is paramount. Thankfully, utilities have a variety of tools at their disposal to improve grid utilization and peak load management, including flexible home electrical equipment, smart electric vehicle charging, and managing distributed energy resources through virtual power plants. And since transmission and distribution system infrastructure is designed to accommodate the few hours of the year when the system is taken to its limits, there is almost always spare capacity on power lines, which can be leveraged via advanced transmission technologies, as we discussed in the previous episode of the Factor This Policycast.
This edition of the podcast, presented in partnership with Advanced Energy United, explores demand-side solutions for surviving summer peaks. We talk about the tools available to keep the lights on and bills manageable, and how utilities can use them to get more out of our existing grid without investing in costly, time-consuming infrastructure upgrades. Richard Caperton, vice president for public policy at SPAN, and Sarah Steinberg, managing director at Advanced Energy United, outline the metrics that matter, share how early legislation is leaning, and explain why demand-side solutions work for utilities.
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In This Episode
Hard times
Advanced Energy United’s Steinberg points out a toxic mix of challenges facing our energy systems right now.
“It’s the rising demand, it’s the energy unaffordability, but it’s also the aging infrastructure and the increasing extreme heat reliability challenge that comes with it all. And there’s really no easy outs,” she laments.
Advanced Energy United has a three-part framework to solve those challenges, focused on grid build-out, making the grid more flexible, and affordability outcomes.
“It’s getting more out of the existing poles and wires, because we just need more energy today to serve our high AC loads or our increasing electrification from vehicles, or that new heat pump we just threw into our basement,” Steinberg explained. “But we also want to be getting more out of our existing grid so that we can spend less on energy infrastructure in the future, and all of this is really about getting customers more electricity at lower cost without breaking the bank. The demand side is extra cool because it gets to involve all of the people out in the world and all of the businesses, and empowers them with tools to manage their own bills and support the system.”
Grid utilization
“People with fancy degrees will tell you power prices are complicated, but in fact, they’re pretty simple,” ventured SPAN’s Caperton, who provided an overview of grid utilization on the podcast.
“How much does it cost to run the system in dollars, and then how many kilowatt-hours are you delivering over the system? That’s the throughput of the system, and if it costs less to run the system, or you deliver more over the system, you get lower power prices. (Grid) Utilization is about increasing the throughput of the system without commensurate increases in the costs of the system.”
Caperton cites a Brattle Group report called The Untapped Grid, which found that a 10% increase in system utilization would lead to a 3.5% decrease in utility rates and save customers on the order of $150 billion over the next decade.
Excited about load growth?
Steinberg reports excitement over observed and anticipated electric load growth in her conversations with the businesses that Advanced Energy United represents.
“This is a new opportunity to do something good for our customers. I’m excited about all the new EVs out on the road and the heat pumps in people’s homes. We don’t want to be thinking of that as an obstacle or a challenge to solve for, or something that’s going to harm energy affordability. We want to be thinking of those as tools that make everyone better off in multiple ways in their day-to-day lives and on their electricity bills,” she detailed.
SPAN’s Caperton concurred on the Policycast, noting that without load growth, it would be very difficult to lower electricity rates.
“Load growth is good. We want load growth,” he said. “Now you need to make sure that load growth is not paired with proportional increases in system costs, and that’s where our technologies come into play.”
But wait, there’s more
Other topics of discussion include:
- The role that off-peak EV charging plays in lowering rates
- How state legislators and regulators have voiced a desire to take action to ensure grid utilization, including in Virginia, where the legislature passed a bill to create metrics around the concept
- Explaining which metrics might be valuable for measuring grid utilization and setting goals for increasing throughput
- Examples of demand-side technologies implemented to lower costs, including electric school buses, heat pumps, and SPAN’s smart circuit breakers
- The silver bullet solution promised by grid flexibility and how data centers will play a role in developing the electric infrastructure of the future
Facts Only
* Hot and humid weather has occurred in most parts of the United States.
* Elevated temperatures increase electricity consumption and prices.
* Grid operators issued conservation alerts in constrained PJM Interconnection territory.
* ERCOT has shattered its all-time demand mark more than once in Texas.
* ERCOT leveraged renewables and battery energy storage to break generation records while keeping power prices reasonable.
* Serving peak demand is expensive, and a peakier system increases costs for ratepayers.
* Utilities use flexible home equipment, smart EV charging, and virtual power plants for load management.
* Grid utilization involves comparing the cost to run the system against the kilowatt-hours delivered.
* A 10% increase in system utilization can lead to a 3.5% decrease in utility rates.
* Demand-side solutions involve consumers and businesses managing their energy use.
* Load growth is considered good, provided it is not paired with proportional increases in system costs.
Executive Summary
Full Take
The discussion centers on the structural tension between increasing energy demand fueled by electrification and the physical and economic constraints of existing infrastructure. The core argument pivots on shifting focus from solely building out infrastructure to optimizing existing assets through demand-side management. The concept that grid utilization—throughput relative to cost—is a key metric is presented as a mechanism for achieving efficiency, suggesting that growth in load must be managed alongside system cost increases. This framing implies that the solution lies not just in increasing generation capacity, but in redefining what constitutes 'delivering' energy and incorporating distributed resources effectively. The enthusiasm for new technologies like EVs and heat pumps is positioned not as an obstacle to be solved, but as opportunities to embed efficiency directly into consumer behavior. The implication is that achieving cost-effective, sustainable electrification requires a paradigm shift where flexibility and demand management become central design goals alongside physical build-out.
BRIDGE QUESTIONS: If load growth is inherently positive for economic activity, what specific policy mechanisms are most effective at enforcing the necessary correlation between load increase and system efficiency gains? How can regulatory frameworks be designed to incentivize consumer participation in demand-side solutions without creating new barriers for low-income households? What long-term infrastructure investments must prioritize flexibility over simple capacity expansion?
Sentinel — Human
The text reads like a professionally produced journalistic summary synthesizing complex energy policy discussions, blending factual context with expert commentary on demand-side solutions.