Video Blog: Consumers Beware! Speculation Could Overbuild Energy Projects, Stick Consumers with Tab

CUB Ohio executive director Tom Bullock recently spoke with Alex Chapman, energy market expert and President of Ridge Creek Global about why Ohio and PJM should be cautious about making massive long-term energy infrastructure investments based solely on current forecasts of data center and AI-driven electricity demand. The hosts tackled timely and pressing questions including: 

• Are demand projections accurate of inflated? 

• How soon will data centers switch from seeking "power today at any price" to cost-efficient power priced at the market average? 

• If new build transmission and generation won't come online for 8 to 15 years, how can these types of 30+ year assets be built quickly enough to help and produce power priced to be market competitive?

There is little debate that electricity demand is growing. Data centers, advanced manufacturing, and emerging technologies are placing new demands on the grid. The challenge is not whether Ohio needs additional energy resources. The challenge is ensuring we build the right amount of infrastructure, in the right places, at the right cost, while protecting consumers from paying for investments that may ultimately prove unnecessary.

History offers an important lesson. Periods of rapid growth and technological change often create a sense of urgency. Investors rush into markets, forecasts project decades of increasing demand, and large infrastructure projects move forward based on expectations about what the future will look like. Sometimes those projections prove correct. Other times they do not.

For consumers, the most important question is: Who pays if the forecasts are wrong? Too often, the answer has been ratepayers.

When large projects fail to perform as expected or become uneconomic, utilities frequently seek mechanisms that shift costs onto consumers. The result can be higher electric bills for households and small businesses that had no role in making the original investment decision.

Ohio's competitive energy markets were designed to prevent exactly that outcome. Investment decisions should carry investment risk. When projects succeed, investors benefit. When projects fail, consumers should not serve as the safety net.

As Ohio evaluates how to meet growing electricity demand, policymakers should embrace an all-of-the-above strategy that encourages innovation, supports reliability, and allows markets to freely respond to changing conditions. Most importantly, they should ensure that consumers remain protected from the costs of overbuilding based on forecasts that may not materialize.

The future of Ohio's energy system must be built on sound planning, diverse resources, and disciplined investment and not on the assumption that today's projections are guaranteed to become tomorrow's reality.