Why it matters: Data center and energy projects critical to America's AI dominance are dying in community meetings across the country. Shockwaves from this local eruption have reverberated through state and federal government.
To understand the strategy for overcoming this existential challenge, I flew to Washington last week to speak with over a dozen state regulators and two S&P 500 CEOs.
I also heard from a dozen other leaders across two high-level summits.
The playbook they’re converging on:
Launch proactive education campaigns to build trust, lead with affordability proof points, focus first on local engagement, partner with utilities as community messengers, and state the why behind every major action you take – clearly, early, and often.
The Industry Diagnosis
Tulsa-based natural gas infrastructure giant Williams convened a discussion with four C-level leaders, whose companies – moderator EEI CEO Drew Maloney noted – will invest more than a trillion dollars in grid infrastructure over the next four years.
GE Vernova. National Grid Ventures. New Jersey Resources. Duke Energy.
The conversation covered a full suite of solutions to build-out data centers and energy infrastructure faster:
Permitting reform, bring-your-own-generation, upgrading existing assets, new technologies like linear-generation – you name it.
But all roads led back to one thing: communication.
Asked what it will take for data centers to be seen as good long-term development, GE Vernova COO Pablo Koziner identified two critical factors: cost and trust.
"If you're an individual and you think that your power prices are gonna go up – that's a concern. And the second one is: they're building stuff that's gonna end up replacing us anyway."
His prescription: “There has to be a very significant campaign to educate people and build trust on how AI can deliver incredible benefits."
Duke Energy's Louis Renjel, CEO of Midwest & Florida operations and Chief Corporate Affairs Officer, said the answer starts local – because that's where the pressure originates:
"I'm a firm believer this is gonna start at the community level," he said.
"The reason why I think you see so much understandable questioning from the state, national level is 'cause when [elected officials] go home and they talk to their constituents, they're hearing it."
EEI’s Drew Maloney argued utilities are uniquely positioned to be frontline messengers – they have "deep and rich relationships in the communities" they serve, and developers need to partner with them first:
"Early on that was a miss, and it feels like everybody's coming to that conclusion."
Sarah Orban Salati, Chief Commercial Officer of National Grid Ventures, underscored the potency of affordability in recent elections and said proof points need to get into the right hands:
"In the end, politicians are very busy and they hear affordability all the time. The more that we can provide proof points and education that they can share with their constituents, the better."
"It comes down to very basic stakeholder management, early and often engagement," she said.
The Regulator's View: Start With "Why"
Across town, state utility regulators from across the nation gathered at the NARUC Winter Policy Summit.
Two dozen commissioners packed the front row for a panel titled “Customer Perspectives on Rising Electricity Costs.”
"This is the topic," one of them, a Southern state utility commissioner, told me.
The commissioners' questions kept circling the same problem: how do we explain what's happening to the people paying the bills?
Proof points exist, the panelists argued.
Nidhi Thakar of the Clean Energy Buyers Association pointed to Virginia, where Dominion has publicly said large loads brought down transmission and distribution costs by roughly 10% – with 9% shouldered by large energy users like data centers.
Getting these kinds of facts and figures in front of the right audiences remains the imperative.
Thakar cited past efforts by the California Public Utilities Commission to reach ratepayers through advertising and infographics.
I asked NARUC President Ann Rendahl – a Washington State utilities commissioner – how rate cases will evolve amid this increased scrutiny as energy and data center investment accelerates.
"Companies have to state the why better."
"It's not just another rate case. It's not just trying to increase their Return on Earnings. What is this investment that they're making and why?"
It's a two-way street, she said, adding that commissioners, utilities, and developers all need to do a better job of explaining their role and what they're doing.
"You're coming into a community and the first thing you need to do is engage with that community and let them know why you're there and what's important, how this is going to benefit the community."
Rendahl noted NARUC recently established a subcommittee of Public Information Officers to work on communication issues.
The Bottom Line
If you are not equipping large-scale energy and data center projects – and the rate cases and regulatory proceedings that enable them – with a communications campaign, then you are likely to lose.
Bad projects will fail under their own weight, but even projects that should succeed on the merits still need a robust engagement strategy.
The companies and states that execute on this will succeed. The ones that don't will watch projects, investments, and policies get killed.
