Recap of the CSG West Energy & The Grid Committee Meeting during the 78th CSG West Annual Meeting in Jackson, Wyoming
Under the tutelage of Wyoming Senator Dan Dockstader and Alaska Representative Maxine Dibert, the respective co-chairs of the CSG West Energy & The Grid Committee, the committee focused on the challenges and opportunities of managing today’s energy challenges in the West, and the role of data centers in powering the evolution of artificial intelligence.
Understanding Load Growth and Reliability Risks
The West is facing an unprecedent demand for energy to meet a wide range of needs, including housing, municipal, and industrial uses, which are critical to the short-term and long-term economic viability of the region. According to Vic Howell, director of reliability assessment and modeling at the Western Electricity Coordinating Council (WECC), annual energy demand is estimated to growth 20.4% from 2025 to 2034. The load demands are driven by data centers, large-scale manufacturing facilities, and cryptocurrency mining. Among the key roles of the WECC is to assess and mitigate risk to the Western Interconnection’s reliability.
While the demand for energy is growing, so is the risk of reliability. This is because several things are occurring at the same time, such as record demand growth projections, unprecedented plans for new resource additions to meet load projections, significant increase in resource variability, and uncertainty as to building challenges and capabilities.
Director Howell stated that the above-referenced dynamics are being exacerbated by rapid, unprecedented changes that are affecting the reliability and security of the Western Interconnection. These include:
- Year-round extreme natural events
- Evolving and increasing cybersecurity and physical threats
- Retirement of traditional generators (coal, gas, nuclear) to meet clean energy needs
- Surge in new, variable energy resources (VER’s), such as solar and wind; and
- Rapidly changing demands, such as transportation electrification, consumer solar, and large data center loads.
All of this results in resource adequacy challenges and a big question – what happens if not enough energy resources are being build at planned? The unprecedented demand growth and associated uncertainty are making system planning more difficult.
Director Howell shared the WECC’s 2024 Western assessment takeaways, which were the following:
- Demand forecasts are changing drastically annually.
- New large loads creating reliability challenges.
- Unprecedented amounts of planned generation over the next decade
- Variability increases with the addition of energy-limited resources and retirement of coal, natural gas, and nuclear.
- With demand growth, new resource delays and cancellations will create serious resource adequacy challenges.
How can Western states mitigate this resource adequacy issue?
Mr. Howell shared the following strategies and initiatives that WECC is conducting to help mitigate electricity adequacy:
- Through the Annual Western Assessment of Resource Adequacy (WARA), which evaluates resource build scenarios. This, in turn, helps stakeholders prepare for shortfalls and adjust plans accordingly.
- WECC’s Enhanced System Performance Data Portal, which offers real-time updates, interactive charts, and downloadable datasets. This improves transparency and decision-making across the Western Interconnection.
- Promote stakeholder engagement and outreach to ensure shared understanding of the risks and coordinate mitigation efforts.
- Conduct scenario planning and sensitivity analysis, through WECC models, which support proactive planning for delays or cancellations in resource development.
- Ensure emphasis on both operational reliability and infrastructure security.
Example of an Energy Cooperative Meeting Local Reliability Needs
Jim Webb, CEO of Lower Valley Energy, a local energy cooperative in northwest Wyoming and southeastern Idaho, highlighted the operations, achievements, challenges, and strategic initiatives of the cooperative. He emphasizes Lower Valley Energy’s commitment to safety, reliability, competitive rates, and exceptional service, and highlighted energy sourcing strategies, conservation efforts, demand-side management, and community engagement.
Mr. Webb stated that Lower Valley Energy serves 31,000 electric and 5,000 gas meters as part of its territory and infrastructure and maintains 2,800 miles of line (2/3 underground) and 230 miles of transmission line. One of its key features is its cooperative model, as it is one of 830 electric cooperatives in the country. It is customer-owned, with $89 million in patronage capital. Accordingly, it offers some of the lowest electricity rates in the country.
As to its rates and usage, Mr. Webb stated that it ranked #2 in lowest rates, with its usage in Wyoming of an average of 866 kWh/month. Teton County average use is 2,012 kWh/month, while the average usage in the U.S. is 899 kWh/month.
The Bonneville Power Administration (BPA) is a significant supplier of power to Lower Valley Energy, with Lower Valley Energy purchasing much of its energy, particularly hydropower, from the BPA. The BPA’s federal hydropower serves as a primary, low-cost power source for Lower Valley Energy, and the two entities have collaborated on transmission projects to improve system reliability and accommodate growth in the Jackson and Afton, Wyoming, areas.
According to Mr. Webb, BPA uses a tiered rate system, which he outlined as follows:
- Tier 1: Hydro-based, 80% of needs
- Tier 2: Market-based, 20% of needs
Tier 2 Power Plan (22 aMW):
- Wind: 4.25 aMW
- Small Hydro: 1 aMW
- Conservation: 0.6 aMW
- Fuel Switching: 0.5 aMW
- Community Solar: 0.25 aMW
- Market/Build: 15.4 aMW
Mr. Webb also talked about the environmental and community initiatives of Lower Valley Energy, including the Community Solar and Green Power programs, as well as raising $11 million for conservation via SPET, grants and loans.
Water heater controls, EV time-of-use rates, battery storage, virtual generators using natural gas and power walls, and fuel switching initiatives drive the demand management for energy.
Finally, Mr. Webb shared ongoing challenges for Lower Valley Energy, which include:
- Employee housing: Developing lots, owning homes/condominiums, offering high wages.
- Fire mitigation: Undergrounding lines, ROW management, mitigation planning.
- Growth management
Data Centers Powering AI – A Look at One Company’s Innovations and Understanding their Impacts
Policymakers across the West have been giving greater attention to data centers, which are creating unprecedented demands for electricity and water. The demand in data centers is driven by the explosive growth of artificial intelligence (AI), cloud computing, and increased digitalization across a wide range of industries. This demand coupled with the intensity of resources needed for data centers is sparking interest among policymakers about their potential and actual economic, environmental and infrastructure impacts.
Committee members heard from Sara Axelrod, Vice President of Public Affairs and Government Affairs at Crusoe, a company that builds AI-focused data centers and cloud infrastructure powered by clean energy sources like solar, wind, and geothermal power.
Ms. Axelrod shared with members that current AI data center capacity is constrained and that it will get worse. Among the current industry challenges are low data center vacancy rates (2.8%), most facilities rely on air cooling, and only a few (20%) can support the power density required for the next generation of Graphics Processing Units (GPU).
To address these challenges, Crusoe controls everything in the AI infrastructure stack, which allows it to build digital infrastructure and scale intelligence faster.
Ms. Axelrod provided an overview of Crusoe’s geographic footprint, which includes corporate offices in the U.S. and Europe, manufacturing facilities in several U.S. states, and data centers in Texas, Nevada, and Iceland, with expansion planned in other Nordic countries.
A major focus is on Crusoe’s Spark Modular Data Centers (MDCs), which are designed for rapid deployment and off-grid operation. These MDCs are powered by renewable energy and second-life EV batteries and integrate cooling and power management systems. Ms. Axelrod stated that Crusoe reports high performance metrics, including cost efficiency, uptime, and customer satisfaction.
Ms. Axelrod also highlighted the company’s energy development capabilities, with over 20 GW of clean power projects in progress. It describes innovations in cooling technology, power usage effectiveness (PUE), and backup power systems.
Crusoe’s domestic manufacturing operations support rapid deployment of infrastructure, with the capacity to deliver equipment enabling over 400 MW of compute power annually. The presentation concluded with a note on economic development, citing the projected impact of the Abilene data center project, which is projected to create 5,000 jobs and $1 billion in local impact.
Key Takeaways of Ms. Axelrod’s Presentation
- Industry Challenge: AI data centers face limited capacity and outdated cooling systems.
- Crusoe’s Approach: Vertically integrated infrastructure with sustainable energy sources.
- Global Presence: Offices, manufacturing, and data centers across the U.S. and Europe.
- Spark MDCs: Rapidly deployed, off-grid, renewable-powered modular data centers.
- Energy Development: Over 20 GW of clean energy projects are in progress.
- Performance Metrics: Up to 81% cost savings, 99.98% uptime, 100% customer satisfaction.
- Cooling Innovation: Liquid cooling and closed-loop systems reduce water use.
- Manufacturing Capacity: Supports 400 MW of compute power annually.
- Economic Impact: The Abilene, Texas, project expected to create 5,000 jobs and $1B in local impact.
Need For More Information About the Resource Impacts and Local Workforce Benefits of Data Centers
During the question-and-answer period of the session, members inquired about the resource impacts of data centers. Lawmakers want to learn more about the potential strains on the power grid since data centers are highly energy-intensive, as well as their significant water use.
In addition to the energy and water use questions, members engaged in a conversation about the economic trade-offs of data centers. While data centers can generate jobs and tax revenue, state and local governments must also weigh these benefits with the dedication of land, resources, and power that data centers require. Finally, there were also questions regarding the type of jobs created by data centers, including whether they were locally based or remote.
While there were no definitive answers to the questions raised by members during this session, members expressed a strong interest in continuing to engage on the topic of data centers. This includes learning more about what industry is doing to explore and invest in energy innovations, advance cooling systems, and how states will be able to accommodate the growth data centers while having a sufficient supply of energy and water.
What’s Next – Continued Engagement on Western Energy Challenges
Members of the committee shared topics that they would like the committee to address as part of its ongoing efforts during the 2025-26 biennium. These include the following:
- Large battery storage
- Data centers, including their water and energy needs
- Nuclear waste
- Gap energy generation
- Transmission lines in the West
- Capacity for hydro energy
- Nuclear fusion
- Enhancing energy literacy for policymakers
The committee co-chairs, in consultation with staff and members, will establish a work plan for the coming months that will incorporate these issues as part of virtual and in-person engagement, as well as research.