The grid nobody planned for: public power, hyperscalers and the race to rewire America for the AI age

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Mar 10, 2026

Tom Falcone, President and CEO of the Large Public Power Council, leads publicly owned utilities and advises on governance and planning for big data center loads. He discusses how public power’s local, not-for-profit model speeds deals with hyperscalers. They cover interconnection reforms, large-load tariffs that weed out speculative requests, and plans to add massive generation amid permitting and financing hurdles.

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INSIGHT

New Builds Should Bear Incremental Cost Not Legacy Customers

New infrastructure costs more than depreciated assets, so cost-allocation must charge new customers for incremental growth.
Falcone emphasizes blending costs unfairly shifts burden to legacy customers; incremental cost responsibility is the fair solution.

INSIGHT

Grid Shows Energy Headroom But Lacks Peak Firm Capacity

Grid average capacity utilization is ~50%, so there is energy headroom but not necessarily peak capacity.
Falcone explains capacity needs are driven by peak; serving 24/7 data center demand often requires new firm capacity or flexibility.

INSIGHT

Speed Versus Interruptibility Is A Core Tradeoff

Faster interconnection can be traded for interruptibility, but many hyperscalers reject interruption for reliability.
Falcone notes utilities may build at-site capacity if customers refuse interruptibility and need 24/7 firm power fast.

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What two decades of flat demand means for a grid now expected to double in size

The US went from essentially zero load growth for twenty years to 3% national growth almost overnight. The supply chains, permitting pipelines, engineering workforce and regulatory processes were all calibrated for a different world. Bridget van Dorsten is joined by Tom Falcone, President of the Large Public Power Council, representing the 30 largest publicly owned utilities in the United States, collectively owning around 85% of public power assets and currently serving roughly 18% of all US data centre load.

Tom explains what makes public power structurally different from investor-owned utilities: locally governed, not-for-profit, and built to minimise cost rather than earn a return on equity. That governance model turns out to matter a great deal when trillion-dollar hyperscalers come looking for power. Public power utilities have no financial incentive to favour their own assets over a customer's, and their local accountability makes deal-making faster and more direct.

Bridget and Tom also work through the mechanics of how the industry is actually responding. Large-load tariffs are reshaping the interconnection queue, forcing hyperscalers to make long-term financial commitments rather than reserving capacity for free. About two thirds of speculative requests disappear once real commitments are required, which tells you something about the gap between announced demand and real demand. LPPC members are nonetheless planning to add around 60GW of new generation over the next ten years to meet load that is forecast to grow from 4GW to 18GW of data centres in their territories alone, in just five years.

The episode also tackles private use rules, a Treasury regulation from 25 years ago that nobody expected to become a bottleneck for the AI era, the capacity factor realities that make peak-day power so much harder to deliver than annual energy, the nuclear question and why federal involvement is probably unavoidable if the US wants to build at scale, and where CCS can and cannot realistically be deployed.

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