In this Expert Spotlight session, I sit down with Kent Chandler, Resident Senior Fellow at the R Street Institute and former Chairman of the Kentucky Public Service Commission, to tackle the growing friction between rising energy demand and grid reliabilty. As the energy sector moves from a period of stable demand to one defined by rapid acceleration – fueled by data centers, advanced manufacturing, and broad electrification – our infrastructure is facing structural and institutional tests like never before.
The conversation explores the “hysteria” of load growth, where Chandler differentiates between actual electricity demand and the speculative forecasts currently sweeping the industry. He shares why he is more concerned about utilities that “skate to where they are told the puck will be” by building for unverified demand, particularly in vertically integrated regions where captive customers bear the financial risk of overbuilding. Unlike competitive markets like Texas where investors bear that risk, utilities in regulated states are often incentivized to invest in expensive infrastructure rather than seeking more efficient, low-cost optimizations.
A major focus of the interview is the “reliability reality check,” where Chandler uses a car analogy to explain why owning a power plant doesn’t guarantee the lights stay on if the generator fails to perform or lacks fuel. This leads to a deep dive into the “invisible” risks of the energy sector, including the lack of coordination between gas and electric markets, the impact of force majeure clauses that let gas suppliers off the hook during freezes, and the liquidity issues that occur during long holiday weekends. The episode concludes with a look at the future of demand response and the critical need for better measurement and verification to ensure that flexible load assets actually provide the grid support they promise during a crisis.
