Rate rage reshaped the midterms. Now utility regulators are huddling in San Juan

NARUC president Ann Rendahl didn't ease anyone into the week. Speaking to peers Sunday in San Juan at the association's annual meeting, the Washington state regulator said the newly elected officials and the customers who put them there have one thing on their minds. “Our newly elected leaders and customers just want rates to go down,” she said, adding that “they don't really care how we do it” — but they are “questioning our foundational regulatory approaches.”

Rendahl was talking at the debut meeting of a new effort run by the Critical Consumer Issues Forum, which pulls together NARUC members, the National Association of State Utility Consumer Advocates and the Edison Electric Institute, the trade group for investor-owned utilities. The group's goal: figure out how to judge long-term grid investments by the measurable value they deliver to ratepayers.

Federal-state relations are already raw in places. In September, a federal appeals court ruled that the Department of Energy's “emergency” order forcing Michigan's J.H. Campbell plant to keep running was illegal, noting that state regulators and the Midcontinent grid operator had approved the plant's retirement. NASUCA president and Michigan assistant attorney general Michael Moody called it a fight over “who does resource adequacy — that state role, that federal role — and everything in between,” and said he hopes the midterm results push Washington and the states toward working together.

Arizona offers a preview of the new map. Democrats flipped both chambers of the legislature, and two Democrats won seats on the previously all-Republican Arizona Corporation Commission. Commissioner Lea Márquez Peterson, the body's longest-tenured member and not on the ballot, predicted “a lot of bills come out that will influence our world” — and said data centers are cranking up the heat. “We're all in the pressure cooker,” she said, pointing to grid-enhancing technologies and energy efficiency as ways to stretch grid dollars.

Xcel Energy expects state policies to splinter further. “I think we're going to see a bit more of that patchwork,” said Jeff Lyng, the utility's chief sustainability officer, though he argued the underlying strategy doesn't change. Lyng said growth has to pay for growth, estimating that a gigawatt of hyperscaler load could push rates down by about $1 billion over 15 or 20 years, and he credited wind investment with keeping Xcel's residential rates roughly 30% below the national average, with about $6 billion saved so far and another $12 billion expected by 2030. He also conceded Xcel may miss its 2050 net-zero commitment, set in 2018, now that sustainability plays “fourth fiddle” to safety, reliability and affordability: “We can't force a clean energy transition.”

On affordability, Moody said utilities should rank their spending plans, weigh cheaper alternatives and show solid cost-benefit math — “sometimes, there's these great ideas that have to be pushed off.” Florida Public Service Commission member Ana Ortega pushed back, warning that deferring grid work carries its own price. “You have to also think about the opportunity costs of not planning and not investing in the grid,” she said. “I know that's unpopular. I know it's hard, but in some ways, it's better for long-term customer value.” She also flagged FERC pressure for more regional transmission, arguing it fits poorly with Florida's shape: “it's got all of its load at the bottom.”