▶ 0:02:56That guy.
▶ 0:04:25Press the Press the talk button.
▶ 0:15:17Okay. I'm going to be talking. Perfect. Who's ready? Ready. You good? [snorts] Yes, sir. Okay. The Subcommittee on Investigations and Oversight will come to order. Without objection, the chair is authorized to declare recess of the subcommittee at any time.
▶ 0:15:41Welcome to today's hearing entitled Powering America's AI future, assessing policy options to increase data center infrastructure. I recognize myself now for 5 minutes for an opening statement. Good morning and thank you for being here. Today, we are discussing an issue of intersection of energy policy, innovation, and national Artificial intelligence requires enormous computing power, and that means enormous amounts of electricity.
▶ 0:16:11That's not for debate. What is important to discuss is whether our approval process to build infrastructure can meet the demand within a meaningful time frame. Right now, they're not. We need to understand why and what Congress can do about it. We must consider transmission line projects, which are essential to delivering power to new data centers.
▶ 0:16:32Permitting for those projects currently averages about 4 years in some cases and stretches up to a decade, which is a tremendous amount of delay. Meanwhile, federal environment reviews under NEPA average 26 months in 2024, more than 2 years before construction even begins. That's a serious concern when infrastructure must keep pace with rapidly advancing technology. Then there's litigation.
▶ 0:17:00Even when agencies ultimately prevail, when they roughly just three quarters of the time, the process itself can add up to 6 more years in litigation delays. Imagine the amount of technology advances in 6 years, added on to another 2 years, up to a decade. That's crazy amount of delay.
▶ 0:17:20Meanwhile, China is building data centers and power infrastructure with incredible speed through centralized I'm not suggesting we adopt their system, but we should acknowledge that our competitors are not operating under the same constraints. Schools like the College of Engineering at the University of Georgia are helping respond to China's surge by developing AI-enabled transmission planning tools designed to accelerate complex grid studies while preserving reliability.
▶ 0:17:48Now, ironically, they're based on AI models powered by the same problematic Using AI to help plan for the infrastructure that powers AI is exactly the kind of innovation we should be Last year, the Trump administration issued Executive Order 14318 to to address some of these delays by prioritizing permitting for large data centers and improving coordination across agencies.
▶ 0:18:14For agencies under this committee's jurisdiction, including NIST, DOE, and NASA, the implications are significant. However, executive actions has its limits. The underlying status of NEPA, the Endangered Species Act, and the Clean Water Act remain unchanged. There are also practical consequences. Several projects have encountered substantial permitting hurdles despite their strategic importance.
▶ 0:18:40These delays not only affect private companies, but also federally supported research ecosystems for those facilities that are meant to anchor these programs. Cost allocation is another issue. Data centers consume vast amounts of sometimes 10 to 50 times more per square foot than traditional buildings. Under traditional utility rate structures, infrastructure costs are spread across all customers. That also needs to be addressed.
▶ 0:19:08That raises serious questions of whether residential rate payers could end up subsidizing upgrades that primarily serve high-intensity industrial complexes. Some companies are addressing this proactively. Google has partnered with utilities to fund new generation capacity directed rather than shifting costs to the ratepayers. Other companies are exploring rate uh space-based computing platforms that would operate outside the traditional terrestrial permitting framework.
▶ 0:19:37While still early stage, these concepts are highly and are are highlight how regulatory friction can influence where and how infrastructure is developed. We should also consider how this conversation extends beyond major metropolitan regions. Much of rural Georgia and rural America still operates under a a cooperative grid infrastructure originally built in the mid-20th century electrical policy. That system was not designed for compute intensive instru- infrastructure.
▶ 0:20:08That system if the AI integration expands into agriculture, logistics, and public services, rural grid capacity could become a binding constraint. So, what needs to happen? We must evaluate whether a permitting framework largely designed for the 1970s is suited for infrastructure that now is central to national security and economic competitiveness through 2026.
▶ 0:20:34That includes reviewing litigation timelines and considering whether AI-related infrastructure warrants different determines different I'm not advocating that we eliminate all environmental review. We should always be friendly to the environment. We all love to preserve. I'm not advocating that we change the rules in some sort of dramatic capacity, but we do need to change or we will fall behind. That much is certain.
▶ 0:20:58This committee's responsibility to understand regulatory frameworks affects innovation, research infrastructure, and American competitiveness is critical to these technologies. That is the purpose of today's hearing. Our witnesses can help us clarify both the scale and the challenge of potential solutions, and I appreciate their willingness to be here. I look forward to a substantive discussion how Congress can ensure America maintains its technological leadership while addressing legitimate regulatory concerns.
▶ 0:21:29And now, I recognize the ranking member representative from Ohio for her opening Thank you, Chairman McCormack, for holding this hearing and certainly a timely and relevant discussion. So, when you go to watch your favorite show, send an email, shop online, or save a photo, you're using what is known as the cloud, which is really a general description for a data storage service. But, this cloud is not in the sky. It's in our backyards.
▶ 0:21:55To manage the massive amount of data used by consumers and industry, tech companies have constructed massive data centers full of rows and rows of computing and network equipment. And these very real facilities have very real consequences for the communities that they are in. Many people may be more familiar with maybe a server room in their office. Think of a service one of these type of server rooms at a much more large and massive scale.
▶ 0:22:21In Ohio alone, there are 217 data centers, the fifth most of any United States states. This includes four in Stark County and seven in Summit County in my district. I want to be clear that I'm not reflexively opposed to data centers. In my district, Ohio's 13th, a number of townships are already hosting these centers and will always and I'll always support these communities to pursue job creation and added tax revenue through large infrastructure investments.
▶ 0:22:49However, that does not mean that Ohioans should pay higher electricity bills for billionaires in Silicon Valley to see higher profits. We must fully understand the tradeoffs of data centers, both the potential they hold for quality of jobs and investments in our communities and the impact on electricity costs, our environment, and even our health.
▶ 0:23:07For instance, my district is home to a cryptocurrency company that once operated the world's largest data center in China, but is now headquartered in Akron, Ohio, now known as Sol AI Limited with a data center in the middle of the city. This data center can use about 83 megawatts of power per day and has the ability to draw enough electricity to power 63,000 homes.
▶ 0:23:29For context, there are nearly 85,000 homes in all of the city of Akron, and Ohioans have already begun seeing increases in electricity costs because of these data centers. Moreover, due in part to increased energy use, studies have shown that communities can see increases in air pollution from these crypto mines, increasing health risks.
▶ 0:23:48And of course, unfortunately, we can't talk about energy in Ohio without talking about Sol AI, formerly known as Bitmain, was also fined $10 million in a foreign bribery scheme. Again, now headquartered in the Midwest of the United States. It is clear that we need to do more to protect residents near these centers while also ensuring that they are operating using good legal business practices that do create jobs for our communities.
▶ 0:24:14Many communities offer generous incentives to these data centers, and we need to make sure that they are holding up their end of the bargain, especially when using taxpayer dollars. The truth is that there is much we don't know yet about these data centers, but the known impact of electricity prices, the environment, water utilities, and air pollution should all give us pauses before we agree to an unprecedented buildout of data center infrastructure without any guardrails to protect the American people and our bank accounts.
▶ 0:24:40It is no secret that land for these centers is cheaper in some parts of my district compared with other parts of the country, and I'm certainly not opposed to large-scale infrastructure investments that will boost Ohio and our country's competitiveness. But, while ultra-wealthy companies may find our property prices affordable, constituents in my district are facing an affordability crisis everywhere we turn. So, we are at a crosswords crossroads.
▶ 0:25:05We need to decide the right way to harness this explosive growth in data center infrastructure so that they increase job opportunities and investments in our communities instead of simply increasing costs for the American public. One path is the Trump administration's approach. Few safeguards, rapid expansion, and a total embrace of data centers with little thought to the communities that host them. That's not the approach that I advocate for, and I hope that we don't take that method that road.
▶ 0:25:32We need to choose a path that avoids mistakes before they are made instead of dealing with them afterwards and putting strong guardrails in place to protect our communities, not only our health, our environment, as well as our bottom lines. If we can address these questions with rigorous, high-quality research, our country and our constituents will be far better off. To that end, I am pleased to welcome Dr. Eric Masanet to the hearing. Dr.
▶ 0:25:57Masanet is a leading researcher trying to model and understand the long-term impacts of data centers, and his perspective will be invaluable for the committee, and I apologize for the challenges getting in today. It's a little bit busy day on the hill today. Thank [snorts] you for your willingness to testify, as well as all of our witnesses, and thank you, Mr. Chair. Yield back. Thank you, ranking member Sykes. I now recognize ranking member from the full committee for statement.
▶ 0:26:24Well, thank you, Chairman McCormack, and ranking member Sykes for holding this hearing, and I thank the witnesses for coming here today on such a busy day. This hearing is a great opportunity for all of us to think carefully about an issue that's moved to the center of our political debate. Data centers loom large in the United States today, and they are presented as the foundation of America's global leadership in artificial intelligence.
▶ 0:26:51They're the subject of projected investment on an astonishing level, perhaps hundreds of billions of dollars in the years to come. They are a major source of economic growth and an engine of the stock market. Everything about data centers seems outsized in scale and ambition. Of course, there's another side of the story. The impacts of data centers on local communities can be just as huge as their national aspirations.
▶ 0:27:18Data centers require massive amounts of energy to operate, and their demand for electricity threatens to strain our grid and to send energy prices surging for residents and small businesses. They consume enormous amounts of water to prevent overheating and emit air pollutants from backup diesel generators that can expose nearby communities to health hazards.
▶ 0:27:43They create noise pollution that can distress people living nearby, and their demand for power if comes from fossil fuels instead of clean energy could deal a dangerous setback to America's clean energy transition. Now, this debate has a familiar ring to Californians.
▶ 0:28:02Our state has considerable experience in trying to balance the transformative economic growth that technological innovation can bring with the impacts of that growth on the cost of living and affordability. Certainly, for those of us in the San Francisco Bay Area, this has been a crucial question for many, many years, and California will be central to this debate once again as the state with the third largest concentration of data centers in the country.
▶ 0:28:31I have no doubt that different communities will reach different conclusions about what's in their best interest, but there's one thing we should all be able to agree on. More data and more transparency about data centers is is essential.
▶ 0:28:45Communities should not have to make decisions about whether to host a data center without access to basic information about electrical usage and water consumption, air quality, noise pollution, and the potential effect on energy prices. Researchers should be able to use real-world data instead of relying so heavily on estimates and assumptions.
▶ 0:29:10All of us, policymakers, regulators, researchers, local communities, really the American people, need consistent, reliable, transparent data to make informed decisions about data center growth. The lack of that transparency is troubling, and I look forward to discussing it further today. It's worth remembering that ignoring data center impacts does not make them go away. Now, the Trump administration has become America's biggest cheerleader for data center buildout.
▶ 0:29:40All we hear from the administration is that the best thing for America is more data centers built as quickly as possible in as many parts of the country as possible. That strikes me as foolish and short-sighted. If our country isn't smart about data centers, if we fail to act with diligence and prudence, mistakes will be made, and that will inevitably lead to backlash and the beginnings of that are already starting to be seen.
▶ 0:30:06Data center operators and supporters should appreciate that their social license to operate is a valuable, but also a fragile thing. It's in their own self-interest to be as transparent as possible about data center impacts, so the country can make reasoned judgments about how to sustainably mitigate them. I hope to learn more in today's hearing about the how the federal government can do more to support this kind of transparency, and Mr. Chairman, I yield back the balance of my time.
▶ 0:30:38Thank you, Ranking Member Lofgren. I appreciate your statement. Let me introduce our witnesses now. Our first witness today is Ms. Paige Lamerton, research fellow at the Center for Energy and Environment for the Competitive Enterprise Institute. Our next witness is Mr. Marsden Hanna, head of energy and sustainability policy for Google. And our last and final witness is Dr.
▶ 0:31:03Eric Massonnet, professor and Mellichamp Chair in sustainability science for emerging technologies for the University of California at Santa Barbara. I now recognize Ms. Lamerton Sorry, Lamermont for 5 minutes to present her testimony. Chairman McCormick, Ranking Member Sykes, and distinguished members of the subcommittee, thank you for holding this hearing today and inviting me to testify.
▶ 0:31:26My name is Paige Lamermont, and I'm a research fellow in the Center for Energy and and Environment at the Competitive Enterprise Institute, a nonprofit public policy organization dedicated to free market principles with a focus on regulatory issues. I'm grateful for the opportunity to speak to you today about the importance of permitting changes and innovation to meet rising power demand. I have three main points that I want to make in my testimony. Power scarcity has been created by policy decisions. Permitting reform is essential to meet this challenge, and now is the time for new and innovative solutions. Power scarcity is a policy decision.
▶ 0:31:57For the last several decades, energy policy in general and electricity policy in particular has focused on making do with less, curtailing demand, producing less power, and electrifying things like cars and appliances. These policies have simultaneously created less reliable electricity, while also using government intervention to increase reliance on electricity. This was never a plan that was going to foster reliability, but now that demand has begun to rise for the first time in nearly two decades, the true folly of that approach has been revealed.
▶ 0:32:24According to a DOE report, 104 gigawatts of firm power capacity are set to retire by 2030. At the same time, demand growth by 2030 is projected to be between 35 and 108 gigawatts. The delta between retiring capacity and new demand will require new reliable capacity to fill the gap. Ideally, the permitting and policy ecosystem would favor the swift construction of new reliable power plants, and the supply chains for building these plants would still be intact.
▶ 0:32:49In this hypothetical world, new power demand from data centers would be an opportunity to generate electricity to solve complex problems and generate economic productivity. But, on our broken power grid, where it is incredibly difficult to build new power plants and the supply chain to build those power plants has broken down, this opportunity becomes a challenge. The priority should be the formulation of policy that turns that challenge back to an opportunity. We are more than capable of meeting growing power demand, but this will require removing regulatory barriers that impair the construction of new power plants and the reliability of the power grid.
▶ 0:33:19There are many policy changes that will contribute to this, but two of the most important actions will be comprehensive, broad-based, and technology-neutral permitting reform, and removing obstacles to innovation. Permitting reform is essential to meet this challenge. To help solve the current supply issue, our federal permitting system must be reformed in ways that go beyond the National Environmental Policy Act. The Clean Water Act, Clean Air Act, Endangered Species Act, and other laws must be amended in parallel to remove overbroad, duplicative, and unnecessary requirements to secure permits.
▶ 0:33:48This would help create a federal permitting process that allows new development to occur in a timely, predictable, and cost-effective manner, while maintaining high environmental standards. Regulatory agencies also play a role in making it more difficult to build new power plants. So, while the EPA is a primary culprit, another agency that's been especially restrictive is the Nuclear Regulatory Commission. The ADVANCE Act helped to bring the mission of the NRC in line with the goal of stewarding, rather than simply overseeing the nuclear industry. But, improvement must go much further if nuclear power is going to play a role in meeting rising demand.
▶ 0:34:18In China, the current timeline for a large reactor from start to finish is 7 years, and there are currently 27 reactors under construction. The last large reactor built in the US were Plant Vogtle units 3 and 4, which took 14 and 15 years, respectively, and began construction in 2009. The United States is not losing on quality of technology or ability to innovate in this space. It's losing on regulation, and that is entirely a policy choice.
▶ 0:34:42Ensuring that the regulatory structures that govern the development of new power plants of all types are reasonable, predictable, consistent, and scientifically based is essential to develop new power plants at the necessary speed to meet rising demand and remain globally competitive. Now is the time for new and innovative solutions. Another option to ease the bottleneck around getting new power on the grid is to enable innovation, including off-grid utilities.
▶ 0:35:05Consumer-regulated electricity is an opportunity to create an alternative to the traditional grid pathway for new customers that are willing to pay for their own electricity. CRE will offer privately financed off-grid electric utilities to serve customers, including data centers. These utilities would be physically islanded from the broader power grid. This would allow companies who want power quickly to avoid the traditional utilities queue, while bearing the cost of their own infrastructure. CRE provides flexibility and speed to companies working on innovative projects, while providing cost insulation to ratepayers.
▶ 0:35:35For this to be possible, individual states would need to pass legislation exempting islanded utilities from their definition of a public utility. This policy innovation has already become law in New Hampshire, and related legislation has been introduced in several other states. At the federal level, the DATA Act S. 3585, introduced by Senator Tom Cotton, would enable CRE by clarifying that CRE utilities are exempt from federal regulation as public utilities.
▶ 0:36:00To meet growing power demand and protect ratepayers, it is essential that we both reform our permitting system and remove government obstacles to allow new and innovative solutions. It is technologically possible to meet rising demand, and we can and should do so in a way that protects existing ratepayers while allowing for new development. Thank you. Right on time. Thank you, Ms. Lamermont. I now recognize Mr. Hanna for 5 minutes to present his testimony.
▶ 0:36:25Chairman McCormick, Ranking Member Sykes, and members of the subcommittee, thank you for the opportunity to speak today. My name is Marsden Hanna, and I develop Google's approach to energy policies that affect the company. I appreciate the opportunity to discuss the intersection of AI and energy with the subcommittee. As the United States races to lead the world in AI, permitting and transmission reform has become a critical lever for maintaining our competitive edge. The potential for AI to accelerate US economic growth is staggering.
▶ 0:36:52Research estimates that AI could result in global economic uplift of more than $4 trillion However, realizing these gains, as well as accelerating breakthroughs in science and fortifying national cybersecurity, depends entirely on our ability to build and power the infrastructure that makes them possible.
▶ 0:37:11Today, the United States is facing critical challenges to meeting this Fragmented and congested electricity grids across the country are increasingly tapped out, and many can no longer support electrical load growth. Transmission lines, many built more than 50 years ago, are now running out of And adding to the challenge, new transmission infrastructure to power growth and create a more affordable and reliable energy system can take over a decade to permit and build.
▶ 0:37:39Many of these delays originate from our outdated and Byzantine infrastructure permitting system, which is composed of a patchwork of regulations and bureaucracy at all levels of government. This leads to crippling timelines, uncertainties, and single points of failure, where litigation can delay or kill projects over procedural issues. Congress established authorities in 2005 that were intended to speed construction of critical infrastructure transmission infrastructure to promote reliability and competitiveness.
▶ 0:38:08However, this over overly bureaucratic process and legally uncertain framework has proven entirely ineffective. And over the last 20 years, this federal process has led to the construction of zero new transmission lines. US electricity policies and statutory frameworks urgently need reform. This is why we've endorsed the House-passed bipartisan SPEED Act, which we believe must be paired with reforms to how we build regional and interregional transmission.
▶ 0:38:35We believe fundamentally that energy supply is a national security Winning the AI race requires winning the energy race. Currently, the United States is ahead of global competitors on AI. However, the gap is closing. The speed with which China can plan, permit, and deploy energy infrastructure is a comparative advantage. To give just two examples, China is the largest global power investor by a wide margin, with almost as much investment as the US and European Union combined.
▶ 0:39:06And according to a recent report, China has completed over 80 times more high-voltage transmission in the United States in than the United States in recent years. To seize the opportunity presented by AI, Congress should pass comprehensive legislation focused on three core First, cut energy permitting bureaucracy across the board. Reducing permitting timelines to accelerate project schedules can help reduce project costs, and these savings can be passed on to electricity customers nationwide.
▶ 0:39:36Second, establish an effective federal transmission permitting framework. Congress can speed construction of national interest transmission lines that provide economic and reliability benefits to power growth by reforming authorities at the Federal Energy Regulatory Commission. Third, Congress should establish clear procedures that provide permitting certainty for new energy projects.
▶ 0:39:58Accelerating investment in energy infrastructure requires a consistent and durable framework upon which investors, asset owners, and purchases purchasers of power can rely to get projects built. At Google, we believe in the promise of AI and we are investing heavily in the infrastructure behind it across the United States, which many of you have seen in your states.
▶ 0:40:20In the last 6 months of 2025, we've announced investments of $40 billion in Texas through 2027, $9 billion in each of South Carolina, Oklahoma, and Virginia, $7 billion in Iowa, $4 billion in Arkansas, with more announcements to To meet customer demand and capitalize on growing opportunities, we we anticipate that 2026 investments will be in the range of 175 to 185 billion Realizing the potential of AI will require
▶ 0:40:51robust energy infrastructure, more energy efficient use, and new innovative technology solutions. I look forward to today's discussion and to working with you on these investments. They are reflection of the opportunity that we see in America. Thank you. And thank you for your testimony. I now recognize Dr. Massanett for 5 minutes to present his testimony.
▶ 0:41:15Chairman McCormick, Ranking Member Sykes, and esteemed members of the committee, it is an honor to appear before you today to discuss the critical role of open and transparent data for understanding and shaping the growth of the US data center sector. My name is Eric Massanett and I'm a professor at the University of California, Santa Barbara and I have been analyzing the energy and water requirements of US data centers for nearly two decades, starting with the first US data center energy report commissioned by Congress back in My remarks today are my own and are not intended to represent the positions
▶ 0:41:45of the University of California, Lawrence Berkeley Lab, or the US Department of As you might imagine, for analysts like me, there is no hotter topic these days than the growing infrastructure requirements of US data centers. How much power and water will data centers require, both now and in the future? Which strategies can help minimize infrastructure demand stress and impacts on local communities? What are the most effective policy levers for achieving these outcomes? And which innovation should we be investing in today in order to achieve future goals?
▶ 0:42:15These are but a few of the questions that analysts at many organizations around the country have been racing to answer. And as you can imagine, answering them requires high-quality data to produce accurate, timely, and trustworthy results. And when high-quality data also become publicly available, they provide critical ground truth that allow all analysts to work from a common evidence basis and they support innovation by catalyzing the development of new models, new software, and forecasts that can unlock a wide range of new insights for different stakeholders.
▶ 0:42:45For these reasons, the US has long been a global leader in the standardization, collection, and open dissemination of high-quality data for every major sector of national importance, including power, buildings, manufacture, and transport sectors. We've done this for every major sector that is, except for one, and that is data centers. In fact, no other major US sector, and especially one that is growing so quickly, suffers from as many public data blind spots. So, what are the major blind spots and what can we do about them?
▶ 0:43:15The first relates to transparency. Very few data center operators disclose the energy and water use of their specific data centers and some companies report no data at all. As a result, analysts have to make many assumptions, which leads to a wide varie- a variety in estimates about current and future infrastructure demands, as you've probably all seen. And this uncertainty hampers effective decision-making. The second relates to timeliness.
▶ 0:43:40When companies do report, they release annual data that are already out of date for this fast-evolving sector by the time analysts receive them. Additionally, important real-time details on the infrastructure requirements of the data centers that are being built today are often kept secret through NDAs.
▶ 0:43:57This means that many analysts can be out of sync with what is happening on the ground and this means that we can't always capture emerging trends that will affect future energy and water demands, like shifts to liquid cooling or on-site generation or energy storage or waste heat recovery, to name a few. The third blind spot relates to the broader effects of AI. Analysts currently have a very limited understanding of whether the applications of AI will ultimately add to or offset the energy and water demands of AI data centers themselves.
▶ 0:44:27And we also don't know where these effects will play out. Understanding the net effects of AI, what drives them, and what different stakeholders can do to minimize negative outcomes and maximize positive ones represents a critical new frontier for analysts. However, data for doing so are currently both sparse and unverified. Fortunately, the above blind spots can be readily addressed using approaches that are both well-established and have precedents for other major US sectors.
▶ 0:44:54First, when it comes to collecting more detailed and timely data, it is important to acknowledge that US operators, utilities, and local authorities already have the needed data in hand. They just need to be unlocked. Here, government surveys and data collection programs can play the decisive role. For example, the US EIA and Census Bureau have decades of experience collecting and publishing open data sets for major US sectors and many US operators are already submitting similar data to government databases abroad.
▶ 0:45:24Second, when it comes to analyzing the net effects of AI, the US government has a scientific leadership opportunity. It can play a key role in developing improved data standards for measuring AI's various impacts. It could establish data collection and knowledge-sharing platforms and facilitate convenings of experts that advance the nation's scientific excellence. As the old adage goes, you can't manage what you don't measure. However, the blind spots I've described can be addressed and relatively quickly with the right commitments by government and industry.
▶ 0:45:54High-quality open data benefit analysts across all types of organizations, irrespective of their research questions. In my view, given the importance of this sector, investing in improved data foundations to unlock strategic insights should be an an urgent national priority. Thanks for the opportunity to testify before you today and I look forward to our discussion and to answering your Thank you, Dr. Massanett. Now, we'll start hearings by allowing Mr.
▶ 0:46:23Harrigan to open up for 5 minutes. Thank you. Well, thank you, Mr. Chairman and thanks to all of our witnesses for your testimony today. This really is a fascinating and impressive conversation given the demands of the future of our market economy. So, thank you for your testimony today. I've got a a question for you, Mr. Marsten Hanna.
▶ 0:46:43Um from Google's vantage point, sitting on the front lines of artificial intelligence development, can you elaborate how the current permitting process, as difficult as it is, for energy infrastructure, directly benefits our strategic competitors like China in this AI race and what the long-term cost of our inaction with this permitting reform would look like? Thank you, Congressman.
▶ 0:47:11It's a important At Google, we believe it's fundamentally important that we accelerate reforms to unlock our ability to build generation and transmission. Strategic competitors around the world do not take into account factors like cost allocation.
▶ 0:47:31They they look very differently environmental impacts infrastructure And in the United States, it's very challenging to build both generation and transmission infrastructure. When we look to site new data centers, the primary barrier that we are facing on the in the market is the challenges interconnecting to the grid.
▶ 0:47:53We have utilities telling us it can be 5 years, sometimes 10 years to interconnect new facilities and that primarily ties back to grid congestion. And so, what we'd we'd recommend is that Congress pursue a three-part package where we cut infrastructure permitting bureaucracy across the board. I'm very pleased to endorse the House-passed bipartisan SPEED Act, which we think has important reforms to NEPA.
▶ 0:48:18In addition, creating an effective federal process for citing national interest transmission infrastructure that can provide reliability benefits and power the next era of of growth. And finally, permitting certainty so that investors and off-takers know that they can rely on the energy infrastructure to get built and to have a durable permitting process to achieve Well, thank you for that clarity. And look, I represent Central Western North Carolina.
▶ 0:48:47We have some incredible opportunities in North Carolina with respect to the future of the data We've got Interstate 40, we've got Interstate 77 in my district and farther out east, we've got Interstate 95, main arteries on the Eastern Seaboard and throughout the Southeast and that also happens to be where all the fiber is. And so, North Carolina is a very natural spot for data center development. We have data centers going all up up all over our state.
▶ 0:49:16And while that is a magnificent economic development opportunity, I think as many of you know, it's also creates challenges. And when we have a finite amount of power and the demand for that power goes up, the price goes up as well and starts pushing affordability concerns out to everyday ordinary customers on the grid. That's my constituents.
▶ 0:49:38And so, one of the things that we've been acutely focused on is uh and I'm I think anybody on this committee knows I'm very pro-nuclear and want to see nuclear energy uh really kind of come and see a resurgence in our country, but I'm also a realist and I also understand that nuclear energy is not our solution today or tomorrow.
▶ 0:50:00Uh we've got long-term considerations of regulatory reform in order to get that into the realm uh of the next several years, but one of the things we can do immediately is on-site natural gas energy production. And talking around the industry, you've said sometimes providers have told you that it's 5 to 10 years uh worth of regulatory hurdles to get across the finish line.
▶ 0:50:23I've been told directly by natural gas providers that if we eliminated those regulatory barriers from the time that they said go to the time that you could have on-site power generation that would suffice for a data center load is as little as 8 weeks. I think that should highlight to everybody that the problems that we actually have are self-inflicted.
▶ 0:50:48And the problem is is that prevents us from getting more data centers uh because at the end of the day, if we're concerned about the price of of power going up, but we can't put that power in. The great thing about data centers is they don't change the culture of a place as the place develops because you only have about 100 people that are going to staff that data center. They're all making $100,000 a year, so you get the tax benefit.
▶ 0:51:13You get the increase in the quality of life from a data center without actually changing your culture because you don't come with the congestion load that comes with normal development. So, this is something we absolutely have to sort out. Thank you for your testimony today. We've got great opportunities ahead for this country and I'll yield back. Thank you, Mr. Herrington. And now I yield to Ranking Member Sykes for 5 minutes. Thank you, Chair, and thank you to the witnesses.
▶ 0:51:38So, as I said in my opening statement, uh many of my constituents and and I think probably the entire panel here are anxious about the risk of electricity demand and the eventual and current increase of utility costs uh that are really struggling uh that are making our community struggle. And I appreciate the comments about permitting reform because we've heard that in a lot of different places.
▶ 0:52:02I also sit on transportation infrastructure committee, so uh that is a very regular topic of conversation, but I do think I would be remiss if I did not mention that the worst bureaucracy here in DC is the Republican-led majority that has been one of the most unproductive in uh modern history. Uh while the SPEED Act uh did pass Congress the House, we haven't seen much activity from this current Republican majority in the House or the Senate.
▶ 0:52:28So, I think our first complaint should lead and start with the leadership that is refusing to move forward any of your permitting reform or even have legitimate hearings on such issues. Uh but I do want to ask any member of the panel who might happen to know the answer to this. Do you know how many transmission transmission projects are currently being held up by regulatory reviews?
▶ 0:52:55I don't have a figure on that at hand, but we'd happy to look at that. Thank So, I asked that question because I've heard it multiple times in the testimony that these transmissions and these projects are being held up, but then no one can share how many of them there are.
▶ 0:53:11And so, uh I think we heard if you can't something around if you can't measure it, you we don't know really what the the scope of this issue is and and trust me, I don't think that permitting reform is uh solved by any means, but we also aren't able to identify it. Uh so, it makes it a little bit difficult for us to say, "These are the problems." when it could be two. It could be three. It could be 3,000, but no one seems to know.
▶ 0:53:36So, I do hope that as we are having more discussions that people can bring forth the information that can truly help us make uh these best decisions. Uh I also noticed that during my opening statement, many people were shaking uh the panelists, I should say the witnesses, in agreement about not wanting to increase costs, but I didn't hear anything about it in the testimony. So, I'll give you an opportunity now. Uh we'll start with you, Ms. Lambremont, about how are What are some of the suggestions that you have to reduce costs while also increasing capacity?
▶ 0:54:06Yeah, I think that one of the options um that I presented in my third sort of third point is consumer-regulated electricity, the ability for new demand to be off-grid in ways that will, you know, allows innovation because you can manage a grid in a different way if it's a private grid, right? You take your large capacity, it's not part of the the power demand that um regular rate payers are served in, but you can maybe manage power differently if it's in your own area.
▶ 0:54:30I mean, utilities historically have been very reticent to pursue innovative policies rightly because they are trying to preserve both reliability and affordability for rate payers. But when you're doing your own thing off-grid, you're able to do more interesting things that could lead to, you know, improvements on the broader grid if they're proven to work. Um so, I think that's one option um as well as the option to put power behind the meter to, you know, pay for your own power behind the meter and build it that way.
▶ 0:54:54Um I also think that an important element of this is that as you have more power somewhere, as you're using more power, the marginal cost of electricity should go down. In an economy that worked correctly, the marginal cost would go down as demand rose. Something's broken on the power grid that the marginal cost doesn't go down as there's more power.
▶ 0:55:12That the fact that that math doesn't pencil means that something else is wrong, and I think we should look closer at what on the power grid right now, both in the RTO areas and in the vertically integrated utilities, isn't working and is causing cost allocation problems that way um because I think there's been cost allocation problems both with transmission and with the way that power plants are built and amortized over time. Sometimes they're prematurely retired and those costs are still borne by rate payers.
▶ 0:55:37And there's other things in the mix that are making the cost problem worse that aren't just new demand. Um so, I think it's all worth
▶ 0:55:45but I didn't hear permitting reform in that either. Mr. Hanna. Thank you. Uh we think that grid-connected data centers can be a helpful part of driving electricity costs down for all Americans. There was a Department of Energy study that was published uh several months ago that showed that between 2019 and 2024, the states with the largest degree of electricity load growth saw real price declines uh for residential customers.
▶ 0:56:10And the reason for that is you are spreading the fixed costs of the system, the the transmission lines, the fixed costs of having power plants around to be able to serve capacity, you are spreading those costs across a larger user base uh and volumetric electricity consumption. So, if data centers are able to be grid-connected, if we are able to be part of a system, we can help pay for a more robust electricity system that benefits all Americans with more reliable, more affordable power. Thank you, Mr. Chair. I'll yield back.
▶ 0:56:41Thank you, Ranking Member. And now I Representative Biggs for 5 minutes. Thank you, Mr. Chair. Uh it was great to hear in uh the opening remarks the importance of the SPEED Act, and I'm I'm a proud co-sponsor of the SPEED Act. I was glad to see that uh actually pass the House and get over to the Senate. I'm encouraged uh to see uh some movement in the Senate on that bill. We all recognize that permitting reform is important.
▶ 0:57:07Uh I'll also uh be bringing the House companion for the DATA Act uh here in the next few days. So, um we've got some really important work that's happening uh in the House as the sole member of uh the the delegation from Alaska uh in the House, um it's part of my job is to plug Alaska. We talk about uh the need for uh uh instant power, making sure that we've got vast power resources available for uh AI data centers.
▶ 0:57:36Alaska has trillions of cubic feet of natural gas, and I hope uh for those that are listening and those before us today that uh you're uh looking at Alaska as a potential resource for power uh for AI data centers, and we will welcome you uh to our state. First uh question I have for the panel, should data centers supporting AI development be classified as critical infrastructure eligible for expedited permitting similar to national security facilities? We'll start with you, uh Ms.
▶ 0:58:07I think that expedited permitting rules of that kind sort of miss the point. The entire system should be as efficient and quick as we can make it. I don't think that by creating carve-outs for different things, especially for national security reasons, I think we end up in a space where the government gets to pick more winners and losers. I think that what's better is to have as efficient of a system as you can possibly have so that every project can be permitted as quickly as it reasonably should. Um so, I think that what would be better than that would just be to do permitting reform well.
▶ 0:58:36Um and that yeah, I think we sometimes lose the point when we try to do little carve-outs for specific things. Although, I do think it is an important Thank you, Mr. Hanna. Thank you. I agree with um Ms. Ms. Lambremont.
▶ 0:58:49I think that uh uh the most important thing we can do is to unlock capacity for data centers to be able to interconnect to the grid and build with pace um and then let the market system uh work and let us uh connect and find a willing buyer and willing seller to be able to uh bring uh facilities to to to Thank you. And and Dr. Massanet. Thank you.
▶ 0:59:13Uh permitting is a bit out of my research area, and uh but I will say that when permits are issued, having public information on the types of technologies, the size of projects, uh technology details, energy sources would be invaluable for helping analysts better understand what's happening on the ground and making better projections about what may happen in the future. Let Let me ask another question for the panel.
▶ 0:59:34Do you agree that delays in implementing meaningful permitting reform increases the risk that China could establish an insurmountable lead in AI infrastructure and development? I think that when it comes to this issue like the the most effective source in in the in the world for innovation is the American private sector and anything that we do to prevent the American private sector from being able to develop this technology puts us at at national security risk and I don't think that the solution to that
▶ 1:00:04is government intervention to support different industries or make things work. I think that the solution is to get out of the way and allow the American private sector to do its thing because it's always innovated incredibly when given the opportunity and I think that's how we win on this.
▶ 1:00:22We agree that it's essential for the United States to be able to compete with China and strategic competitors around the world that we have a permitting system that is conducive to expedient and timely construction of generation and transmission infrastructure and that that is a very important part of unlocking energy security, unlocking energy supply to meet the AI I'll defer on this one again.
▶ 1:00:48It's a bit out of my research area except I will say that China is investing quite heavily in data centers. We also track data center energy use in other parts of the world and China is the number two data center hotspot in the world for investments and energy use and growing rapidly. Is there anything you'd like to to add with respect to the research that's coming out of China? What what the what those metrics look like in terms of investment? I don't have numbers at hand but I'd be happy to follow up.
▶ 1:01:15I generally track the size of data centers, the energy use, the locations where we can get data. In fact, it's a bit of a black box studying China from abroad but I'd be happy to share what intelligence I have at a later time. That would be great. You know, I I think we can all agree that artificial intelligence is growing dramatically. It's growing at an accelerating rate.
▶ 1:01:37We recognize that this is both a threat and an opportunity that we need to be cognizant of and we need to fully embrace in order to ensure that we win the AI race. It's incumbent on this Congress to ensure that we are getting government out of the way and allowing the private sector to flourish and certainly that's my objective and I see my time's expired and with that I yield back. Thank you, Mr. Biggs. Now I recognize Ms. Lofgren for 5 minutes. Thank you, Mr. Chairman.
▶ 1:02:07This is an important hearing and you know, none of us I think believes that just having a lengthy permitting process is a valuable thing. I mean, it's getting the data, getting the decisions in a prompt way and that is fully informed is kind of what we want to have but that gets to the issues that you've raised, Dr.
▶ 1:02:34Massanetta because as you've mentioned in your statement we don't have good data and you indicate that the only major sector of the US economy that lacks detailed high quality energy and resource utilization data is the data centers. Why is the data center subject to such unique data gaps? How did this situation arise?
▶ 1:03:05I think there are two parts to my answer. Thank you, Congresswoman, for the question. Partly, you know, data centers pre-AI boom, they've always been important all around the world but their national energy use and water use were were relatively small compared to other sectors but that certainly changed post-AI boom. The data centers that we're building now are much larger in size, much larger in power capacity than previous data centers.
▶ 1:03:28So, I would argue that data centers given the amount of investments, the size of the data centers, the amount of power they're projected to require has really catapulted them into major status. The second part of the answer is because data centers have been relatively small in terms of those those resource uses in the past, there hasn't been a lot of pressure until recently for data centers to be more transparent and the companies who operate them. This is a sector that also has a lot of proprietary concerns when revealing data.
▶ 1:03:54So, in my view having studied them for 20 years, they tend to release few data and only when when they really need to release data, they release as few as possible. That said, there are some companies that are better than others that do release detailed data on their data centers. Let me ask you this. federal agencies would be best equipped to play a leadership role in collecting, standardizing, and publishing data sector information?
▶ 1:04:22As I mentioned in my testimony, there are two major agencies. The first is the Energy Information Administration which is probably the one I would recommend just because that administration has been collecting energy and resource utilization data for every other major energy consuming sector, power, manufacturing, transport, buildings for many years. They know how to design surveys, they know how to protect confidential information, and they know how to to get it done quickly.
▶ 1:04:46Let me, you know, without disclosing a private conversation I recently did have a conversation with the CEO of someone who playing a major role in AI and what we discussed was that we're going to hit a wall in terms of energy supply. If you take a look at the growth of AI we got an energy supply problem. Mr.
▶ 1:05:11Hanna, I know that it's been reported that Google has made a major investment in Commonwealth Fusion and they are buying up spots for their fusion energy companies.
▶ 1:05:24I know that Helion has their less um prone to send out press releases but they are also acquiring footprints to put it on the grid but obviously if there can be co-location of a fusion plant with these data centers, it solves a lot of the bothersome problems for communities, the as well um and it it addresses the issue which is the elephant
▶ 1:05:55in the room which is we don't have an adequate energy supply to really meet the growth in this sector. What can you tell us about those So, we are committed to partnering with innovative energy companies to scale up the next generation of energy technologies. As you mentioned, Congresswoman, we have a partnership with Commonwealth Fusion. We also have a partnership with Kairos Power to accelerate order book of small modular nuclear reactors. We have a partnership with Fervo Energy to bring on enhanced geothermal.
▶ 1:06:23We think it's very important that as we grow, we bring on new firm capacity to meet firm load needs. With regard to co-location, we think this is an important speed to power solution and that as we look to lead the world in AI, we do need the ability to pursue structures where we are citing a generation resource next to a data center.
▶ 1:06:44In those cases, our preference is that that resource be front of meter so it can be a a contributive part of providing energy to the grid as well as to the data center. But ultimately, this is a higher cost solution for American industry and it it doesn't allow us to help be a constructive part of lowering cost of the grid by paying for transmission system if we are grid I see my time is expired. I yield back, Mr. Chairman. Thank you, ranking member.
▶ 1:07:12Now I one of two people that I really think are leading in in knowledge. Well, I'll give credit to both sides on this, by the way. Mr. Obernolte who's one of the interesting people in education and Mr. Foster on the other side of the aisle, I think are are two of the experts in this but I open it up for 5 minutes for Mr. Obernolte. Thank you, Mr. Chairman. Thank you to our witnesses for being here to talk about this critically important topic.
▶ 1:07:38I'd like to continue questioning narrative that ranking member Lofgren had started there on co-location. So, Mr. Hanna you're probably the expert on this. There are two competing narratives.
▶ 1:07:53You're hearing over and over again in this hearing the concern that consumers have that data center and the electric load that it brings onto the grid uh will drive up the cost of energy for them and that's a reasonable fear. Um the competing narrative is the one that we're discussing on co-location where if you're going to construct a new data center, the number one thing you need access to is high quality, reliable base load.
▶ 1:08:21If you don't have that, you can't run your data center and that's a huge investment. So, you're either going to co-locate generation when you build your data center or you need to go to a local provider and contract to have them build some new generation so that you have access to that energy. Uh and you're going to size that generation, whatever you do, to meet the maximum amount of energy that you might need.
▶ 1:08:42So, in practice, you're probably over generating and then you sell the excess energy back onto the grid which actually ironically drives down costs for consumers. So, those are the two narratives. Where is reality in between those narratives? So, our our belief is that data centers can play a constructive part in lowering costs by being grid connected but it is important that we achieve speed to power.
▶ 1:09:08We are in a race with with strategic competitors to build capacity and we need to be able to bring on power as quickly as possible. We announced earlier today an investment in Texas. We'll be building a new data center there which will have co-located energy solutions. Again, our our hope is these structures are front of meter so we can dispatch into the grid and help reduce costs for everyone.
▶ 1:09:33But over the long term, you know, the challenge with co-location is you require significant extra backup capacity. So a fully islanded system requires 100% backup capacity. By comparison, a grid connected system requires only 20 to 10 to 20% backup reserve capacity.
▶ 1:09:52So for American industry to to be competitive over the long term, for American industry to help pay for a transmission system that is increases reliability for all Americans, we need the ability to connect to the grid and that requires transmission permitting reform. Right. Yeah, I mean I to me that's a separate issue, right? But you know, we're talking about transmission, we're talking about generation.
▶ 1:10:14I mean, I guess you can argue that to the extent you're not co-locating, you need the transmission to move energy from one place to another, but um you know, I I I think generation is going to be a key component of that. And unfortunately, I'm I'm a co-chair of the Fusion Energy Caucus. I'm very optimistic about that. It's not going to happen, however, soon enough to to save us in this instance. Miss Lambertmont, so you know, talking about permitting reform.
▶ 1:10:42And I I'm in complete agreement that this is something that we we need to be pursuing. You mentioned kind of in a passing way in your testimony the burden that overlapping federal and state regulations play in the difficulty in getting new transmission done. And I have an interesting perspective on that because I serve currently, in addition to this committee, I I serve on the Energy and Commerce Committee here in Congress. And when I served in the state legislature, I served on the Utilities and Commerce Committee in California.
▶ 1:11:11So you know, I can I can vouch for the fact that we have you know, this this maze of competing regulations. Can you talk a little bit more about how those overlapping layers of regulation extend timelines and whether or not that's actually a good thing for environmental protection? Yes, of So when it comes to NEPA, the the running joke is always the process is the punishment. Like essentially, the process is drawn out and long on purpose to make it hard to build something. I'm not sure if your mic is on. I'm so sorry.
▶ 1:11:42There we go. Um at the same time the the NEPA process overlaps with all of these other processes. So once you've already done the NEPA review, you come upon an environmental species act or an endangered species act review that has to happen concurrently. And then there's something with the Clean Water Act that has to happen concurrently and something with the Clean Air Act that has to happen concurrently. And at a certain point, you've studied four separate things on overlapping timelines that have triggered additional reviews and additional reviews.
▶ 1:12:08Rather than looking at the problem holistically and studying it quickly, you're looking at all of these different branching pathways that require incredible amounts of money and man-hours and delay add delay upon delay. And then when you're in a state that has its own NEPA, the NEPA process has to happen again in this other way and it just becomes this sort of overburdensome process that layers upon itself. And I think that we could just do it in such a more efficient way by looking at the problem holistically and saying, "Okay, what do we actually need to cover here?" Right. I agree. Well, thank you very much for your testimony.
▶ 1:12:38I yield back. Thank you, Mr. Obernolte. And now I recognize Ms. Bonamici for 5 minutes. Well, thank you to the chairman and ranking member. Thank you to the witnesses. A couple comments at the outset. I heard the word permitting a lot in the testimony, in the opening statements. And I'll note that this committee does not have jurisdiction over permitting. That happens in Energy and Commerce, Transportation and Infrastructure. I'm glad we had have some overlap.
▶ 1:13:03It did remind me that a former chairman of this committee once said you could get anything in the jurisdiction of the Science Committee by putting research about in front of it. So that reminded me that you know, in hearing some of these sort of anti-government, get the government out of the way comments, I just want to note for the record that robust investment in basic research by the federal government does help private industry. So I just want to put that on the record.
▶ 1:13:29The the other thing I I want to note is that I sure wish we saw as much enthusiasm for grid modernization, for integrating renewable energy as we're seeing for data centers. I I want to note that this is something that we've been talking about for a long the importance of grid modernization. So I do understand that we have a goal for America to lead the world in AI. But I hear from working families right now that they can't afford to pay their energy bills.
▶ 1:13:55They're especially frustrated if they think they're going to be seeing steep increases to let profitable companies exploit the already strained grid. We know data centers are now driving one of the fastest surges in energy demand in modern history. And many of our constituents are feeling the pain. It was interesting to hear Mr. Obernolte talk talking about how this could actually lower costs. I think that remains to be seen.
▶ 1:14:19A recent analysis by Bloomberg showed that near some major data center clusters, electricity prices have skyrocketed as much as 267%. So in response, many states are modeling solutions to this unsustainable problem. So in my home state of Oregon, we passed the POWER Act. We, the state legislature, where I used to serve, passed the POWER Act. And this creates a new classification for large load energy users like data centers.
▶ 1:14:46It requires them to pay the cost of transmission, generation, and grid upgrades that they require for their operations. And it also requires a 10-year contract. There's some serious concerns about in making these huge investments and then a couple years down the road if if they're abandoned, that's that's a huge barrier and cost. So if companies want to build hyperscale facilities that consume massive amounts of power, they need to take responsibility for the cost. So I want to ask you, Mr.
▶ 1:15:14Khanna, as I mentioned, Oregon's POWER Act requires large load customers, including data centers, to fund the grid upgrade costs that they trigger. So why is requiring these hyperscale operators to pay for transmission, generation, and storage infrastructure good policy? And what other state policy examples should Congress look at and consider for a framework to address AI-driven energy Thank you, Congresswoman. I want to be very clear.
▶ 1:15:42This is this very important issue and we know that the the electricity prices that Americans are facing is is very important that as as a company like Google, we take we address this topic. And I want to be very clear, we pay our way. At Google, we pay our way. And that means we pay for 100% of the electricity that we use to power our data centers. And it means we structure our contracts so that we are paying for the incremental infrastructure that is needed to power our facility further up the grid. That's something we're very committed to.
▶ 1:16:13No families or small businesses should should be bearing the costs of data center growth and infrastructure. And we're committed to doing this. So have structured contracts through what we're calling our capacity commitment framework in a number of states where we're paying upfront minimum charges, long-term contracts, upfront collateral to ensure that as we grow, we are sure that that there is capital there to protect other ratepayers
▶ 1:16:43from rate from rate increases. That's something we're very committed to. Thank you for modeling that kind of responsibility. Maness net, did I say did I say it correctly? Maness net, thank you.
▶ 1:16:53Maness net. You know, utilities have to plan years in advance, but data center demand projections are swinging wildly depending on AI growth assumptions and opaque through industry disclosures. So what financial and reliability risks do ratepayers face if utilities overbuild generation and transmission based on inflatable forecast inflated forecast? And what safeguards should regulators adopt now to prevent stranded cost cost and also grid instability? Thank you, Congresswoman.
▶ 1:17:23I'll just briefly say that better data, better visibility on you know, the justifications for new capacity additions and transmission upgrades, those should be based on a common view of the data center sector. So a lot of the estimates that we see are based on sort of bespoke data sets that different analysts have to come up with on their own. And we we lack a common view of what's happening on the ground. I think having that data foundation would reduce uncertainties and inject a lot more transparency into those forecasts.
▶ 1:17:49Thank you. And as I yield back, I do want to note I had a bipartisan bill in the last Congress to deal with security risks to the grid and I hope we can take that up again, Mr. Chairman and ranking member. And I yield back. Thank you. Thank you, Ms. Bonamici. Now I recognize myself for 5 minutes. First of all, it's rare when I ever could say that I'm disappointed as a whole with our our esteemed panel, but you were asked a question, a very simple question I thought, by the ranking member of how many programs were delayed by regulatory to which there was no answer.
▶ 1:18:19And I was like, it's an easy answer, 100%, all of In my opening statement, if you were listening, and I kind of hurt my feelings are a little bit hurt right now, I stated a quarter of them are All of them are delayed by an average of about 26 months by review processes. And then 100% of them are challenged in court, which delays them another two to 10 years. There's your answer in my opening statement. So I just want to I wanted to kind of clarify that for for the for the record.
▶ 1:18:47Miss Lamberton Lamberthorn, I'm sorry I did it twice. The Biden administration issued numerous executive orders related to climate, environmental justice, equity, infrastructure decisions on all capacities. In your assessment, did these policies improve environmental or did they just primarily add to procedural complexities?
▶ 1:19:10I think that many of the executive orders, as well as a lot of the environmental laws passed during that period of time, rather than aiding in you know, bringing more power to the fore in an efficient way that didn't you know, harm harm consumers or the environment, instead just slowed things I mean, especially some of the rule making processes that we saw. I mean, the reason that we don't have a supply chain for gas turbines is because everyone thought the power plant rule was going into effect until earlier this year. And there you go.
▶ 1:19:37I got to cut you off because I got to ask everybody to ask We have a 3-mi road in our 3/4 of a mile road in my district in my my neighborhood that was laid for 18 months to cost 3/4 of a million dollars to determine if it's going to be repaved or not. That's the burden of regulation. Didn't help anybody, didn't make it cleaner, didn't make it safer, just delayed and made more expensive. Typical. Mr.
▶ 1:20:00Hannah, has Google delayed, reallocated, or relocated, or canceled data center projects due to uncertainty in energy infrastructure permitting timelines? The barriers to bringing on new energy generation and transmission have been a barrier have delayed our ability to bring on new capacity. And and I'll say this, looking at what's happening in Ireland right now, which is the headquarters for Google in Europe, they're facing those same burdens over there as they are here.
▶ 1:20:28And Europe's falling way behind right now in the AI race because of the regulatory burden. It's a canary in the coal mine moment for us as as far as I look at this. Dr. Massanets, I'll save you for last. One of the interesting things that I'm saying, you're going to have increased As you said, huge amount of data centers in California, Silicon Valley leading in in industry and technology and all that stuff like that. I learned to surf in San Onofre as a Marine. I lived there for 7 years.
▶ 1:20:58Back in the mid-90s, we had the same challenges in the grid there. They were already way behind, and energy consumption is only parabolically shifted to increasing right now. If you look at nine of the 10 most unaffordable states in the union are blue states because of regulatory burden, because high energy costs, because we're not building the infrastructure. Nine of the 10 most affordable states, red states. Why? Because they're not as burdened by by government.
▶ 1:21:22When when we look at solutions at your esteemed California if we're going to have a real discussion about how we produce enough energy for something that is going to consume it, whether you want it or not, the people are demanding it. It is a popular item, and it's going to help us leap into the future to be competitive with the most competitive nations out there, or conversely, fall way behind. I would say we've already put ourselves at a disadvantage.
▶ 1:21:48Do you think that nuclear energy is harmful to the environment or a major solution for the future of this That's a bit out of my area of expertise because I study the evolution of data center demand. So, how we use energy, not necessarily the supplies, but I would go back to my central argument that understanding what the options are, having data on those options would allow us to make better decisions about paths All right.
▶ 1:22:14Well, I'm going to keep my comments very short, but I just want to make the the point that a lot of times government is not the solution, but the problem. And I don't think this is any different that we all want a clean environment. We all want to be responsible. We all want to pay our bills, make sure that we offset that we're not a burden to society, because when we become a burden to society, we are no longer going to be viewed favorably, and that's bad business. As Calvin Coolidge said 100 years ago, the business of America is business.
▶ 1:22:40Cheap, affordable energy, a good grid, that is the future of America, and that's what we have to support. And with that, I'm going to yield early. Imagine that. To Mr. Foster, one of my favorite members who's extremely well thought of, and and I hope you don't embarrass me by saying that by saying something, you know, inappropriate.
▶ 1:22:57Something exceptionally With that, I yield for 5 minutes. Uh well, thank you, Mr. Chair. And then to our witnesses, and my apologies for being in and out of this. It's a crazy day in case you haven't intuited that. Dr. Massanets, you talked about the importance of getting data collection. roughly 4% of electrical demand is AI data centers.
▶ 1:23:22Roughly 1 to 2% is Bitcoin And then on February 1st, the Trump administration ceased collection of information on the energy consumption by Bitcoin mining. Were you aware of that? No. No, no, it's the EIA has a deep dive discussion of that. Um and and so it seems like that's a huge step backward. I've been frustrated for a while on this because, you know, it's it's of order half of all of the data center um consumption is Bitcoin mining.
▶ 1:23:51And when Ethereum switched from proof of work to proof of stake, it's its power consumption went from very significant to near zero. And there's no technical reason why that couldn't be done with Bitcoin. If we did that, that would provide, you know, today half the energy that you're consuming in the whole. And and I was just wondering, is that something that have there been serious efforts at trying to make that happen? Does that depend on a a nudge from Congress? Thank you, Congressman.
▶ 1:24:21Cryptocurrency mining is something that folks like I do study in looking at data center energy use, and you're right, proof of stake Sorry, um proof of work is a very energy intensive Bitcoin process, but that shift is really something that is a bit beyond my my expertise, how to how to facilitate a
▶ 1:24:41we could
▶ 1:24:41say technically, yes, a shift would make
▶ 1:24:44In many ways, we have you know, there's a voting mechanism where where Bitcoin and all crypto they can change their underlying code. In fact, that's was with Ethereum back in roughly 2022, and it it worked, and it's fine, it's reliable, there's no problem with it, no cybersecurity problems that I'm aware of.
▶ 1:25:02And so it seems like it works, and it's a not a small thing, and that might be something where with my other hat on in financial services, maybe we can find ways to incentivize the collective voters of Bitcoin to actually change you know, from proof of proof of work to proof of stake. It would be a huge um anyway, just a thought.
▶ 1:25:22So, if there is if you dig up research on, you know, how close that I believe there were technical proposals that says, "Here's exactly how we will switch Bitcoin." And it just seems like if we could do that, that would at least take a lot of pressure off of of the grid. Um so, Mr. Mr. Massanets, Hannah, um the you know, I've I've read various summaries of various analyses of what's the cheapest way to do this to provide the energy.
▶ 1:25:49And you recent experience with US nuclear, it's about $10 a watt. The spot price for for Chinese solar cells is 8 cents a watt. And you know, you got to divide by six for the capacity, and and the storage you need, the the battery storage is it's going down really rapidly, and it's going to go down by another factor of roughly two with when sodium batteries replace lithium batteries. And so this is already the low-cost way of of doing this.
▶ 1:26:18I think Goldman Sachs had a big report on this not too long ago where they said the cheapest thing way to do this is just go out in the desert where land is effectively free, put out a bunch of solar cells, get a bunch of you know, get a bunch of batteries, even lithium batteries, which is what they were looking at at the time. And then so the thing is self-contained. In the rare instance when you're in El Paso and there's a snowstorm, and then you just sit there, okay, the the data center's off the air.
▶ 1:26:46You know, I'm sure like Google, you regularly deal with having one of your major data centers off the air. You have fiber to shift the load around. And so it seems like that's a completely workable solution that doesn't involve, you know, jumping on on grids, putting these in cities where people get angry with them. And so what why isn't the market just completely shifting that way? And what what fraction of of what you're installing is in that model, and um where do you see it's going to be going?
▶ 1:27:15So, thank you for the question. We know that many different resources are going to be a very important part of powering new incremental load growth to meet AI. We are pursuing solutions like advanced nuclear, advanced geothermal. What's important about those solutions is that they is that they bring 24/7 available capacity. We know we're we're focused on
▶ 1:27:36what's the reliability spec that you actually need for a data center? Because, you know, any data center can shift its load elsewhere. You know, just in the fiber, you know, you don't have to negotiate with a lot of angry neighbors to put to be put buried fiber in their backyard the way you do if you put a power line in their backyard. And so it and so, you know, you always design data centers so you can shift the load around if one goes off for reasons you can't control.
▶ 1:28:01And so it So, it it really, you know, so I have I have my questions are about why the market isn't 100% moving to what appears to be the low-cost point. Historically, we have a very we require very high levels of reliability, and we do have the ability to shift capacity in in time and space, and that is something we are increasingly doing, particularly as a speed to power solution to bring on capacity more efficiently.
▶ 1:28:28And with that, that's the only person I allowed to go over cuz I wasn't paying Uh I thank the witness for their valuable testimony and the members for their questions. The record will remain open for 10 days for additional comments and written questions from the members. This hearing is adjourned.