Electricity consumer groups urge FERC to improve load forecasts

A coalition of consumer-oriented groups is asking the Federal Energy Regulatory Commission to lead an effort to improve electricity demand forecasts, which they say are riddled with “uncertainty and lack of transparency.”

The issue is critical because of “exponential” load growth that will accelerate in response to new demands from artificial intelligence, data centers and reshored advanced manufacturing facilities, the groups, led by the Electricity Customer Alliance, said in a May 30 letter to FERC.

In a May 20 report cited by the groups, ICF said it expects U.S. electricity demand to grow by 25% by the end of this decade and by 78% by 2050 — driving a need for about 80 GW of generation to be added to the grid each year by 2045, double the pace from the last five years.

As a result, the consulting firm forecasts that electric utility bills could increase by between 15% and 40% by 2030 compared to 2025, depending on the utility. Electricity rates could double for some utilities by 2050, ICF said.

The grid planning needed to meet potential load growth requires “more confidence in load growth forecasts, greater transparency and standardization in how forecasts are constructed, and clearer lines of communication among state and federal regulators, transmission operators, generators, load serving entities, and customers as forecasts are adjusted,” the groups said.

Groups signing the letter include the Electricity Consumers Resource Council, the Industrial Energy Consumers of America, the Coalition of MISO Transmission Customers, the National Association of State Utility Consumer Advocates and the PJM Industrial Customer Coalition.

“Artificially low forecasts lead to insufficient infrastructure investment and resulting high costs and potential reliability problems, while artificially high forecasts risk overinvestment, unnecessary rate increases for already burdened customers, and stranded costs,” the groups said.

Load forecasts are a key input into resource adequacy assessments and can affect wholesale energy prices and transmission rates and services, according to the groups.

FERC should launch an independent forum to examine load forecasting issues or place them at the top of the agenda for the FERC-National Association of Regulatory Utility Commissioners Collaborative, the groups said.

“Examining where current load forecasting practices may be incomplete or inaccurate, and identifying best practices to improve the certainty, transparency, and consistency of load forecasting practices across regions, are important steps to protecting customers from the reliability and stranded cost risks of inaccurate forecasts,” the groups said.