Former FERC Commissioner Allison Clements says the grid we have is not the one we need. But technology and reforms are changing that.
As a young lawyer working for an environmental nonprofit, Allison Clements always thought politics would prevent her from becoming an energy regulator. But by the time Senator Chuck Schumer recommended her to replace Cheryl LaFleur on the Federal Energy Regulatory Commission in 2019, Allison had already been practicing energy regulatory law for 15 years, and she had the clean energy deployment experience the commission needed.
When she left the Commission in 2024, Allison launched 804 Advisory to help investors, developers, and nonprofits navigate energy decisions.
This week on With Great Power, Allison shares why she thinks the energy affordability crisis and the growing data center backlash is quickening the pace of regulatory reforms. She also talks about how New Jersey and other states are advancing policies aimed at deploying clean, affordable energy. And she explains why she's so bullish on the opportunities for residential batteries and plug-in solar right now.
Credits: Hosted by Brad Langley. Produced by Mary Catherine O'Connor. Edited by Anne Bailey. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. The GridX production team includes Jenni Barber, Samantha McCabe and Brad Langley.
Brad Langley:
It's certainly not unusual for interns to get stuck doing grunt work, but during law school in the early 2000s, Allison Clements found herself in a particularly rough gig.
Allison Clements:
I spent most of the summer trying to decide how many cows should have stayed on one side of the fence in this public lands debate that was happening in Wyoming.
Brad Langley:
She'd accepted an internship with the nonprofit law firm, Earth Justice, because she wanted to practice environmental law, but she quickly realized it just was not a great fit.
Allison Clements:
I have to be honest, I though to myself, "This doesn't really resonate. I'm not really connecting to this work." I wanted to do something that affected people more directly, and that's what brought me to energy.
Brad Langley:
But even in the energy space, it took time to find her place.
Allison Clements:
I did early days solar financing, wind financings, and a lot of biofuels. And I just found that transactional law was taking my eyes out with sticks. No offense to my contract friends, but again, it wasn't a good fit.
Brad Langley:
So in 2008, she returned to environmental law, this time at the Natural Resources Defense Council, where she would focus on energy regulatory policy. 12 years later, she dove headfirst into regulation, joining the Federal Energy Regulatory Commission or FERC in 2020. Turns out her background in nonprofit work and energy was exactly what the commission was looking for.
Allison Clements:
It was really important to put someone on the commission, I think at the time I joined, who had a real deep understanding of how the electricity system works, how our energy systems work, but also a forward-looking perspective on what is the opportunity for technology and innovation to come into what has been a very staid world of regulatory stasis and try to make change.
Brad Langley:
She also brought two decades of working in and learning the language of energy regulation. It's the kind of know-how she now sees as incredibly valuable, even outside of the power sector.
Allison Clements:
When I started, it was kind of like learning Portuguese. Great, you can go to some good restaurants, you can take a trip to a couple countries, but it didn't feel so central. Now I feel like we're speaking Mandarin, that the language of energy is akin to the most important language, one of the most important languages we have on this planet.
Brad Langley:
That's in part due to the many crises hitting the energy system right now, but there's also an upside. Allison says the urgency of the moment could actually break through some of the bureaucracy and DC politics that might otherwise stall grid modernization efforts.
Allison Clements:
After several decades where you didn't have the opportunity to pursue forward-looking change because those changes got made political, now we have exponential low growth for the first time in several decades. We have reliability issues and we have extreme weather bearing down on the grid and we have to solve these things. So I think it's actually becoming a less political moment relative to the challenges at hand, and that puts everybody at the same table.
Brad Langley:
This is With Great Power, a show about the people building the future grid today. I'm Brad Langley. Some people say utilities are slow to change, that they don't innovate fast enough. And while it might not always seem like the most cutting edge industry, there are lots of really smart people working really hard to make the grid cleaner, more reliable, and customer-centric. Today, my guest is Allison Clements. When her FERC term ended in 2024, she started 804 Advisory, which helps investors, developers, academics, and nonprofits navigate energy decisions. She's also a partner at a digital infrastructure advisory service, ASG. We talk about how states are addressing the affordability crisis and the growing data center backlash. And Allison shared why she's so bullish on the opportunities for residential batteries and plug-in solar right now. But first, I asked her to explain some of the recent regulatory changes at FERC.
So last fall, energy secretary Chris Wright issued a letter to FERC asking it to consider what's called an advanced notice of proposed rulemaking. The DOE wanted the commission to expand its authority over large load grid connections. In June, FERC responded, but it didn't issue one rule for all grid operators under its jurisdiction. Explain what it did instead.
Allison Clements:
There is a lot of federal state jurisdictional questions at the middle of this issue of who's in charge of new data centers and how they hook up to the grid. And so Chris and Secretary Wright said, "Hey FERC, go deal with this. You have jurisdiction over a lot of this. Go exercise it and come up with some reforms to protect customers and to make sure we can facilitate these new large load interconnections quickly and reliably." And FERC said, "You know what? We're not going to get into that jurisdictional fight. We are going to send orders to the six regional transmission organizations that we have jurisdiction over, so all of the big regional grid operators, not the individual utilities who sit outside of them. We know we have jurisdiction over the transmission issues in those regions, and so we're going to tell those regions to make five buckets of reforms that are going to make it easier and protect customers when interconnecting large load period." So we can get into the specifics, but they basically said, "Hey, we know we can get these regions moving.
What we're going to do is we're going to have them make sure that they have standardized rules for large load interconnection, that they're going to contemplate and make rules for co-location, meaning putting generation and new power supply and load together on the same site or even close by an approximate site and studying them together and studying them quickly. And then it also had cost protections and transparency related to these things so that the states could then take over and spread the costs without affecting residential customers. Finally, they had one more thing in the orders is really cool, and that is this requirement that the regions offer a non-firm transmission service. What that means is it says if you, the new data center or the new any kind of large load are willing to be flexible, are willing to stop using grid power when the grid is under periods of system stress, you can jump to the front of the line.
You don't have to go through the steady process to upgrade the grid so that every moment of every day you can get the power you need. It just means you're not going to get power during some periods. You're going to have to figure out how to deal with that behind the meter on your own. That's really exciting. So directly what FERC did was it took about 70% of the country under these RTO rules and said, "We're going to help you. We're going to try to help you get a handle on these large load interconnections."
Brad Langley:
Are there other actions you'd like to see FERC take to speed interconnection or just help modernize the grid in general?
Allison Clements:
That's a big question. There's so much, right? I think what FERC did was directionally smart. It leaves 30% of Americans outside of the RTOs without these cost protections and transparency protections and opportunities for flexible service that could benefit customers. Now the states are into those regions. Some of them are taking action as well, but it didn't get at the whole problem related to large load. When it comes to can FERC do more to modernize the grid? Oh my, absolutely. I think the first thing, and I've talked about this a lot is -- and FERC has started to take small steps on getting better use out of the system we have today. So we run the grid -- most people who spend a lot of time paying attention to the grid know this -- we run it at largely 30, 40% capacity most of the year, but it's built for those five really hot days when everyone turns on the AC or those five really cold days when everyone turns on their heat in the winter.
The rest of the time there's lots of space for electrons to flow. And so what can technology do, both hardware and software to help us get more use out of the space we already have that we've already paid for, that can help hook more stuff up without big new costs. So that's one thing that FERC has taken some steps on and in fact did refer to and require the study of in the context of these 206 orders. Another thing that we're already seeing states do is to harness local energy, harness that energy that comes from households or that could come from households if controlled from businesses and to use distributed energy resources or aggregations we're now referring to as virtual power plants to provide grid services quickly and cheaply relative to new big investment in the grid. The next thing that we really need to figure out how to manage is the technology that's running the systems.
These systems are so critical from a reliability perspective that the operational process of changing out a software system or changing a methodology of studying 20-year forward planning or studying how the grid operates in real time, those are hard things to do. Various utilities, PPL in Pennsylvania has done a really good job leading there. SPP, the Great Plains region just got a process approved by FERC to use topology optimization. There's really exciting things happening on that software front, but we're not regulating in a way that is embracing the AI enabled intelligence that we could be bringing to the grid right now. And then ultimately we need more grid. And so that's big, expensive, large lines that need to get built out.
Brad Langley:
As we've noted, these efforts have been driven apart by large connection requests from data centers and data centers and energy affordability become big political issues, and I want to talk about how that's playing out in specific states here shortly. But first, what are the biggest issues behind energy affordability in your mind and maybe what's missing from the national conversation? What's not getting enough attention in affordability matters?
Allison Clements:
I think the part that doesn't get enough attention is the underlying factors that have led us to this moment. Remember that transmission lines and power plants are ultimately paid for by utility customers. It's not like the state government general treasury writes a check or the federal government general treasury writes a check, as is the case in some infrastructure. So people who pay utility bills pay for the infrastructure to keep our grid running and our economy going, right? That's a starting point. And so for decades, there has been particular kinds of investment in the grid that may or may not be optimized investments when it comes to a cost for customer's perspective. So we have an old grid, we have a grid that was designed for less extreme weather. We have a grid that was designed for a set of resources that until the last 18 months weren't really considered the dominant set of resources that are going to be coming onto the system.
When you think about gas, large central station gas plants versus combinations of solar storage and batteries, excuse me, solar, wind and batteries.
All of those things added up together over decades has led us to a moment where we're at a generational moment, a need for investment that costs a lot of money. As that investment has been getting made and as it's becoming more critical from a national security level all the way down to your neighborhood safety, it's going to show up on customer bills. So that was the moment at which the data center demand exploded. I think that's the part that is hard to. If you want to have a conversation about who should pay and what everybody's fair share of any new grid hookup might be, you have to start from that underlying set of context.
Brad Langley:
You co-chaired New Jersey Governor Mikey Cheryl's energy transition effort. Cheryl of course campaigned on lowering energy costs. Talk about what has been done so far and what still needs to happen in New Jersey.
Allison Clements:
What's happening in New Jersey and also what's happening in Virginia is really exciting. The governors of those two states, Governor Cheryl and Governor Spamberger, both ran on a message to people in their states of, "We hear you. Energy is too expensive. We need to do something about it." And in New Jersey, they were very. I can't speak for Virginia, although it seems to be similar, they were very serious. They wanted to come in and they wanted to understand exactly how bills could come down and exactly how many months it would take and what policies need to get done. And already in the short time Cheryl's been governor, they've passed what I think is really groundbreaking legislation called the Data Center Fair Share Act that is now in the process of implementation that does a lot of great things to protect customers as other states have done.
It also puts in place some novel opportunities for third party competitive suppliers of batteries, residential batteries, of combinations of rooftop solar and batteries and thermostats and all the good stuff and participate at the utility level, not at the PJM big grid level, but at the local utility level to help provide cheaper electricity that avoids the need to purchase more expensive capacity from the regional grid. That's a really big deal. The mechanics are wild. So many states are doing great work to address these large load challenges and by virtue of doing that, bringing some really cool technological opportunities into play, I feel like we've put a pair of roller skates on an elephant. These institutions were not set up to implement these new laws quickly and they're exciting. I think most stakeholders in New Jersey especially are excited and want to make these new programs work.
The speed at which they're operating while balancing the need for due process and the need for stakeholder input is really incredible. So we've got these large clunky institutions in every state around the country and at the federal level, include my alma mater, FERC, that are trying to do these really innovative things, but the history of regulation and the history of the way that these bodies have been set up make it like this really slow moving elephant that we're trying to change.
Brad Langley:
Maybe this is a loaded question and impossible to answer, but how do we speed it up? Because that tends to be a common critique. Are there any corners that can be cut or loopholes that can be jumped through, not advocating and circumventing anything, but how do we speed this process up? Because I get that feedback a lot.
Allison Clements:
It's funny, you're getting it a lot right from the tech industry that's coming into this heavily regulated power industry and saying, "Wow, these guys move slower than molasses and they're speaking different languages and they're operating at different speeds." And I think what I'm encouraged by, sometimes when you talk about how I know so much about the grid and my colleagues know so much about the grid, it's a hindrance to being able to think outside the box and to disrupt where the opportunity is. So what I love about working with emerging technology and software companies is that they're coming from that much more kind of innovative entrepreneurial market-based perspective, and they don't know that they're not supposed to be bold in this particular proceeding or in an interaction with this utility or this regulator. And I find that really encouraging. I think it's going to be a change in the mindset of the regulators who start embracing more of that market participant approach.
It's a hard thing to do when your responsibility ultimately at the end of the day is keeping bills low and keeping the lights on because if you're a regulator in any state and you go into the grocery store or it's your kid's soccer game and you see all your friends who are mad at the cost of their energy bills, that's a really tough place to be. It's certainly tougher to then have to go and sit at a hearing in the Capitol and answer for that. So there is a disconnect. It's almost change theory and I don't know that I have it figured out, but I welcome new ideas.
Brad Langley:
We talked about New Jersey and Virginia. Any other states that you see doing a really good job tackling energy costs right now? And if so, how are they doing it that's maybe innovative or effective?
Allison Clements:
There's kind of structural, more systematic ways that it's getting done and there are kind of one-off innovative examples to point to. I do think Virginia and New Jersey are on the cutting edge. Illinois has done a lot. Oklahoma's doing some stuff now. Ohio, the AEP in Ohio cut its large load queue in half by getting more standardized, stringent, but realistic requirements for these new large loads to hook up, to get rid of the two guys in a truck phenomena, the speculative load interconnection that's inflating our load forecast. So it's really states of all stripes. Oregon passed a great law. Minnesota took early action to protect customers. In Xcel Minnesota's case, Google came in to build a data center and made a deal with Form Energy, which is the long duration storage provider Sparkfund through Xcel Minnesota, which provides distributed capacity batteries on the system.
Google paid for those batteries. Google invested in the long-term storage and made a deal with Xcel, and that's a really creative way to ensure that residential customers aren't left holding the bag for these new investments. So there's a lot of good examples to put together and point to, but systematically, I think there's a long way to go. And in particular, I think community engagement is where we need to see a lot of change.
Brad Langley:
You mentioned that you work with tech providers, and I think one of those is Base Power, which makes behind the meter residential batteries. Can you describe their business model for us?
Allison Clements:
Sure. I don't want to speak on their behalf, but they are a competitive supplier that puts residential batteries in people's homes, usually offers some sort of discount or credit upfront for doing that. They own and operate the batteries so that the homeowner does not have to worry about O&M or the batteries breaking or things like that. And then depending on where they are in the country, they provide either services to utility programs. So if a utility in a regulated state has a virtual power plant program, they're able to try and participate in that program or in a restructured states program like in the Northeast Energy Solutions. If they're in Texas where they're at home, they can be actually a retail supplier and they then become the customer's load serving entity. And they're also doing something similar in Illinois, looking at a lot of states. I think it's a super exciting business model.
It's one of many, and it gets you right into that edge of what are those little tiny regulatory changes on implementation that people don't spend a lot of time thinking about because once the law or the rules pass, everyone celebrates. There's this implementation phase to make these things work. And that's right now where I think a lot of the exciting and specific work's getting done. So Base is a great example, like many others of the new players.
Brad Langley:
What do you see happening with home batteries right now? It still feels pretty niche, but are you seeing growth in that area or consumer acceptance starting to grow? What's your take on the home battery market overall?
Allison Clements:
I'm kind of specific to one player in that market in terms of my experience, but I'm amazed at the uptake. It's such a good deal. I think if you live in a utility service territory that doesn't have a robust grid where there's been problems with outages, there's lots of states and lots of utilities where that's the case, and if you want to see a 15% drop in your utility bill each month and you want someone to give you a credit upfront for being willing to host a residential battery, I think it's pretty exciting. And because I've been in the industry long enough where we've tried all these things with advanced metering and we've learned over and over again that customers don't want to worry about this, I think putting a piece of infrastructure in your house is different and that's pretty exciting.
Brad Langley:
A lot of state houses have been considering new bills to allow plug-in solar. What's the potential for companies that sell these newer approaches to home energy use?
Allison Clements:
I love plug-in solar. It's genius. And again, it's like big and small regulatory rules that have to be changed to allow for it to happen. I don't have a crystal ball, but now really is the moment. It's not DER 1.0, it's not 2.0, it's not VPPs. It's like we're in this moment where we need every electron saved and every electron that we can procure as fast and as cheaply as possible, and we have all these providers that are bringing their solutions to the table. And whereas it would've historically been a political fight about the energy transition and these resources role in the energy transition, it's not actually that. It's just a way to help create more space, more electrons, less use in ways that move money into the right places to incentivize good behavior.
Brad Langley:
You've been a longtime advocate of grid enhancing technologies. What have you seen change in the conversation around GETs in the past few years?
Allison Clements:
Everybody loves them. I feel like I was a cheerleader and I would go to all of these conferences and talk about the opportunities that hardware and software that we collectively call grid enhancing technologies or advanced transmission technologies, things like advanced power flow controls and dynamic light ratings, which again are all designed, aimed at making more dynamic and better use of the wires that carry electrons all day by having more things flow through them more efficiently, just even so you can build less stuff in order to make room for new load and supply on the system. I think what has happened is it has gone from this cheerleading stage and this education stage. Regulators across the country have gotten hip to the opportunity and are passing laws quickly.
Brad Langley:
We call this show With Great Power, which is a nod to the energy industry. It's also a Spider-Man quote, "With great power comes great responsibility." So Allison, what superpower do you bring to the energy transition?
Allison Clements:
I think the superpower I bring is that I believe in markets. I believe in competition, and I really do think that we have to continue to make the rules fair so that market participants can find paths forward. That's the fastest, cheapest, best way. I believe in the technology, I believe in the opportunity, and I think even in states where utilities hold a monopoly and have ownership over transmission lines and distribution lines and generation, there are still ways to create competitive forces that we shouldn't give up on in the name of speed and in this moment where it does feel overwhelming. The amount of new demand that wants to hook up to the grid, it can't happen. Something has to give, but I hope that we don't give up on the opportunity for competition to be in the markets to determine the winner in these cases.
Brad Langley:
Excellent. Well, Allison, thank you so much for your time.
Allison Clements:
Thanks, Brad. This was really fun.
Brad Langley:
Allison Clements is the founder and principal of 804 Advisory. With Great Power is produced by GridX in partnership with Latitude Studios. Delivering on our clean energy future is complex. GridX exists to simplify the journey. GridX is the enterprise rate platform that modern utilities rely on to usher in our clean energy future. We design and implement emerging rate structures and we increase consumer investment in clean energy, all while managing the complex billing needs of a distributed grid. Mary Catherine O'Connor produced a show. Anne Bailey is our senior editor. Stephen Lacey is our executive editor. Sean Marquand composed the original theme song and mixed the show. The GridX production team includes Jenni Barber, Samantha McCabe, and me, Brad Langley. If this show is providing value for you and we really hope it is, we'd love it if you could help us spread the word. You can rate or review us at Apple and Spotify, or you can share a link with a friend, colleague, or the energy nerd in your life.
As always, thanks so much for listening. I'm Brad Langley.