Our rising electric bills and why we need a national loading order

Let’s cut to the chase. Your electric bills are going up. What are you willing to do about it?

Energy Secretary Chris Wright has tried to downplay and discount the existential threat of climate change by reframing the impacts of pumping billions of tons of greenhouse gases into the Earth’s atmosphere as a “side effect” of modern civilization.

(Whenever I hear this, I think of pharmaceutical ads showing images of happy people engaged in various social activities — thanks to the drug being promoted — while a background voice details side effects ranging from nausea to sudden death.)

Rising electric bills can also be seen as a side effect, but in this case resulting from a tangled mix of factors rooted in our increasingly electrified and digital economy and lifestyles. 

The difference is that electric bills are perceived as having a more immediate impact on our daily lives than the existential threat of climate change. Sudden death may not be likely, but unpaid bills, energy insecurity and potential disconnection are.

We’re only human; so, we want to point fingers, to find someone or something to blame — data centers, renewables or fossil fuels, greedy utilities — which will make it possible to find a quick and simple solution. We want the miracle drug and happy images without the side effects.

But we live in a complicated world where megawatt-guzzling data centers are just the tip of the proverbial iceberg. To really understand what’s going on, we need to ask two kinds of questions: macro (over which we may have minimal direct control) and micro (where we have the ability to make significant changes).

On the macro side, we need to to understand why our electric power industry — with its antiquated, siloed and glacially slow regulatory, business and policy structures — has been thrown into a panic by the rapid increase in data center-driven power demand? 

And when faced with this new, unprecedented challenge, why are our leaders focused on old solutions that do not meet the moment, redirecting millions of federal dollars from clean energy and innovative grid technologies to subsidies for fossil-fueled power plants and pipelines?

The questions on the micro side are more straightforward, according to Zae Perrin, vice president of customer operations at MCE, a community choice aggregation power provider in Northern California. For customers concerned about their rising electric bills, Perrin has three questions.

(You can read about Perrin and MCE in the E/lectrify Utility Bill Survey here.)

“The first thing is, when are you using your energy?” Perrin says. “The second is why and how? And the third is, what is your goal for those two things?

“Once you have those items, then you can have the true conversation of how that impacts your bill, and how much is that going to motivate change — for you as the consumer to change one, two or three or all,” he said.

Starting with the macro questions, the fact that the U.S. electric power system is in urgent need of modernization and expansion is, at this point, very old news. Former President Barack Obama called for the buildout of a “clean energy superhighway” in 2009, with $3.5 billion in federal subsidies for digital “smart meters” as a first step.

Those digital meters laid the foundation for today’s smart thermostats and energy management apps that can give consumers more control over when and how they use electricity.

But the large-scale grid upgrades to local and interstate power lines have been slower to come for a variety of reasons, such as utilities’ long-standing aversion to risk, legislative and regulatory inertia and local opposition, aka NIMBYism. Policies and actions for modernization, when they have come, often have been more reactive than proactive — for example, the grid upgrades in Texas following the multiday power outages of winter storm Uri in 2021.

But data centers and artificial intelligence are changing the game — fast. We must meet the growing demand spike from AI — and manufacturing and electrification — with new generation and grid expansion.

(It is worth noting that the issues we are facing about demand growth in the United States are nonexistent in China, which has overbuilt all parts of its electric power system, from generation to transmission. According to a recent article in Forbes, the country has close to twice as much power online as it needs, and new AI data centers are seen as “sponges” to soak up excess electricity production.) 

If we want all the goodies of our digital economy — from email and TikTok to AI that can research and draft reports for us in minutes — we will have to pay for the dynamic, flexible electric power system that makes them possible, and that means higher electric bills.

So, if our electric bills continue to go up — as they likely will  — the questions then become: what are the best strategies for minimizing the increases now and ensuring the extra dollars we pay are spent smartly and in ways that will minimize future bill increases?

And how do we encourage proactive planning for both?

California has something called “the loading order,” which in simplest terms means that in the face of rising electricity demand, you have to make sure you are using the existing system as efficiently and effectively as possible before you even think about building anything new. 

The official definition from the California Public Utilities Commission is more technically precise: “The loading order consists of decreasing electricity demand by increasing energy efficiency and demand response, and meeting new generation needs first with renewable and distributed generation resources, and second with clean fossil-fueled generation.” 

Might a similar, national loading order provide the guidelines we need to meet the rapid growth of demand on our electric power system, while minimizing bill increases?

Certainly, efficiency can have immediate and significant impacts on consumer electric bills, without compromising personal comfort and convenience. We have direct control here, from switching to LED light bulbs and turning off computers when not in use to adding extra insulation in old attics or replacing heating and cooling systems with heat pumps.

In terms of proactively planning for the future, efficiency means things like adopting the most efficient building codes at the state and local level, especially for low- and moderate-income housing. The standard efficiency code for residential buildings — the International Energy Conservation Code — is updated every three years, most recently in 2024. Yet, some states are still using the IECC code from 2018 or even earlier, and inefficient buildings, by definition, can lock in higher electric bills for the families that live in them.

At the system level, efficiency means using advanced “grid-enhancing” technologies to increase the amount of electricity our existing power lines can handle safely while we plan the most efficient, cost-effective and environmentally friendly ways to build new lines. 

Trump came into office pledging to slash consumer electric bills in half. Instead his administration has slashed federal funds intended to help states update building codes and regional grids and provide rebates for low-income families to make their homes more efficient. 

The war on words 

Each step in the loading order has similar opportunities for personal and political decision-making and actions that could minimize utility bill increases right now and in the future. 

Digital technology has transformed traditional demand response programs — which turned off air conditioning for several hours on hot days — to sophisticated demand management programs. Smart thermostats can be used to turn down the AC a few degrees, saving power and money without leaving families sweating. 

Managed electric vehicle charging programs can help decrease stress on the grid at times of high demand by shifting when EV owners charge their vehicles to times of low demand.

In both cases, the shift in demand could potentially be integrated as part of a virtual power plant that provides flexibility and reliability to local grids and compensates consumers for participating in such programs. Plus, with AI, we know these technologies will only get faster and smarter.

Similarly, solar and storage on residential rooftops can quickly cut household electric bills or be aggregated into virtual power plants. At the local and regional level, solar and storage microgrids can ensure the lights stay on in emergencies and, again, provide time for long-term grid planning and expansion.

None of what I am saying here is new. Nor is the fact that Trump and his supporters have no interest in any approach to new generation and grid expansion that does not prioritize the use of fossil fuels, which could lead to the highest and longest-lasting increases in consumer electric bills.

Rather, what a loading order like Califorina’s does is open up the time and space for alternate, more effective and less expensive options to emerge and, if they are successful, reduce the need for fossil fuels. In fact, the loading order was established as part of the state’s ongoing efforts to reduce greenhouse gas emissions and decarbonize its electric grid, underlining the connection between energy use and climate action. 

Trump’s attacks on clean energy and even energy efficiency are intended to downplay and discredit any such approach. 

Wright recently issued a memo to Department of Energy employees — and then quickly denied its existence — telling them to avoid using terms like “climate change,” “clean energy” and “energy transition” in agency reports or other official documents.  Similarly, Trump’s war on information about clean energy or anything like a loading order is aimed at removing words and ideas about climate change and alternatives to fossil fuels from official and public narratives about demand growth.

Options like solar and storage and grid-enhancing technologies may still raise electric bills, but not as much in both the short and long term. Fossil fuels should be our power source of last resort, not a knee-jerk, panicked effort aimed at political retribution.

So, again, let’s cut to the chase. Our electric bills are going up. We must ask the right questions and insist on answers that truly benefit our economy and environment, protect our most vulnerable citizens and continue to challenge us. 

How and why do we use electricity? What are we willing to change?