The US power grid runs at about 50% capacity on average — built for its worst day, underutilized every other day. As demand surges from data centers and electrification, utilities are racing to build more infrastructure. But Ian Magruder, who heads the new industry-backed Utilize Coalition, argues there's a cheaper, faster path: better use what we've already built — it will enable faster growth and bring down ratepayer bills, potentially by billions.
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David Roberts
Hello and greetings, everyone. This is Volts for April 1, 2026: “Using more of the grid we’ve already built.” I’m your host, David Roberts.
The US power grid is built and operated around a simple principle: as long as they’re willing to pay for it, anybody who wants power gets as much as they want, when they want. Unlike highways or broadband lines, where traffic congestion occasionally slows you down, you get your electrons the second you plug in.
Because it must accommodate anyone at any time, the grid must be built big enough to reliably meet the heaviest demands that might conceivably be placed on it. It must be built for its worst day — an August afternoon with 100-plus degree temperatures, everyone running their AC and charging their EV at the same time.
While the benefits of this kind of system are pretty obvious — it’s quite useful, and conducive to economic growth, to have effectively unlimited power at your fingertips whenever you want — it has a significant downside. If you build the grid big enough to smoothly meet the demands of its worst day, most of that grid, most of those power plants and transformers and substations and wires, will be grossly underutilized most of the time. Most days aren’t worst days.
Across the whole country, on average, we’re using about half the grid’s capacity. That’s low relative to the last 50 years. And now utilities are looking at a surge in new demand from data centers and saying, we need to build more: more power plants and transformers and substations and wires. All of this will be expensive, all of it will be slow to build, and all of it will eventually show up on power bills — which is a big part of why the average American’s electricity costs have risen about 25 percent in the last six years, even as the cost of actually generating power has fallen thanks to renewables. It’s the infrastructure.
What if, instead of always building more — or at least, before building more — we tried to use what we’ve already built a little more efficiently? My guest today, Ian Magruder, heads the Utilize Coalition, a new industry-backed consortium (including Google, Tesla, and many others) making just that case. We’re going to talk about what boosting grid utilization actually means in practice and what it implies for electricity bills, the clean energy transition, and US politics.
With no further ado, Ian Magruder, welcome to Volts. Thank you so much for coming.
Ian Magruder
Thanks for having me, David. Excited to be here.
David Roberts
Ian, I’m so excited about this. As I was sitting thinking about how to introduce all this, I was thinking of saying something to the audience along the lines of, “I know this sounds super, super technical and nerdy, but it’s really crucially important.” Then I realize I say some version of that before every single one of my pods.
Ian Magruder
Almost every pod.
David Roberts
Flirting with self-parody. I’ll just say this is complicated, but I really think this is a super important, super timely debate to be having, a discussion to be having right now. This hits all the hot issues in the power world, in the energy world right now, so people should just focus up.
Ian Magruder
Yeah, I think we have a chance to make grid utilization sexy, or at least interesting in this moment. For those who are skeptical in the beginning here, I hope we have gotten them juiced and excited by the end of this.
David Roberts
Hang on. The word utilization really is just so unfortunate, but there it is. All right, what do we mean when we are talking about grid utilization? I think when I say that the grid utilization is at 50%, some people might imagine a big power line, “50% of the time it has power running through it and 50% of the time it doesn’t.” But that’s not quite right. Help us understand what we mean when we’re talking about utilization.
Ian Magruder
Sure. I think many of your listeners may be familiar, but we broadly think about the grid in three sections. You have generation — how we make our power; transmission — how we distribute it across long distances, high voltage; and then distribution — how we bring it to our homes, businesses, the last mile, so to speak.
The way we think about grid utilization is holistic. There are different ways of measuring this, but we think of it as the total throughput on the grid. This report that we have just released from Brattle that I think we’re hopefully going to get to outlines one way of measuring that which is pretty straightforward.
David Roberts
Which is just to lay it out plainly: the total throughput that the grid is capable of divided by the electrons actually running through it. How much power is actually running through it relative to how much power it is capable of putting through.
Ian Magruder
Exactly. They define system utilization as a percent as the total energy delivered or produced over available system capacity over the same time period. What’s important here, the number as a whole is important, the percentage. But it’s also important to think about this at a granular level because in any given geography you are going to have parts of the grid that are more utilized and less utilized. That’s where you have interesting opportunities for efficiencies.
David Roberts
This is not evenly smeared. Utilization varies dramatically across geographies. It is 50% on average across the country.
Ian Magruder
Exactly. The simple way to think about this that we talk about is just to make it more real for people. As an analogy, and this ties into the affordability piece, is to think of an airplane. If we build an expensive airplane or a fleet of airplanes and we’re flying them with half the passengers on any given day, those tickets are going to be expensive. If you can fill more of those seats, the prices will come down.
David Roberts
Let’s spell out why they are expensive. In addition to paying for your seat, when you buy a seat on an airplane, you are also paying some small percentage of the fixed costs required to keep that plane running. If you sell more tickets, more people are splitting up those fixed costs of keeping the plane running. The more passengers you cram in, the lower the per passenger price.
Ian Magruder
Exactly. Before someone — I’m sure we’ll have a distribution engineer listening to this or someone who may have an issue with the analogy — it is a slightly oversimplified analogy, of course.
David Roberts
Ian, I ran through so many analogies when I was thinking about this for my intro. I ended up abandoning and not using any analogy because they are all not quite right. Another one I think is vivid for people is, “What if you built highways on the principle that no one should ever have to slow down at all?” Then you are like, “What is the maximum number of people who are ever going to be on this highway? Rush hour, bad weather, busy time of year, whatever.” Let us build a highway wide enough to accommodate all those people so that they do not have to slow down.
Then I think people would intuitively see the vast majority of the time, there wouldn’t be nearly that many cars. All the cars that were on that road would be paying for all that extra asphalt to maintain all that extra asphalt. That is also another analogy. There are like 10. There’s a plumbing analogy we could use.
Ian Magruder
There are many different ones. Just to finish the plane one, though, you could fill a plane. You could fill every seat safely and fly it. The grid is different. You want a little bit of flexibility. Our goal is not 100% utilization here. The important thing to understand is that our grid in America is underutilized. There is extra capacity sitting there. In our view, there is no state in America that has perfectly utilized its grid or optimized it. There is opportunity everywhere.
We can have debates about how far you can push it, etc. We’re going to have technical working groups thinking through these things, etc. But there’s opportunity now and everywhere. Let’s work on that in the medium term.
David Roberts
50% is low, low by historical standards, low relative to even 20, 40, 50 years ago. At no point is it ever 100. The right level is going to depend on a lot of things. But I think it’s safe to say almost every grid has some spare capacity. I think we can also say categorically, and this is the whole point of your effort, that any effort to exploit and make use of already existing capacity is almost by definition going to be cheaper than building new capacity. I think you can say that categorically.
Ian Magruder
That’s right, exactly. That’s a really important point because we’ve historically built our grid to peak. In our view, that is not some grand conspiracy, it’s just how we had to do it. To your point in the intro, we have to ensure that when someone flips the lights on, they’re going to come on, even in the hottest summer day and the coldest winter morning or night. We didn’t have the technology that we do now to enable a more flexible grid, but we have that technology now. Our policies and the way we plan the grid haven’t fully caught up with the capabilities we have now to get more out of the grid we have.
David Roberts
Is there a simple explanation for why grid utilization has been falling on average for 40 or 50 years now? Is there a simple explanation for why the grid is currently so underutilized?
Ian Magruder
I hesitate to weigh in on the exact reasons. There are probably other guests you could bring on, grid anthropologists who may have stronger opinions on this. With our campaign, we’re a little less focused on the why of the past and more on the, “Okay, what do we do about this now and how do we meet the moment?”
David Roberts
Greater utilization has many benefits which we’re going to get into. But I’m curious to start with a comms question, a PR question, which is, you could pitch this as, “We have a plan for getting data centers online faster.” Or you could pitch this, “We have a plan to put some downward pressure on ratepayer bills.” Or you could say, “We have a plan to accelerate the clean energy transition and reduce greenhouse gases.” All of those would be, to some extent, true. What are you leading with? What do you think is the most powerful message? What is the headline message?
Ian Magruder
I love this question because it’s one that we’ve thought about a fair bit. We’re focused on affordability. We think that’s —
David Roberts
You and everybody else.
Ian Magruder
People are throwing the word affordability around a lot and slapping it around their favorite pet project from the last decade or more. But this is really something that is designed at its core to drive affordability. This Brattle study shows that a 10% increase in grid utilization could drive over $100 billion in savings for Americans over the course of the next decade. It’s very significant. This is not a playing on the margins thing.
David Roberts
I want to return to the question of scale later because it is something that vexes me.
Ian Magruder
To get to your point on messaging, there are lots of different reasons why people may care about utilization. One of the things that’s exciting with this campaign is that we can welcome them all to the table. In other words, if you’re someone who believes that America needs to win the AI war with China and we want to bring new domestic manufacturing to our shores, then utilization is your issue. If you’re someone who believes that we need to electrify everything and we need more power for that, utilization is also your issue. There are people across the political spectrum who, for different reasons, care about this and are talking about it. Republican governors, Democratic governors.
We have an opportunity here to do something that I’ve described as cross-partisan. I’m intentionally saying that rather than bipartisan, which is to reach people in different states. The reason I say cross-partisan is, in this country now, we live in such a polarized world. When I think of bipartisanship, I think of the classic, “You have a senior senator from one party and a senior senator from another, and you hash out some compromise solution.” That may be the case in certain places.
But if we run this bill in a state to prioritize grid utilization, and it is a Republican governor, Republican legislature, you may not need a single Democratic vote to get that done. Or you run in a Democratic state with a Democratic governor, you may not need a single Republican vote to get it done. It does not need to be bipartisan per se. It does need to be cross-partisan. It needs to be something that people from different persuasions, backgrounds, and interests can see themselves as a part of. I think affordability is the thing that connects that.
Our tagline, if you go to our website, it says, “America needs more power more affordably.” Most people, policymakers, and the public would acknowledge that we are going to need a lot more electricity in this country in the coming years for all sorts of reasons. I am a little less concerned with what all those reasons are and more about, “Given that we need more power, how can we do this in a way that is not going to break the bank?”
David Roberts
I’m going to return a little to the coalition politics later because they are really interesting and I want to discuss who is against this.
Let’s talk about the grid currently being underutilized and the basic affordability argument is the same as the airplane. You get more passengers in the airplane, you’re splitting the fixed costs over a larger group of people. Same exact thing on the grid. The more you utilize the grid, the more you’re sharing the fixed costs of maintaining the grid across a wider group of people. That’s the affordability argument.
What are the mechanisms whereby we can boost grid utilization? How do we use more of the grid more of the time? The way to frame this, I think, is, and we mentioned this in the intro, the size of the grid is pegged to the size of the peak of the highest peak. That is the size of the grid. When you are thinking about how to use more grid, you are mostly thinking about reducing peaks. I imagine most of the policies are going to circle around that, but I will just throw it open to you. What are the mechanisms for increasing utilization?
Ian Magruder
There’s a wide range of things that can increase grid utilization. Everything from distributed resources, demand response, grid-enhancing technologies, advanced conductoring, large load flexibility, etc. Let me just walk through a few examples from some of the organizations that are coming together to support this effort.
David Roberts
As a preface, there are policies I can imagine increasing utilization on distribution grids. Then there are policies I can imagine increasing utilization of long-distance transmission, like the aforementioned grid-enhancing technologies. From what I can tell from your literature, the coalition is mostly focused on the distribution side, on DERs, VPPs, that kind of thing. Although you do mention transmission and you do mention reconductoring and grid-enhancing technologies in the literature. I’m curious, on the distribution versus transmission thing, is the coalition attacking both sides of that?
Ian Magruder
Yeah, we’re looking at this holistically. Like I said in the beginning, distribution, transmission, generation, we want to look at this as the whole picture. You’re right, there are certain technologies that can help with certain parts of it. I wouldn’t want to over-index on the folks that are supporting the effort because we’re really taking a tech-neutral approach. This actually gets into the policy strategy. Instead of trying to mandate a specific technology, we think that a smarter way to do this is to really prioritize grid utilization as a metric and a guiding principle, and then let the best, lowest-cost technologies win the day.
David Roberts
Get to policy. First I want to help people understand when we say DERs, people are familiar with these: EVs, EV chargers, solar panels, home batteries, all we talk about all the time on Volts. Say a little bit about why using those distributed resources increases utilization. Spell it out a little bit for people so they understand the connection.
Ian Magruder
Let me walk through a handful of examples from the various companies that are involved in this effort to help illustrate some of the technologies that can help with this. Google, they’re building data centers. They just announced a gigawatt of flexibility that they have enabled on the grid. They’re committed to flexibility through different mechanisms. They’re putting batteries on site at their data centers. They are finding new ways to move compute around so that you can ramp up and down data centers within certain limits. It’s not possible everywhere.
Tyler Norris, who is now at Google, wrote this seminal study while he was at Duke that I think a lot of people read and got a lot of buzz, which essentially said that if we can limit the usage of these data centers just a few hours a year, you can bring them online so much faster without meaningful upgrades that are expensive and time-consuming.
David Roberts
The day we’re recording this, which is Wednesday, March 25, I released a podcast with Jesse Jenkins and Astrid Atkinson specifically about data center flexibility, running in some detail through all these options: having a little on-site power of your own, having some flexibility in your compute, and then having flexibility on the utility side, the flexible interconnection arrangement. That’s all on the, I guess what you’d say, the transmission end of things.
Ian Magruder
That’s one example. To further illustrate this point, Google recently announced a new data center in Minnesota. Part of what they’re doing with that is with Form Energy — the largest battery deployment in the world.
David Roberts
Long duration.
Ian Magruder
Long duration, exactly. The other thing they are doing that I think was not picked up quite as much is they are also putting $50 million towards distributed batteries in the community in Minnesota.
David Roberts
As I’ve been preaching for over a year now, they are buying distributed capacity.
Ian Magruder
Exactly.
David Roberts
Which means household-level capacity.
Ian Magruder
Right. What they are doing with that program through SparkFund in this distributed capacity procurement is literally putting batteries in the community. It is front-of-meter batteries, not necessarily in homes in this case, but in church parking lots. You could imagine batteries behind a Walmart or wherever in your community about the size of a shipping container. These are not a giant field of utility-scale batteries the way that California and Texas are doing it.
David Roberts
It’s that underexploited middle. It’s not residential, it’s not utility-scale. It’s whatever your 20-megawatt front-of-the-meter community scale, I guess. I don’t know if we have a technical term for it.
Ian Magruder
Exactly. That is a really interesting and exciting model because it also creates some resiliency in the community. Having batteries spread out as opposed to just located in one... It gets to this question you had around, “How do you enhance utilization?” There are instances where instead of upgrading an entire distribution circuit, you can plop a battery somewhere and manage it more dynamically. That may be more cost-effective. A few other examples, Renew Home has the ungodly number of Nest thermostats that they manage.
David Roberts
We had them on too. I think they run a big VPP mostly composed of thermostats.
Ian Magruder
Exactly. Those are the kinds of things you can preheat or pre-cool your home, depending on when the grid needs that power. In a lot of places they have gigawatts of capacity across the country now that is just waiting to be turned on if we have the right incentives in place. Span has, I think you’ve brought them on your pod as well, smart electrical panels that can dynamically manage the appliances in your home and ensure that you’re using less power when the grid electricity is more expensive and the grid needs it. You shouldn’t have to manage this yourself. It can happen in the background. Carrier is now putting batteries in heat pumps.
David Roberts
Yeah. They are putting them in air conditioners.
Ian Magruder
Air conditioners, exactly.
David Roberts
Air conditioners and heat pumps are going to be battery-enabled. I’m going to do a pod on that for sure. Air conditioners especially are ubiquitous. They’re everywhere. If Carrier put a battery in every AC it sold, that is overnight the biggest VPP on the planet, I think.
Ian Magruder
Absolutely. If you imagine the hottest summer day, which is when peak demand typically occurs in most parts of the country, or the coldest winter morning, in either case, it’s heating and cooling that tends to drive that peak. If you think about if every HVAC unit in America one day was battery-enabled, there are hundreds of gigawatts of capacity that we could enable.
David Roberts
That’s such a big deal.
Ian Magruder
A final example on this, Verrus is building data centers that are totally flexible, battery-enabled, low water usage, etc.
There are multiple solutions here that can help drive affordability and better grid utilization. Our approach is, instead of picking any one of those, although I’m clearly very excited about all of them and there are many more we could mention — advanced conductoring and dynamic line rating, when we think about grid-enhancing technologies — there are so many things we have now. Another important point is that the technology has come a lot further. We’ve been discussing in this country non-wires alternatives for a decade.
David Roberts
Demand response — all this stuff is very old.
Ian Magruder
If you talk to the companies, they get frustrated because they feel they have been in many cases stuck in pilot purgatory and their technology is proven now. We don’t need to keep piloting it. It’s ready for scale.
David Roberts
As Jigar Shah is fond of pointing out, they have been using this stuff in normal operations in Europe for years now. They are well beyond the pilots.
Ian Magruder
Exactly. Now we have an opportunity and a need to scale it up. The question is, from a policy standpoint, there are different ways of accomplishing this. One thing that has been tried in many states is the equivalent of an 80-plus page VPP mandate bill which may be well-intentioned but utilities tend to hate, regulators are skeptical of, and we think in general has not been the most successful policy approach.
Our policy approach is to say, “What if instead of mandating any one given technology, we set utilization as the North Star, let the best lowest-cost solutions win and not set up more individual pilot programs, but really incentivize this at scale and let us really bring these resources to bear?”
David Roberts
You discuss a wide variety of solutions and there are a wide variety. Transmission versus distribution, household versus front-of-the-meter. There are a million different ways of increasing utilization. But in the end, I’m going to ask this question. Isn’t it mostly just putting batteries everywhere?
Ian Magruder
I think that is a big part of it.
David Roberts
Aren’t all grid problems, in the end, just about putting batteries everywhere?
Ian Magruder
That is definitely a big part of it.
David Roberts
They are a piece of every solution you mentioned. You might have noticed every individual solution — the little battery hiding in it.
Ian Magruder
Some people are starting to talk about batteries as the next shale boom. This is something whose time has come. The price of batteries has fallen tremendously and a lot of people haven’t quite wrapped their heads around this. We’re going to need batteries everywhere: businesses, homes, front-of-meter, behind-the-meter, in your vehicles, all over the place. Batteries, thankfully now that they’re so much cheaper and still coming down in cost, have the potential to solve a lot of this.
David Roberts
One aspect of using your existing resources more — the Brattle report raises this — if your existing resources are primarily fossil fuel-based, then utilizing them more means running fossil fuel plants more often, increasing the capacity factor of fossil fuel plants, which means more emissions. There are some cases you can imagine where greater utilization would yield more greenhouse gases, at least to begin with. How do you think about the relationship between utilization and decarbonization?
Ian Magruder
From our perspective, the most juice to squeeze is really on the distribution and transmission side. If you’re looking at this system-wide, that’s where you’re going to find the most savings and the most ability to increase utilization. There may be instances where you end up running your existing generation fleet, whatever that may be, at a higher utilization level if you choose to manage it system-wide. There’s a question, given that we need more power, if a certain state is, if you’re looking at this through a decarbonization lens, going to use an existing plant, let’s say a gas plant for instance, at higher utilization or build a whole new one.
What’s better? Do you want more gas plants or do you want to use the ones that you have a little bit more?
David Roberts
Certainly better than building new fossil fuel plants.
Ian Magruder
For what it’s worth, our campaign is not — we’re not a climate group, we’re not a clean energy org. We’re focused on affordability, capacity, speed to power. If you want to look at it through that lens, I think most environmental groups would much rather not build that additional fossil plant.
David Roberts
Also, the fossil plant is expensive and slow. We forget it sometimes, but we are in an enviable position in that all these problems that all the people with money want to solve, the clean stuff solves faster and better and cheaper. You don’t even need to talk about the cleanness of the clean stuff. It just performs better.
The thing that Brattle says is, and we should say this about the Brattle study, it is highly abstract. Any real-world grid utilization scenario is going to have a lot of idiosyncratic characteristics. This is just a directional study. The Brattle study models, it says 10% improvement in system utilization produces a 3.4% rate reduction. That’s not a small rate reduction. I think it’s meaningful.
What I want to wrap my head around is how big of a deal a 10% improvement in system utilization is. Do we have any sense of how heavy a lift that is? It will obviously vary from grid to grid. Is this the kind of thing where there are a few switches they could flip and boost it 10% tomorrow, or is this the work of years? I want to wrap my head around how big of a task this is for utilities.
Ian Magruder
Just to situate ourselves, the Brattle report we’re talking about is called The Untapped Grid. Those who want to dig in and read the whole 40 pages can —
David Roberts
It’s linked in the show notes, as they say.
Ian Magruder
Fantastic. Dig into it and I think you’ll enjoy it. The 3.4% reduction in rates may seem like a small number, but to my earlier point, extrapolated across a decade that can amount to over 100 billion. They model out 110 to $170 billion of savings. It’s not a small amount when you think about it at the macro level. That 10% increase in utilization is also very significant. You’d have to get a modeler on to quantify all the things that have to happen.
In aggregate, we would have to meaningfully shift the way we manage the grid and the resources we’re using, but it’s achievable. I think a 10% increase is absolutely doable in this country. We could debate 20, 30, 40%. Maybe that’s less likely or realistic. But this is something that we can do as a nation and individual states can act on it, and the technology is here.
David Roberts
Let me push you into an area that you might not be totally comfortable talking about, but I think it’s important, which is the role of utilities. As I’ve been thinking about this, I’ve been thinking, “Who could be against this?” You spent billions of dollars building a bunch of infrastructure. Who’s going to argue against using it more efficiently? What would be the basis for any such argument? I was trying to think about it, who’s against this? Who politically, who are you fighting?
One thing that came to mind is, there are utilities. What people come back to over and over again, something I’ve discussed on this pod a trillion times, is the basic financial incentives of utilities. They have these profit margins that they make from spending on infrastructure. From an IOU’s perspective, an investor-owned utility, they make more money if they spend more money. If you are telling them instead of spending more money, utilize what you’ve got more effectively, you are pretty directly telling them to make less money.
I noticed that the Brattle report and all your literature, you dance around, you don’t talk about utilities and utility incentive structures very directly. I totally understand that since every member of your coalition has to work directly with utilities and you don’t want to stick your thumb in their eye, but is not the incentive structure of investor-owned utilities part of the problem here?
Ian Magruder
I’m glad you asked about this because I’m very comfortable talking about it and I think it’s a really important part of how we get this done. We’ve had some surprisingly productive conversations with utilities around this and I think there are a number of reasons for that. In many parts of the country where we are seeing rates increase, they know affordability is real and they want to do something about it. Their perspective is there are a lot of bad ideas being thrown around. Whether that’s an immediate freeze on all rates or —
David Roberts
Did you see just today Sanders and AOC came out with a bill for a national moratorium on new data center construction?
Ian Magruder
There you go. We should get into that as well, because of new demand on the system. This is worth a quick aside.
David Roberts
Let’s do this here because this is counterintuitive.
Ian Magruder
Anyone who’s taken a high school or college econ class thinks that anytime demand goes up, prices in a supply-constrained environment will inevitably go up. That is the case with most markets. Electricity is different because we have paid for so much of the grid already. You, me, David, all of our listeners. Anyone who’s paid a utility bill has helped pay for the grid. Now that we’ve paid all this and we have all this infrastructure, if we can sell more electrons over the grid we have, or to your point about the airplane analogy, fill more seats for the airplane we’ve already paid for, then prices come down.
Whether it’s new, large load through data centers or manufacturing or electrification or whatever it may be, load does not — and this is a key part of the Brattle study as well — new load coming online can actually decrease electricity prices if we increase utilization. That’s the big decision we have as a country right now in this moment: we know there’s new load coming online. How are we going to handle it?
David Roberts
Just to underscore this, it is not a mechanical reaction that if you add a data center, people are going to be paying more. It is possible that you could add a giant chunk of new demand. If that new demand serves to increase average utilization of the grid, you will lower average per unit costs on that grid. In other words, there are circumstances where adding a data center to your grid could lower your costs. That could happen. That is not inevitable either. Neither effect is inevitable or mechanical, but we can make data centers work for us to increase utilization and thereby lower costs. That is a very important point.
Ian Magruder
Coming back to your question around utilities and how, we are in our early stages of having a lot of these conversations, but our grid is aging. We do need to make upgrades to the grid. We are not a group that is saying, “Don’t build any new generation or stop upgrading the grid.” Those things are going to have to happen.
David Roberts
Can we have an aside about that, too? This is the aside portion of the podcast. I want to address that directly, too. There is a sentiment in some circles in D.C. among, I guess you would say, the abundance-coded bros. They want abundance. They want more, more, more. They say we need to grow, grow, grow. That’s their fixation.
When environmental groups, green groups respond to them, “Hey, instead, let’s increase utilization,” it sounds to them, or they perceive it as a backdoor degrowth strategy, as a way of avoiding building more, as a way of avoiding expanding the grid, as a way of avoiding building, because they think green groups are allergic to building.
Once again, I’ve made this point several times now, but just once again, make the point that the utilization push is not that. You and your colleagues at Google and Tesla are not secret degrowthers. You want a better, bigger, higher-functioning, higher-throughput grid.
Ian Magruder
That’s right, exactly.
David Roberts
I just want to clear that up.
Ian Magruder
Deploying more Powerwalls and Megapacks from Tesla and all the other technology we discussed earlier is not a degrowth strategy. We’re going to need more infrastructure to help us take advantage of the infrastructure we have and use it better and at lower cost.
David Roberts
Even if we push utilization up, and again, we’re not sure how high it can go, but even if we push it up, with data centers plus electrifying all of the transportation sector, plus electrifying all of the heating and cooling sector, we’re still going to need more, more, more. We’re still going to need more generation, more lines. That’s still going to happen. But it just makes economic sense to solidify and bolster what you have already. You don’t want to build a giant edifice on a rickety foundation.
Ian Magruder
Exactly. From the utility standpoint, they know that we need to keep upgrading the grid in certain places, and if we don’t get better at utilization and rates keep going up, they are going to have a hard time doing what they want to do.
David Roberts
The alternative here is just build, build, build, which means higher, higher, higher bills. They know, we know, politicians know, everybody knows right now that’s just not politically tenable. Utilities are going to get burned at the stake if they respond to increasing demand purely through building more.
Ian Magruder
Exactly. We’re coming in and saying, “Let’s do this in a tech-neutral way. Let’s not tell you or mandate specific solutions. Let’s set some metrics that we can all measure this by.” This is what this new legislation in Virginia, which I hope we have a second to talk about, does — incentivize grid utilization by measuring it for the first time and formally putting it in the planning process.
David Roberts
I want to talk about that now. But first I want to push a little bit more on utilities.
Perhaps it is true that utilities recognize that they can’t politically just build, build, build. It’s just not tenable. Perhaps they have some incentive not to just build, build, build. Nonetheless, the basic incentive structure remains. Would you acknowledge that that basic incentive structure pushes in the opposite direction from what you are trying to do?
Ian Magruder
Yes. That’s a really important final point on the utilities question: how can we make this make sense for them from an incentive standpoint as well? There are different ways of achieving that. Some people want to blow up the entire utility regulatory compact. That is not our position. We think that even within the system we have today, which in our view has served us quite well for a long time, there are subtle changes we can make that would better incentivize utilities to move in this direction. We’re having those conversations as a coalition.
David Roberts
One way of doing that is just saying, “Hey, utilization is x. Make it x plus 10 within 10 years.” If you want to give the utility an incentive, passing a law that says it has to do this would be a great incentive.
Ian Magruder
That’s right. There’s also shared savings models, one thing we’re exploring or discussing. You could imagine if a specific policy provides significant savings for end consumers.
David Roberts
Brattle pitches this — that utilities could make more money doing that.
Ian Magruder
Perhaps, depending on how you structure it. Those are things we have to take seriously because this is how a lot of the companies have been thinking about this. They are tired of going to war with utilities, fighting over these things, slow deployments.
David Roberts
Everybody’s exhausted by that. I have to assume the utilities also. Everybody sees what we need to do now, and we’re all saddled with these weird legacy regulatory structures.
Ian Magruder
Exactly. Let’s come up with some better incentives that make sense, that are true win-wins for consumers, for small and large load, and for utilities. We have an opportunity to do that.
David Roberts
Let’s talk about Virginia, because I don’t know if you planned it this way, but it’s quite handy to launch your coalition on the back of a big victory. The Virginia bill is a big and explicit victory — utilization is not a footnote in some larger bill. There is a bill about utilization that passed when some other energy bills didn’t in Virginia. Tell us about how you went about assembling a coalition for this in Virginia. Who is in that coalition?
Ian Magruder
This story starts with the governor because the newly elected governor of Virginia, Abigail Spanberger, decided to put this on her energy affordability agenda.
David Roberts
Affordability is huge there. Virginia data centers. If any state in the union where this is a severe top-line problem, it is Virginia.
Ian Magruder
Exactly. A number of groups, ourselves included, have been talking about grid utilization, trying to plant this idea. There’s a brilliant woman named Molly Knoll who helped write the first draft of this legislation before she was working with us and now she’s helping our effort, which I’m deeply grateful for. The governor decided to propose this bill and we were able to do something that I think is challenging and unique, which is we actually sat down with the utilities and the environmental groups and various stakeholders and got a little bit of their input and there was some back and forth. It’s a one-page bill and anyone can read it. You can look up SB621 in Virginia, which passed through both the House and the Senate and received bipartisan support.
What it does is two things in essence. One, it for the first time requires utilities to provide grid utilization metrics down to the substation and feeder level. Two, it allows these metrics to be used for the first time in the planning process. It rolls it into the IRP and the formal planning process and allows the commission and the utilities to find the best, lowest-cost solutions. It mentions a whole bunch of the solutions we’ve talked about here today as potential contributors towards improving grid utilization, but doesn’t require or mandate any of them. We see this as a really important step in the right direction towards incentivizing utilization. I think the Commission’s excited about it.
David Roberts
Question about this bill, when we talked months back about this all coming together, me and you and Pierre Lafarge discussed possible policy tools to do this. One of the things we discussed was the equivalent of, I know Volts listeners will be familiar with renewable portfolio standards, you tell the utilities in a state, “You have to increase the percentage of clean generation on your grid by X amount by X year.” Very familiar policy. Most states have them.
What we discussed was the equivalent of an RPS, a utilization standard, like grid utilization in your utility area is X. Raise that by X percent by a certain year, the equivalent of an RPS. This is not that. The Virginia bill does not mandate that the utilities increase utilization. I think it works on the assumption that if you make this transparent, if you publish the metrics and then you’ve got a PUC that’s keen to do this, it’s going to happen anyway. But we should make a note, it does not mandate any particular level of utilization.
Ian Magruder
That’s right. For what it’s worth, I’m not sure that an RPS for grid utilization is the right way to think about this. Our perspective is that measuring this is really the key starting point and then finding the right ways to incentivize it so that it is a win for all parties involved. This does admittedly put some of the onus on the commissions to get this right.
David Roberts
Yes.
Ian Magruder
You’ve had other guests on your show talk about utility commissions that regulate utilities —
David Roberts
They vary in quality.
Ian Magruder
And why they’re important. People have described them as the Supreme Court of Energy. We’re putting some of the onus on them to ensure that this works well. There’s going to be important regulatory work from a wide range of stakeholders, consumer advocates, and different interest groups and the utilities themselves to work with commissions to ensure that the right metrics are developed.
David Roberts
But it doesn’t presume at the outset to try to peg some correct level of utilization. It just says more. We’re back to the question of, is there any consensus on what the upper bound of a safe level of utilization is? Do we know?
Ian Magruder
This is one of the things that is exciting about this emerging field: we have yet to reach consensus on that question.
David Roberts
Historically, what’s the highest it’s ever been? Do you know, off the top of your head? I’m springing that question on you. But do you know how high it has gotten in the past?
Ian Magruder
The FRED has some good numbers on this that I can circulate. Maybe you can put in your show notes. It has fluctuated over time and the consensus is we have a lot of extra capacity to unlock here.
David Roberts
I think on the FRED graph you sent, it has gotten as high as 80%. I’m going from memory here, but —
Ian Magruder
Yeah, and it depends on how you measure.
David Roberts
Ballpark, you could at least get there.
Ian Magruder
The FRED measures it differently than, for instance, the Brattle Report does. The point here is we need to look into this and I don’t think it makes sense in the current moment, before we are even measuring these things in any state, to set a target. This is where we are at now and I think it is a really important, meaningful step to measure this and incentivize it at the state level.
David Roberts
Politically, you told a pretty happy story there, but I’m going to rewind and poke at it a little bit. The Virginia bill passed unanimously in the House, very bipartisan. Yay. Awesome. Then it passed on a party-line vote in the Senate, which, what happened? I want to poke a little more at the polarization or the lack of polarization. Some Republicans in the Virginia Senate were against this.
Ian Magruder
It was a priority bill for the new governor. I think they were probably reflecting that. Opposing anything that was —
David Roberts
There’s nothing more than just —
Ian Magruder
There wasn’t substantive debate on this. There weren’t long committee hearings with a wide range of interests discussing this at length. That didn’t happen. The bill thankfully sailed through pretty quickly.
David Roberts
It could get subsumed in polarization just because everything does. But the issue itself, as far as we can tell so far, has a lot of bipartisan potential.
Ian Magruder
We’ve had really good conversations on this topic with Republicans in various states. I’m cautiously optimistic. We’re early days, but I really do think this is an approach that can work in red, blue, and purple states.
David Roberts
That’s a question. Virginia is, as mentioned, absolutely the place you would start for this because they have millions of data centers coming. It’s a big political fight. It was the center of the gubernatorial race. The bills are going up in really dramatic fashion. The whole thing is as boiling there as it gets. That adds a lot of political pressure and impetus and tailwinds. You don’t necessarily have all of that in other states. You don’t necessarily have those tailwinds in other states. I’m curious, what other states are you targeting and why?
What are you looking for in a state? Are you going down the line, who’s the next state getting screwed by data centers, or how are you thinking about what states are ripe here?
Ian Magruder
We have created a spreadsheet which is pretty easy to replicate since you can find this data publicly. We’ve looked at where states where load growth is happening. Demand for electricity is going up and rates are increasing, the price of electricity is going up. Those are places where we think that makes sense and that is happening across a wide range. That’s a lot — red, blue and purple states. Those are some of the states that we will prioritize our thinking with this campaign.
This year, we’re focused on helping get grid utilization out there in the broader public consciousness. Raising it as a bigger topic — like we’re doing today — and getting people to think about it and understand it and see its significance, and then a broader legislative push next year in 2027. We’re early days, we’ll see, but I think there’s a wide range of states that will be interested in this and where there’s enough political will to do something new and different.
David Roberts
I want to believe. I know you don’t want to get ahead of yourself, but is there a red state where there are active discussions happening where we might see this break out soon? Something happen soon in a red state?
Ian Magruder
We haven’t decided all the states that we’ll be focused on. There are Republican leaders who are talking about this across the country, including the governor of Indiana, who has talked about the importance of bringing down utility bills, and the current DOE has been talking about this. Secretary Wright has even said, “We got to get more out of the grid.” We have Catherine Jereza, who oversees the Office of Electricity at DOE, talks about her stabilize, optimize, and grow agenda. That second bullet point, optimize, is really about what we’re talking about here.
David Roberts
It seems to serve everyone’s interests, but I just don’t trust anything these days. A lot of what I’m poking at and trying to get at is, is there — maybe it’s too early in all this to even know — but is there organized opposition to this? Is there a faction or a constituency that has some principled or empirical case to make against this? Is there anyone against it?
Ian Magruder
The biggest barrier to this is the status quo. It’s easy to just throw out there, but let’s break down why that’s the case. We have historically built our grid in America to peak and we’ve had to do it that way. Building our grid less towards peak and more towards system-wide utilization is a shift in how we think about how we build the grid in America. That’s a meaningful shift. Anytime you have a large complex system — like the American electricity grid — change by nature is slow.
Historically that has served us well. Move fast and break things might arguably have worked in Silicon Valley for certain companies at certain times, does not work well for the US grid. We’re trying to be very thoughtful and intentional about this. Anytime you propose a big new idea, it is going to take some time. The fantastic tailwind that we have is that people across the political spectrum want to act on affordability and are looking for new solutions. That opens up the door along with, as we discussed, the technology is changing and being ready for primetime.
We feel we have finally reached a moment in this country which we were not in five, ten years ago, where you have the political, economic and market forces all coming together in a moment where this could really happen.
David Roberts
Think about the coalitional politics. As we said before, this is a win — win — win — win — win — win — win — win — win situation. There are wins to hand out to almost any constituency you want to talk to. What just occurred to me is, I wonder if you’ve gotten green groups on board and I wonder specifically if you’ve gotten environmental justice groups on board because one of the side effects of greater utilization would be, I think, greater resilience. You briefly mentioned this before, but that strikes me as a very important thing in some communities.
Ian Magruder
Absolutely. There’s a wide range of constituents that we need to engage. We are in the early days, and we have certainly not spoken to everyone. We’re going to have to sit down with a lot of different groups. One of the things that will make this easier is that we’re not a trade association. I’m not out representing any of the companies I mentioned on a whole wide range of issues. We’re a campaign coming together to work on one thing — and one thing only. We’re willing to work with a wide range of stakeholders who may disagree vehemently on other things, but who can agree on this one thing.
David Roberts
Question about the state focus. Obviously makes sense to me to start with states here because states, utilities are regulated at the state level, most of the energy action is at the state level. But it seems like there are — I’ll just ask you, are there federal tools here? Is there something FERC, for instance, could do to enhance grid utilization?
Ian Magruder
Yes. We’re primarily a state-focused campaign, but FERC oversees transmission in America and that is a big part of this as well. Members of our coalition have sat down with FERC commissioners and begun discussing this. I think there is interest. There is an argument to be made that FERC theoretically could do this on their own without congressional direction.
David Roberts
Oh really? Do what specifically?
Ian Magruder
Prioritize grid utilization. In other words, require metrics and begin incentivizing an increase in utilization is an action that could be taken. We are going to continue having those conversations as well.
David Roberts
You and I, you come out of Rewiring America, the residential side, the DER side, the VPP side. This is of course my allegiance as well. I’m a fanboy of all that stuff. But it really does seem like the transmission side — there are just such easy solutions and they make such a big difference.
The study you sent about transmission utilization in the West is just wild. We have all these very expensive long-distance, high-voltage lines that are being utilized at, I forget what the exact number is, 18 to 30% on average or something in the West. You could double that pretty easily with existing grid-enhancing technologies, the line ratings, all the things you mentioned. You could double the throughput of the western grid with relatively easy interventions. The potential for this on the transmission side is huge.
Ian Magruder
Absolutely. I’m glad you raised that because the transmission side is equally as important as the distribution side and we have to be thinking about these things holistically. The Stanford study, my understanding, which folks can read, was dropped in December, right before the holidays. I think very few people read this really interesting study on exactly all the things we’re talking about: utilization of the transmission system in the West. I think they’re following up and doing another study in the East, is my understanding.
David Roberts
That’ll be interesting. I want to assume that it’s lower in the West than the East, but I don’t —
Ian Magruder
We’ll find out.
David Roberts
We often get counterintuitive results from grid studies.
Ian Magruder
You’re touching on something really important, which is more research needs to be done in this domain and we’re eager to work with a wide range of partners who continue this research. We think the Brattle study is a great foundational piece. We think that there is more research to be done across the board on grid utilization and how we can improve it.
David Roberts
In terms of what people can do, this seems pretty clear. As complicated as some of the nuts and bolts are of increasing utilization, the concept is pretty easy to grasp and the legislation is one page long. If you’re asking what people can do, just talk to your lawmakers about passing a similar one-page bill. Are there avenues for people to get engaged here?
Ian Magruder
That’s a great one. You have a wide range of listeners, David. Researchers can play a role in this. Policymakers can play a role for this. The technologies and companies that are already working on this can play a role and help us advocate for it. Any individual citizen can talk to their lawmakers and say, “Electricity prices are too high. I paid for a lot of this grid over many years and I want to make sure that we are getting the most out of it for myself and for our country.”
David Roberts
Again, you mentioned this earlier, but it’s worth underscoring. There are a lot of not great ideas about affordability floating around the political world right now. Everybody is getting involved, lots of people are getting involved with, shall we say, a loose grasp of the substance of electricity issues. It’s good, if nothing else, given that the affordability conversation is already underway, it’s happening, that ball is rolling downhill. It’s good to get a good affordability idea in the mix.
Ian Magruder
That’s right. We’re seeding the idea. We think that this is something that is not small ball, has impact at scale, and hopefully can enable a wide variety of solutions to come together all simultaneously.
David Roberts
This is laboratories of democracy. Here we go. This is how it’s supposed to work. It’d be great to see all the states or utilities and PUCs trying different things, getting a little more experimental, getting a little more, just do stuff.
Ian Magruder
Exactly. The path that Massachusetts could take to grid utilization may look different than the path that Utah or Nebraska would take. We think that’s okay. Each state should figure out the right path to increasing its own utilization.
David Roberts
How about a federal award, a grant to the state that hits the highest utilization, the highest grid utilization target, a national contest? Let’s really blow this thing out, Ian.
Ian Magruder
You can pitch that to the 2028 presidential candidates.
David Roberts
I want to finish on a point that I made in my solo pod last year that you have taken up and that is part of all of this — the no regrets aspect of all this. If listeners missed that pod, they should go back and listen to it.
We’re in a situation now where it seems we need a bunch more electricity grid. Got long queues, millions of data centers, whatever. But the fact is, as we’ve said many times, no one really knows how much demand there is for that. No one really knows. The amount of uncertainty about the actual level of demand growth in coming decades is wildly huge. It’s a crazy situation. An entire UK’s worth of demand just beneath the top projection and the lowest projection.
All of which is to say there is a danger here of us seeing this large but uncertain demand coming down the pike, of us freaking out, building, building, building, and then the demand not — the bubble popping, demand not showing up. We have been through this in this country before. With that, I will hand the point to you to make the point.
Ian Magruder
It’s one of the big things that, coming back to these utility commissions and the Supreme Court of Energy, so to speak. If you walk around the halls of NARUC, the National Association of Regulatory Utility Commissioners, where the regulators and the utilities and various interest groups come together, there are a lot of people talking about this and thinking about it. How much of this is real, how fast do we have to move on these things?
There are big questions. We’re going to need more power, we know that. But how much, how fast, etc. These are big questions. You’ve said it really well, which is we see utilization as the no regrets approach — regardless of whether or not you see some sort of bubble or cyclical changes in demand here, getting more out of the grid we have will serve us well for the long term, regardless.
David Roberts
Yes, it would be beneficial in any scenario. That is the definition of a no regrets policy. No matter what happens, it will be better for us if we are utilizing the grid at a higher rate.
Ian Magruder
Exactly.
David Roberts
Also, groping around grid analogies. This is what grid people spend half their lives doing, groping for good analogies. I think about this as the analogy I try to use with people is the DERs and the VPPs are filling in gaps at the distribution level. I think of it as caulk, sealing up the cracks, making the joints firmer, building just a firmer foundation upon which we will go on to build a lot more — more transmission lines, more power plants, etc. No matter what you want, you want that foundation to be as strong as possible, and that higher utilization is a proxy for the strength of the distribution grid.
Ian Magruder
Exactly. If it turns out, five, ten, however many years from now, the breakneck speed at which we are adding new load shifts in this country, and we accidentally just put a bunch of batteries in the grid and made everything work more efficiently, I do not think we are going to regret that outcome.
David Roberts
No one regrets a battery. I like T-shirts. No one ever regrets a battery. All right, Ian, this is delightful. I love this effort. I love that you’re highlighting this. I feel this is long overdue. This is another politically bright spot where everybody wants this, everybody needs this, everybody will benefit from this. Surely we can do this.
Ian Magruder
Thanks, David. We’re excited. It was a great conversation, and we’ll see where things go.
David Roberts
How can people get in touch and follow you?
Ian Magruder
We’ve got a website, utilizecoalition.org. Feel free to join our email list there. Follow us on LinkedIn or other platforms, and we’d love to be in touch. We’re going to need a lot of different folks working on this together.
David Roberts
Thank you for listening to Volts. It takes a village to make this podcast work. Shout out especially to my super producer, producer Kyle MacDonald, who makes me and my guests sound smart every week. It is all supported entirely by listeners like you. If you value conversations like this, please consider joining our community of paid subscribers at volts.wtf, leaving a nice review, telling a friend about Volts, or all three. Thanks so much, and I’ll see you next time.
