I want to thank the Region 18 Education Service Center (esc18.net) and the American Energy Institute for the opportunity to speak at the Annual Energy Day STEM Institute in Midland, TX, a premier three-day professional learning experience designed for 20 elite elementary and secondary educators from across Texas. I shared my thoughts about the global nature of competition for the Permian Basin, future workforce requirements, and the importance of electricity. In turn they shared their thoughts about teaching and improving our public schools. I may have gotten more value from the conversation than they did.

“In most states, companies can only purchase power directly from the grid or provide their own power. In order to create an off-grid utility, the would-be utility needs to be approved by the state public utility commission. This requirement effectively prohibits the creation of new, off-grid utilities that can provide power to multiple industrial customers with the prices negotiated directly between the utility and their customers. Travis Fisher and Glen Lyons call this innovative arrangement Consumer Regulated Electricity (CRE). With CRE, new data centers and manufacturing could more readily be built off-grid, addressing concerns that industrial demand will generate costs that will be socialized and passed on to ratepayers. This would help to resolve issues under certain market structures, like in the PJM Interconnection, where the capacity market does socialize costs that should be borne directly by large industrial loads.18 In January 2026, Senator Tom Cotton (R., Ark.) introduced the Decentralized Access to Technology Alternatives Act (DATA Act) to help make CRE a viable option. The DATA Act would exempt islanded off-grid utilities serving new customers from federal utility regulation that will otherwise inhibit states’ ability to experiment with CRE.” freopp.org/oppblog/a-grid-bu…

Consider the following as it relates to reliability in many RTOs: “Markets work best when decision-makers bear the consequences of their choices. “Internalizing externalities” — say, making companies that discharge pollutants into a river pay to maintain it — is cited as a just cause for taxes, subsidies, and regulation. Most economists continue to teach, write, speak, and podcast as if this textbook prescription for government intervention is a reliable-enough description of reality. But real-world government intervention routinely does the opposite. It takes costs and benefits that individuals would otherwise experience as consequences of their own choices and shifts them onto other people. In other words, the government regularly “externalizes internalities,” for which we pay the price.” thedailyeconomy.org/article/…

“…states should authorize consumer-regulated electricity (CRE), an approach laid out by Travis Fisher and Glen Lyons in a 2026 Cato Institute paper. Under their approach, private companies could build and operate their own power systems to serve new industrial customers, including data centers, through voluntary contracts. Because such a utility serves only new load, on an islanded system and at contract prices, inaccurate forecasts would not expose existing utility ratepayers to the costs of unnecessary infrastructure investments. Several states, including New Hampshire, Utah, and Ohio, have taken steps toward enabling CRE, while Arkansas Senator Tom Cotton has introduced federal legislation to facilitate it.” c3journal.com/the-data-cente…

“The part that I really hate about the public grid, the incentives are all wrong. In this sort of cost plus, you're going to recover all your costs and then get a rate of return on top of it. That gives the regulated utilities every incentive to inflate costs. They get away with whatever they can. They put as much cost in there as humanly possible. And if the state board approves it, game on. They made some money. That's been the wrong incentive for such a long time, especially on the on the wires part. Like we've gotten more efficient on the generation side because in part because of the restructuring, we have better incentives. We have actually unregulated generation assets, which is amazing. But you don't have unregulated networks. You don't have unregulated wires, distribution, all the things that you can optimize. We don't know what that looks like yet. So what I'm dying to know is if you give a new network every incentive to be as cheap and efficient as possible, Without any element of it that's cost plus that's in this rate regulated environment, all of it is just drive it to the bone, drive the efficiency, drive the economics, drive the engineering to the bone. That's sort of the SpaceX model. It's like if you don't need it, cut it. If it's not working, figure it out. That approach to a grid, I am dying to know what that grid looks like. Because we, for a hundred years, we've just gone with this model of, well, you know, wires are natural monopoly. What are you going to do? We have to do, you know, cost plus on all this stuff. We've got this, like the grid to me, the public grid to me looks like walking into the DMV. Everybody sucks. Everybody's like, I don't mean to talk about the individual linemen. I'm talking about the decisions at sort of the corporate level. Everybody's just happy to be mediocre and make, you know, A sleepy return and not rock the boat too much. That moment, we're in a very different moment now. Maybe that was fine for a few decades. I think we've come to terms with the fact that the grid is not meeting the moment and it's the rate limiter on economic growth. And there are a lot of us, myself included, for sure, there are a lot of us that are pissed off about that. We need to change that. And if there's any hope of getting a glimpse into what sort of a SpaceX version of a power grid might be, Man, I am dying to see it.” nuclearbarbarians.com/p/the-…

Thank you to the American Energy Institute, Texans for Reasonable Solutions, and their contributors for yesterday's opportunity to speak about Bring Your Own Power. Texas needs a privately funded parallel path to ERCOT to absorb some of the demand growth pressure. BYOP is that path.

Critics have long accused regulated electric utilities of gold plating their investments—buying Rolls-Royces when Fords would do. But what if the problem is more perverse than that? What if utilities are buying Fords that cost as much to manufacture as Rolls-Royces? Manufacturers respond to the demands of their customers. In competitive markets, buyers continually pressure manufacturers to standardize products, simplify designs, improve productivity, and lower costs. But regulated utilities don't face the same competitive discipline. When they insist on specialized equipment or fail to reward cost-reducing innovation, their suppliers adapt accordingly. The consequences could extend well beyond inflated utility capital spending. A century of distorted buying incentives might have shaped the entire equipment manufacturing industry, discouraging the standardization and production innovations that have transformed so many other sectors. Perhaps the problem isn't simply that electric utilities spend too much. Perhaps the way they are regulated has made the entire electricity supply chain more expensive than it needs to be. CRE could provide a practical opportunity to test this hypothesis. Under CRE, independent providers serving voluntary customers on electrically separate systems would have stronger incentives to minimize their total cost of supplying electricity, including equipment costs, reliability, maintenance, and replacement. That could influence manufacturing in several ways: (1) Standardization. A CRE provider building a portfolio of similar facilities could choose a limited set of equipment designs rather than maintaining utility-specific product requirements. (2) Manufacturing partnerships. A CRE provider could work directly with manufacturers to develop repeatable equipment packages, with costs and performance optimized together. (3) Innovation. CRE providers could experiment with modular equipment, different architectures, or shorter replacement cycles when those alternatives offer better lifecycle economics. (4) Competitive benchmarking. If CRE providers consistently obtain equivalent performance at lower lifecycle equipment costs, their results could provide useful benchmarks for regulated utility procurement. A CRE provider facing the financial consequences of its decisions has stronger incentives to discover what equipment and manufacturing arrangements are actually worth their cost. Regulated utilities have lesser incentives. And they’ve had lesser incentives for a century. It’s hard to imagine that hasn’t undermined the cost and reliability of our nation’s grids. Contact us to learn more.

⚛️⚔️NUCLEAR BARBARIANS⚔️⚛️ @ts_fisher joined me on the pod to talk about Consumer Regulated Electricity and how to power data centers and industry faster. Anyone with a need for speed must listen: nuclearbarbarians.com/p/the-…

“As Travis Fisher, director of Energy and Environmental Policy Studies at the Cato Institute, tells Reason, "If a tech company buys electricity from the owner of a power plant, in most states the power plant owner then becomes a public utility (even if the transaction occurs off-grid), which brings heavy scrutiny in the form of economic regulation." To ease these regulatory barriers, Fisher and other experts have advocated for a Consumer Regulated Electricity model that allows large-load customers to connect directly to unregulated power producers off the grid.” reason.com/2026/10/23/trump-…

Amazing to see @AmericanFreedom embrace a high-energy future that includes more freedom in the electricity sector Kudos to @kdd0211 on a great paper

A common argument against CRE/BYOP private grids is that they will compete with the public grids for the limited supply of parts. That’s a valid concern in a zero sum world, but we don’t live in a zero sum world. Economic growth and expansion happen everyday when demand increases. - If the consumers using the private grids were on the public grid, much of the same equipment would be needed to provide them power. - CRE/BYOP will increase the demand for supply.  When the demand increases, the supply will follow.  That’s Econ 101. - Traditional equipment suppliers are accustomed to long delays (e.g., look at the stop/start nature of ERCOT’s 765KV lines) so they don't expand supply as quickly as one might expect.  Since CRE/BYOP developers wont have the stop/start nature to their projects, traditional equipment suppliers will be more aggressive with expansion plans. - CRE/BYOP developers will expand the number of suppliers.  They wont be tied to the traditional suppliers.  We're seeing this play out in real time as projects have been announced using Caterpillar engines and fuel cells among other options.  These types of suppliers werent being considered by anyone just a year or two ago. Moreover, we’re seeing new gas turbine manufacturers enter the picture. - A recent SemiAnalysis substack post spoke to this issue more boldy: "Another core issue is power, and again we think the issue is largely solved. We’ve been the first to talk about all issues on power, since March 2024 and subsequently given the grid headroom dips negative at the end of 2027. This ended up driving AI Labs and hyperscalers to build their own power plants, better known as Behind-the-meter generation, bypassing 5-10 year grid interconnection timelines. And while turbine incumbents like GEV quickly faced production bottlenecks, the industry quickly reacted and we’ve since seen a surge in new OEMs and new solutions supplying the market. From fuel cells to truck engines to refurbished turbines, the power generation problem has broadly been solved." - Regulated utilities have some artificial incentives that cause them to suboptimize which CRE/BYOP developers wont share.  For example, a regulated utility is happy to have equipment custom built because (a) they dont face competition so theres no pressure to do otherwise and (b) they actually make more money if the equipment is more expensive.  That's a weird incentive for a business, right?  A CRE/BYOP developer will ruthlessly cut costs and standardize equipment.  That means they wont directly compete with the utilities for equipment. - CRE/BYOP developers will show us how a 21st century grid should work and legislators can ultimately take those lessons and incorporate them into their public grids. - This is a globally competitive business. If the U.S. isn’t the first to make it easier to build 21st century grids, someone else will. Contact us to learn more about CRE and BYOP.

Hyperscalers can afford almost anything they want and don’t need to share off-grid systems with others. But the rest of the “180 AI models that are now better than GPT-4 was at its release, many of which are open weights models, which anyone is free to use or modify” cannot. CRE can help them succeed. oneusefulthing.org/i/2212046…

Accelerate all the watts, especially the firm ones! @energybants if the incumbent utility or PJM give you any trouble, keep in mind you can operate an islanded campus after just a minor tweak to state law alec.org/model-policy/act-to… Ohio already did it. Kentucky should follow

“Private electricity networks can help electricity-intensive facilities like data centers get the electricity they need quickly without shifting costs to existing customers.” Creating a new archipelago of “islanded” facilities certainly has its critics, but no strategy is going to address every imaginable concern. With spiking demand and widespread worries about affordability creating political pushback on new facilities, giving the green light to privately funded on-site generation is an obviously good idea.” greatcapitalism.substack.com…

“Consumer Regulated Electricity (CRE) allows someone to build an entirely new electric service outside the regulated system under certain conditions. These conditions include things like staying physically islanded or separated from the existing grid, serving only new non-residential load that no utility was serving before, and abiding by existing environmental laws. Because CRE generation is not connected to the grid, and the customers are buyers negotiating their own terms, it would not need commission rate regulation. If this CRE generation ever plugs into the regulated grid, it loses the exemption and comes under normal oversight. When a large, new load can bring its own supply, it is not asking existing ratepayers to finance a new power plant on its behalf, and it is not waiting years in an interconnection queue to get built. CRE can be a win for both businesses and ratepayers. For businesses, CRE brings speed and certainty to a long, drawn-out process. For ratepayers, CRE removes the cost of large projects from the rate base including the need for large transmission lines to cut across the state. A data center, or an industrial park built around its own microgrid, can get power built on its own timeline and its own dime. Whether that microgrid runs on natural gas today or a small modular reactor down the road, guaranteed power on day one is a powerful draw for new businesses, and existing ratepayers are not exposed to the risk.” americansforprosperity.org/w…

“Consumer-regulated electricity (CRE) is a system where large energy users, such as data centers, operate their own private electricity networks or source power independently, rather than relying solely on traditional public utilities. This model allows for greater flexibility and can help large users avoid regulatory and cost structures imposed on standard utility customers.” multistate.us/insider/2026/1…

“In addition to expanding energy supply, states should also authorize CRE, in the context of the broader eligibility framework discussed in the preceding section. Consumer-regulated electricity goes further by removing the cost-shift risk altogether; at the federal level, Congress should pair any cost-allocation standard with a path for it, such as the one proposed in the Decentralized Access to Technology Alternatives Act, introduced in the Senate in January 2026.” advancingamericanfreedom.com…

“Core message: Let new large loads bring their own power. Let private capital carry the risk. Protect ratepayers. Keep growth on the table. Please share this update with potential supporters and introduce us to useful contacts. CRE and BYOP are nonpartisan policy ideas: let large new loads bring their own power, protect existing ratepayers, and give states a faster path to economic growth.” masterresource.org/fisher-tr…

…Consumer-Regulated Electricity (CRE)—removes the forecasting problem rather than managing or allocating its cost. A “build-your-own-power” approach, CRE would permit a privately financed electric utility, physically islanded from the regulated grid, to serve new nonresidential load under voluntary contract without state economic regulation of its rates, while remaining fully subject to environmental, siting, and safety law. The American Legislative Exchange Council has adopted a model act on this design, a federal companion, the Decentralized Access to Technology Alternatives Act of 2026 (S. 3585), was introduced by Senator Tom Cotton in January 2026, and Louisiana has both considered enabling legislation and opened a commission docket on private-use networks. Because CRE serves only new load, on an islanded system and at contract prices, a forecast that is incorrect in either direction would have zero impact on ratepayers. Several states have made significant strides in pursuing CRE, including New Hampshire, Utah, and Ohio. CRE eligibility has thus far been aimed mainly at new load; Utah’s law, for example, reaches new or added load of 100 megawatts or more but not a customer’s existing load. Although this restriction prevents users from leaving the grid and unloading fixed costs from existing assets onto ratepayers, such a blanket limit may be overly onerous. A better question is not whether a customer’s load is new, but rather whether its departure from the grid would impose meaningful costs on existing ratepayers. That concern is largely irrelevant for firms having long-abandoned grid connections, facilities whose customer-specific infrastructure has already been fully depreciated, or existing customers seeking to supply a substantial amount of new load in an alternative capacity. The restriction also shields incumbent utilities from competition for their existing large customers, weakening the pressure to keep large-load tariffs competitive. …forecasts of data center electricity demand carry significant uncertainty and, as a result, price risk. CRE addresses that risk by creating islanded grids; large-load tariffs transfer this price risk through contracts. The ideas suggested in this section can give lawmakers, utilities, and grid operators a variety of options to manage these risks. advancingamericanfreedom.com…

I find this paper insightful right up until the end: “Energy planners have long assumed that electricity demand will grow more price-responsive…. …responsiveness shows no upward trend across nine decades of data; if anything, the most technology-rich settings, including time-of-use pricing, are the least price-responsive in total consumption.” To me this says that due to a century without real competition and associated market discovery we don’t understand the power market nor how to price it. At the end of the paper is when the authors lose me by invoking the same old central planner thinking: “…broader demand flexibility will have to be engineered and paid for, through enabling technology, contracts, and program design.” Here’s a different idea. Let’s allow real competition and the associated market discovery so we can find out how the power market works and how to price it. That’s what CRE would enable. Contact us to learn more. arxiv.org/abs/2607.21285