Pondering Energy Policy Consequence Issues
- SWS
- Sep 16
- 4 min read
Energy Policy Perspectives Vol. 10 - September 16, 2025
Since the August 22 Bureau of Ocean Energy Management (BOEM) stop-work order on the Revolution Wind offshore wind project, we have not seen new policy actions or executive orders on the national level, giving us time to assess where we are and where we are headed.
1) solar is expected to be the largest source of new U.S. generation capacity in 2025,
2) the administration’s energy policies favor more U.S. natural gas electric generation,
3) the administration is encouraging exports of LNG,
4) the administration is supportive of new nuclear generation technology development, and
5) electricity demand is soaring.
Yet several things remain unclear to us:
1) What is the medium-term direction of U.S. energy price volatility? With soaring demand and rising LNG exports, the reliance on natural gas would presumably increase and along with tighter U.S. electricity markets could this drive up energy price volatility for U.S. consumers?
2) Can the impact of price volatility be fairly allocated between large commercial customers and residential customers? While electricity tariffs may be designed for large new load customers to pay higher direct costs, indirect higher commodity prices and volatility could be difficult to attribute to the new large customers. The effects on electricity customers will also be felt by natural gas customers and other non-utility natural gas consumers.
3) Could an emphasis on natural gas generation have the unintended consequence of delayed new service? Electric utilities are reporting ballooning queues of interested large customer loads for potential new service. The aggregate new potential loads are often 2x-4x existing utility peak loads. Could any limitations on the potential sources of new generation resources restrict the options available to utilities and unexpectedly delay new service to customers?
4) What happens if AI should ever stall? Could the construction of significant new U.S. electricity infrastructure, with long lead times, potentially overshoot, even just for a short period of time, the actual digital electricity load demand of the future? While a future AI development plateau might be short lived and the infrastructure ultimately be required, the short-term implications for U.S. utilities could be significant. Even short/intermediate-term stranded assets or underutilized assets could have significant financial and political implications for numerous utilities and states.
5) Can the U.S. settle on a permanent nuclear waste repository? Nuclear is a key solution to our longer-term national electricity requirements and AI development goals. New nuclear technologies have notoriously been slower and more expensive than originally expected and many commercialization timelines being discussed appear quite optimistic. Notwithstanding all that, for this to be successful, will it not require substantial additional policy incentives and expedited siting/regulatory treatments for everything from new generation technologies to the full nuclear fuel cycle supply chain?
Time will tell, but more policy considerations are needed across the board.
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