About this episode
The episode discusses how data centers can better manage power costs and grid access through structured bidding processes.
Right now, connecting a data center to the grid works like Texas hog season: no defined season, no bag limits, first-come-first-served, file as many interconnection requests as you want. Travis Kavulla’s recent essay in American Affairs argues the power industry needs something closer to deer season, with defined rounds, allocation rules, and prices that reflect what grid access actually costs. The mechanism he favors is an open season, borrowed from interstate gas pipeline regulation. Rather than processing interconnection requests on a rolling basis, a grid operator would design an engineering plan reflecting realistic demand and tender it to the market in a structured bidding process. Winning bidders receive transferable property rights to grid access, comparable to water rights or spectrum licenses, rather than vague regulatory permission that reverts to the grid operator if a project fails. That difference matters for financing: a transferable property right holds residual value even if a data center company does not survive the artificial intelligence boom. Kavulla has worked as a utility regulator at the Montana Public Service Commission, on market design at California…
People in this episode
Host: Doug Lewin
Guest: Travis Kavulla
Topics covered
- data centers
- power industry
- grid access
- interconnection requests
- market design
- regulatory affairs
Keywords
- data centers
- grid access
- interconnection
- bidding process
- power industry
- regulatory framework
- market design
Mentioned in this episode
Organizations: American Affairs, Montana Public Service Commission, California ISO, R Street, NRG, Base Power, University of Chicago
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