ICYMI: Ranking Member Heinrich and Energy Secretary Granholm Interview with Heatmap News on Energy Costs, Permitting Reform, and AI Data Centers

On President Trump’s War with Iran and High Gas Prices 

Meyer asked, “Yesterday, Defense Secretary, as it were, announced that the cost of Iran was $37 billion, and we've already seen fuel prices go up. I know you wanted to start the conversation by talking about the huge spikes in energy costs that your constituents have seen, and I just wanted to ask at the beginning, you know, what are you hearing here? Because it does seem to me that at this point, there was an initial spike after the war, went back down, and now they're steadily climbing up again, and so you know, obviously New Mexico is also a producing state. But what are you hearing?” 

Heinrich answered, “Just that people are feeling the pinch on energy prices everywhere, and it's across all forms of energy. This is an administration that has chosen to take actions that have negatively impacted prices in so many different sectors. So, you know what they're doing in the electricity sector by not permitting all this new generation that is just waiting to be connected to the grid – that's raising electricity prices. You have the war in Iran, which has constrained international oil and gas supplies, and that is raising both natural gas, gasoline, and also diesel costs. And that diesel cost is really important because the reality is, once you run up the cost of diesel, then you see that every place that things move, you see it immediately in the grocery store because it costs more to move food from one part of the country to the other. You see it in building supply prices. What they're doing, making old coal plants that are ready to shut down stay on the grid, that actually costs money, and those costs are being passed on to consumers in those places. No matter where you look in the energy map, what they're doing is increasing costs. And I hear about that at the grocery store, at the gas station, wherever I go. Really, it's like energy prices are going up across the board.” 

Meyer turned to Granholm, “Secretary Granholm, I'm curious. You know, at this point, we've had about a year and a half of watching the new Department of Energy in action... but I want to start by asking what has stood out to you about how it's operating, what you don't like, and maybe one thing you like, if there's anything.”  

Granholm answered, “I will say, you know, there was a big diaspora of the team, an incredibly smart team that had to leave, or that chose to leave because of some of the things they're describing. I will say I'm going to give you a silver lining on some of this because I really do think that the actions of this administration unintentionally caused a rush to clean energy and other solutions. So the old triple B, the One Big Beautiful Bill, didn't take away the tax credits. It used to be solar plus storage. Solar plus storage. Now it's solar plus storage, and you know it's great that those tax credits still exist, and you're seeing developers really take advantage of it. Putting a cliff on when those tax credits, when the solar tax credits and land tax credits expired, obviously caused a rush for developers to build up, so the amount of gigawatts that are being added to the grid, I mean, it’s so ironic. At the end of 2024, when we added almost 60 gigawatts of clean power to the grid and batteries, we thought that was going to be the top because of what the administration knew. But the unintended consequences of this action is that this huge rate of gigawatts, added to the grid of clean power and batteries. Amazing, amazing. So I'm glad that some of that foundation is still existing. The private sector even understands the importance of this move, and I will say because of the war, you know, it only accelerates the move toward non-fossil fuel, people with local powers, energy sovereignty, and that means clean power.” 

Heinrich followed, “And we've seen other economies accelerate those shifts, seeing what's going on in the Strait of Hormuz, and in some cases, in China's case, really anticipating it, moving large portions of their economy from molecules to electricity.” 

Meyer asked, “Do you have any theories? I'm injecting this, but do you have any theories for why? I feel like after the Strait of Hormuz closed, there were doomsday predictions about where oil would go, and obviously oil prices increased significantly, but they didn't hit $150 or $22 a barrel. Do you have any theories about why that is?”  

Heinrich answered, “It's a couple of things. There's more buffer in the system than we used to have. China built up big reserves ahead of time. There are the commercial reserves. There's the strategic petroleum reserve. We haven't exhausted those buffers, so that really has worked to mitigate. You know, prices are bad. It's just not as bad as some of the predictions are. We're not at the bottom now because the Strait’s closed again, and those commercial reserves are now, after a little bump when the MOU happened and was announced, they're ticking back down, and there is a point at which the system stops working like it's designed to work. You need a certain amount of oil in the system, and we're getting closer to that than I think any of us. And then you're one hurricane away from really bad prices.”  

On Permitting Reform and the Grid Connection and Congestion Management Act 

Meyer asked, “So obviously, one way to lower prices, or one potential way to lower prices over the long term, is permitting reform. I know you're in negotiations right now about a deal here. So can you give us an update on where that stands?”  

Heinrich answered, “I don't want to get in the weeds on it because the negotiations are actually very active right now, but I do think there's a path there, and I think both Republican and Democratic leaders in the relevant committees want to get to yes on permitting. I think the biggest wild card is actually the White House because the White House continues to do things that sort of poison the well. They did that with the Historic Preservation Act new regulations this week. They've done that with stop-work orders on offshore wind, with the Department of Defense stopping the process of processing very straightforward onshore wind permitting projects on public lands. Time and time again, they have entered this debate in ways that have not been healthy, that haven't been helpful for getting a product across the line. We're working hard. We're trying to negotiate, you know, a middle ground, but I worry about the impact of the White House.”  

Granholm followed, “The utter frustration about waiting for Congress, you know, present company exempted, to get permitting reform done suggests that there may be another path, and you know I know that there is an effort on the part of hyperscalers or AI companies to look at how can AI do this instead of waiting for Congress. So, for example, I think you probably covered this: the effort that Google has, through tapestry at PJM, the notion that you should be able to take the interconnection queue and move it more quickly because you can do concurrent studies, et cetera, rather than all these consecutive wait in line blah blah blah, and if you can do that there, or if you can do it with permitting and respect the intent of NEPA or the National Historic Preservation Act, and use AI to get some of this done and accelerate, then you might end up leapfrogging over Congress, which doesn't mean that you shouldn't be doing it. But I just worry that...” 

Heinrich interjected, “I do think that the interconnection queues are a perfect place to apply machine learning, AI, advanced modeling, and we had all five FERC commissioners in front of us today on the Energy Natural Resources Committee. And one of the commissioners walked through an example where they were able to do,  historically, what had been an over 600-day analysis of adding this generation to the grid became a 10-day process, and so we should absolutely do all that. I still think we're going to need to reform permitting and be able to get to yes or no faster and make sure that those permits flow.” 

Granholm followed, “Your mouth to God's ears.”  

Meyer stated, “I do wonder, with the AI acceleration of permitting, it seems like there are a lot of places to speed things up. It also seems like it's only so long until we are already used to these massive dockets and huge studies for a lot of energy projects or infrastructure projects. It does seem like AI only increases the ability to expand those dockets and make every study bigger and allow more people to file more documents that then have to be reviewed. It just seems like a both ways thing, but maybe...”  

Granholm followed, “But hopefully, at least you can truncate the amount of time that is. It should not take 10 years for a transmission, or 17 in your case, it's insane.” 

Heinrich followed, “There's only so much capital in that world, and so many competent developers I think it will generate additional demand, but the advantage of being able to do modeling quickly is really, it seems like, a very unlinear advantage. I think we're going to see a lot of, of juice for the squeeze from that.” 

Granholm followed, “I love what you have introduced, though, the [Grid] Connect[ion] and [Congestion] Manage[ment] Act. Can I ask him this question? You probably have that on your list, but I mean, describe what that is because it's so smart to be able to jump the queue essentially if you agree to certain conditions.” 

Heinrich answered, “I mean, we've always been modeling based on what's the worst-case scenario, what's the worst hour of the worst month when in the middle of July everybody's coming home and turning on their air conditioning at the same time. There are vast stretches of time when the grid just has a lot more capacity, and so what our bill says is, if you will commit to curtail power when the grid is full, you can just plug into the grid, and we'll let you sell power whenever the grid still has excess capacity, but you're going to have to dial it down when it doesn't have that capacity, and so that's something that we've seen work in ERCOT, and I think has huge potential for getting a lot more generation on the grid quickly if we apply that nationally.”  

Meyer asked, “Do you anticipate a law like that or some kind of policy like that being in the permitting reform field this year, or is that a future policy you'd like to see?”  

Heinrich answered, “We’ll have the conversation. We're rolling this out obviously late in the game, and I'm a big believer in get what you can done in any given Congress. Don't wait for the next Congress and think it's all going to be perfect. It never is around here, so we'll get everything we can done in this Congress. That's my position, and if that's not part of the mix, then of course we're going... permitting reform is not going to go away.”  

Meyer pressed, “And then one more on this, just because I have a news responsibility, which is, where do we like? What would a timeline look like? I once heard the timeline was, you'd want to see text by August recess, but that's pretty soon.” 

Heinrich answered, “We're very thick in the negotiations right now, and whether or not we could land something before August, I'm not going to speculate. But my goal has always been just to get something out of this Congress. I don't care when that happens, but I'd like to get a product out of this Congress.”  

On the Implementation of the Inflation Reduction Act and Energy Costs 

Meyer asked, “Secretary Granholm, I wonder what, watching now 18 months of the Trump administration, you think, you know ‘we should have done this differently when during the Biden administration,’ or ‘there's an issue here that I would have handled differently,’ or now that I see what's happened and how they've approached governing.” 

Granholm answered, “Yeah, it's such a, it's a great question because I think every one of the cabinet officials looks at what has happened in the Trump administration and says, ‘Man, I should have broken more eggs, not more laws, but I should have like really insisted on much more quicker,’ you know, all the negotiations that took forever on, you know, getting the Treasury guidelines and all of that. It was like a cannonball should have dropped through, and I think that's a good lesson that will be taken away for the next administration.”  

Meyer pressed, “And why didn't it happen?”  

Granholm answered, “Because there's process, because there's lawyers. I mean, there was a sense that this is the way you do things, et cetera.”  

Heinrich interjected, “And we accepted that status quo.”  

Granholm continued, “Yeah, we all accepted it.”  

Heinrich interjected, “And we shouldn’t have. We should have built programs that don't take two years of analysis, and that is definitely the lesson that I took from the rapid... the things that were fairly straightforward, like the tax credits, were able to move quickly. But there were whole programs like the green bank that got stood up just in time to be turned off.” 

Meyer asked, “Is that a drafting failure or an implementation failure?” 

Granholm answered, “I mean, to be fair, there was a lot in implementation, but there are a lot of rules around all of this that have certain timelines, et cetera. So I think taking a look at all of that. I mean, Democrats have been very-we're going to follow the rules, and we're not going to bust. You know, we're not going to break norms. And I think this administration has broken a lot of norms and shown that you can get stuff done more quickly. Not likely they've been done quickly, but nonetheless, I think it's a lesson for us about challenging the status quo.”  

Meyer asked, “On energy costs. I want to just observe a kind of interesting dynamic here, which is that I think as Trump has taken steps that have driven up energy costs, I think we all agree it's making costs higher than they would be otherwise. Certainly, the Iran War, likely the permitting obstacles that they put up to wind and solar, tariffs. He has driven up. I think his administration has driven up energy costs, and we hear a lot from Democrats about how that's bad. It does seem a little bit to me like there's a bit of an effort to play both sides because I think when right now Trump is doing things that are driving up costs and costs are going up and everyone agrees that's bad. Democrats get in office and they have a lot of different goals for the energy system. Some are procedural and some are about environmental goals, and that tends to slow things down. People take a long time to approve, say, oil and gas permits. And so, do you think that watching this experience, you know, watching the Trump administration, the Democrats are now ready to embrace or looking at, let's say, an affordability-first or affordability-only agenda, where it's like we'll take clean, we'll take fossil, we'll take whatever, as long as costs are low.” 

Heinrich answered, “I think what Democrats should always keep in their minds is that you cannot create and manage the energy transition on the backs of consumers. They already have their plates full. They're doing everything they can to make our economy work. We can't ask them to do more, especially in this environment. That doesn't mean we quit managing that transition; it just means we can't ask consumers to pay for it.”  

Granholm answered, “But if we're to be honest, the cheapest energy is clean energy, and so if you want to go cheap, then let abundant clean energy be prolific and deployed throughout the land, and it will bring the rates down.”  

Meyer pressed, “Let me just push back a little and say I think watching, let's say, the Trump administration revoke permits and block permits and block construction for wind and solar, it does put you in mind of the Keystone XL pipeline, which was not necessarily an affordability project, but which Democrats did block. Now, it was, there were good climate reasons to block it…” 

Heinrich interjected, “But it was also an export project, and the reality is exports raise costs. They just do. You can export a certain amount of natural gas, and that can be okay, but when you hit a certain threshold, you're going to start to see natural gas prices increase, and that's why we built into those exports the fact that the Secretary of Energy is supposed to sign off on a project by project basis. It wasn't meant to be infinite, because if you do make it infinite, eventually exports, by virtue of those exports, you're actually going to raise domestic prices for both consumers and for manufacturers, and they've taken the opposite approach, which is let's export as much as we can. At a certain point, you see that have an impact on the costs and on the jobs that those manufacturers create, right?” 

Granholm followed, “Right. The studies that have been shown, I mean, it's the question of supply and demand, right? If, in fact, the capacity fills everything that's been authorized, you will have double the amount of exports of natural gas. Even though we have such an abundant supply of natural gas in this country, that is going to put upward pressure on prices.”  

Heinrich interjected, “It connects us to the international price market, and we've seen this this before in places like Australia. We don't want to be connected to that because those prices are much higher. There's more advantage in having moderate prices here that can that can really incentivize good jobs in things like manufacturing.”  

Meyer asked, “Secretary Granholm, I wonder, we've seen this explosion — I feel like, just dated almost to when the Biden-Trump transition happened in AI data centers and in electricity demand — I know you're working, you're thinking about these issues right now. So, I guess take us to the end of your time in government versus what's happened since then. And was this scale of demand forecasted?”  

Granholm answered, “No, no. I mean, even, I mean, you guys noticed, noted that Bloomberg New Energy Finance increased their projection, their forecast, for how many gigawatts are going to be necessary to feed the beast by 2035, and just from December of last year, of you know 2025 to now, it has increased by 80 percent. I mean, it's just, it's voracious the appetite for power. So it is really quite astonishing. Now, will all of that come to fruition? Will the chips be more efficient? Are these going to be sited because of the NIMBY issues? All of those are legitimate questions. But if the demand projections are accurate, it is going to require a massive amount of buildout of power.” 

Meyer asked, “What's the right way to make sure as much of that power is as green as possible? Because I think right now it's going to be met by gas. Now maybe that's...”  

Granholm answered, “Maybe, or maybe not. I mean, is that the smart way to go? When I mean, you know, it's mind-blowing to me a little bit that there's all this assumption that it's all going to be natural gas, when first of all you have to have the infrastructure for natural gas, or you have to build it out. It takes a lot of time to build out that infrastructure. Secondly, the wait for natural gas turbines, as everybody knows, is years. So the time frame of getting natural gas turbines and a natural gas plant is long, whereas the time frame for getting solar and batteries you can get within months, say, rather than years, so I don't necessarily buy the fact. Maybe natural gas ends up being a backup power. Maybe the, you know, bloom energy, et cetera, ends up being your backup source. But even that, when you look at the technology associated with long duration energy storage and how that is really coming to bear, I mean, there's, you know, example after example of that, or you know, geothermal, enhanced geothermal. There's any number of solutions that end up being clean and don't incur the wrath of citizens as much as fossil fuel solutions.” 

Heinrich answered, “It’s worth considering, too, that if we do see the level, the scale of natural gas generation that some people are proposing, it will markedly increase the cost of gas for other uses. So, if your house electricity is generated by natural gas, those prices are going to go up. If you heat your house with natural gas directly, those prices are going to go up. If you're a manufacturer and you're using gas, those prices are going to go up. So it is in our interest to find cheaper, cleaner sources of power to power as much of this transition as we can possibly get.”  

Meyer asked, “How do you balance making the big investments that the power system needs or the energy system needs to meet future energy demand, which is going to come from data centers or electrification or manufacturing. Even if you curtain off data centers and be like, ‘This is a bad energy use. We're going to need a lot more energy in the future to do a lot of the things we want to do.’ How do you balance the long-term need to make big investments in the energy system or the power system to meet future demand versus the need to keep costs low in the short term because right now the way we pay for future big investments is to raise costs today?”  

Granholm answered, “Right, rate base. What if these data centers that come on are required to pay for those infrastructure upgrades, which you know everybody's talking about. The president has pledged that he's having people sign. Gretchen Whitmer in Michigan has pledged. I mean, everybody's talking about... In fact, you guys, meaning Congress, just passed out of the E&C Committee, a ratepayer pledge. Great. Let's get a pledge that the hyperscalers pay for the upgrades that they bring clean power that they have responsible, if not replenishment water use, using advanced technologies to be able to do that. You know, maybe you take down some of the opposition, but maybe you also make the grid stronger as well. Maybe these data centers become grid assets because they are supplying power back to the grid, or they have created additional battery usage to make the grid more reliable, or they inject power when the grid is at maximum capacity. But more than that, those are kind of table stakes for data centers. What if they brought more than that? What if, you know, in community benefit agreements. What is the stake that the community has, and what do they give to the community? And to me, this is where the most interesting part of this conversation can happen. Not only should they pay for all those upgrades, but maybe they also pay for distributed energy resources, for home solar and storage, or maybe they help to subsidize EV batteries, etc., EV vehicles — and use the batteries to create a virtual power plant for a portion of their capacity needs to get that flexibility. Now the community has a stake. They get a battery in their home, or they get a heat pump, or whatever... It’s interesting, Volltus has done this with the PJM market. They're going to bid 100 megawatts of distributed capacity into the PJM capacity auction. How great is that? Because they're going to cobble together enough to create a virtual power plant. Why aren't we looking at that? Why aren't we looking at using the grid more efficiently with the resources we have? What Voltus is doing is taking existing assets and cobbling them together to create a virtual power plant. What if hyperscalers pay for new stuff in a community that they're coming into? So I think there's a real opportunity here.” 

Heinrich followed, “I think given the premium that a lot of these developers have been willing to pay – you can reduce price pressure on consumers, and you can invest in more infrastructure.”  

Meyer asked, “What does this look like in policy? Because I think there's a lot of good ideas. There's a lot of goals. Obviously, the Trump administration has advanced their ratepayer protection pledge, which is kind of all of this stuff, but without emphasizing clean as much or at all. There's still a ton of demand to build data centers. What's the policy to focus that demand look like, and what goals should Democrats bring to the, you know, the process of regulating and shaping the data center building?” 

Granholm answered, “There may be a sort of floor that the federal government puts into place and then states take it to the next level. So maybe the ratepayer protection pledge, maybe the table stakes, as I call it, are happening at the federal level, and they're required to meet those. And I think many of the responsible tech companies are willing to do that. And then the states go and follow behind. Maybe they require buffer zones. Maybe they require community consultation, and they have a menu of options that a hyperscaler might be able to bring to make not just a community home, but make a community better than when the hyperscaler got here. Politically, this is hard because there's such an aversion, and people can't imagine that this is enforceable and that you trust them that they're going to be transparent. The transparency issue is a real big deal. If I were running for office right now, I'd say no data centers in my state unless you do these five things, and if those five things are done, then we'll have a conversation.”  

Meyer asked, “What did you think of? Sorry, say your five things. Say your five things.” 

Granholm answered, “No, which is what Gretchen Whitmer did in Michigan, and she's asking the legislature to codify that, or the Public Service Commission in Michigan to do that. That's what needs to happen.” 

Meyer asked, “What did you? I interrupted you. You should say the five things.” 

Granholm continued, “Well, so making sure that you don't socialize the cost to the rate base. Bring your own clean energy. You have a long-term commitment, so there's an exit fee if you if you go early. You have responsible water use. You are flexible. You agree to flexibility within the system, just as a startup, but you must enter into a community benefit agreement, and that community benefit agreement has to be in consultation with the community in question, and it might include jobs, it might include job training and apprenticeships, and there's a whole menu of things that might be possible that I think hyperscalers would be willing to look at.”  

Meyer asked, “Are you worried, if you were to do this, that a lot of data center developers look at that and they go ‘thank you, that's tough, we're going to take this to Texas to build this?’”  

Granholm responded, “Local communities, no matter where they are, I mean, there's been over 100 moratoria passed, local communities in red states and in blue states... my message to these local folks is you have leverage. You have leverage right now.” 

Heinrich interjected, “You've got to be transparent. You've got to bring real value, which is what the Secretary is talking about, to the community from day one, and build trust.” 

Granholm continued, “Raise the bar for all of them, because there's some data center companies who might not be eager to do this, but if you raise the bar as a community and insist on it, maybe they'll go to a place, another place, but maybe, just maybe, that other place is going to be insistent on using its leverage as well.”  

Lessons from the Inflation Reduction Act 

Meyer asked, “Last question. So, the IRA, it was a big bill, and you both played a major role in it, implementation or writing or passage. It tried to electrify a lot of the economy, and obviously, it did a lot of good. Maybe it wasn't going to meet its targets, had everything remained in the case, but it’s impossible to know what would happen with a Harris administration. It was trying to electrify more of the economy and create this big surge of electricity. Now we have the data center boom, huge, huge demand for electricity, and a ton of electricity infrastructure is getting built out now, on the back of the demand boom. What are the lessons from the IRA that we should take? I mean, in your head, maybe you both experienced the IRA. You both experienced, I would say, the IRA era of governance. So, what should we learn from that and apply to the data center growth...” 

Granholm asked, “To the data centers?” 

Meyer clarified, “Or to the next few years, yeah.” 

Granholm answered, “I would like to see a revising of the Inflation Reduction Act. I mean, a rebirth of the pieces that were carved out, so tax credits for solar and for wind, et cetera. I'd like to see an investment tax credit for the grid as well. But I think the lesson in terms of implementation was pretty clear that we just didn't do a good job of selling it. It took too long, so we did a lot of ribbon cuttings, but we didn't do a lot of groundbreakings. Or excuse me, we did a lot of groundbreakings, but we didn't do a lot of ribbon cuttings, meaning, people weren't hired yet for all of these announcements that were made, and so people didn't feel it on the ground, and so they didn't attribute it to the administration from a political point of view, or certainly to the Inflation Reduction Act, which people, everyday citizens, have no idea what that was. So, doing a much better job in getting the word out about why is this factory opening up in my area, why am I hearing about a job fair over here? And connecting those dots, I think, was one of the big areas.” 

Heinrich answered, “Speed number one, and then doing a better job of telling the story. I think that's where we lost the narrative. We had a great story to tell. I really focused, and it was an election year for me, so I focused heavily on the specific factories that were making solar and wind components for these big projects in New Mexico, and I tied it to big construction projects like the SunZia generation and transmission line. I don't think we did that nationally as effectively as we could have.”  

Meyer asked, “Do you think it needs a big, charismatic idea at the center next time, National Grid or Big Underground? We're going to underground all the lines, or something, or would just selling it have been better?” 

Granholm answered, “When I tell people that there were 950 factories that came or announced they were coming or expanding in the United States just to build clean energy stuff as a result of the Inflation Reduction Act, people are like 950 factories coming? I mean, there was a good story there. There really was, and you know, I was on, you know, the main cable networks, but I didn't go on all of the side, you know. And most people aren't getting their news from main cable, so we have to think better strategically about how we communicate, where we communicate, use social media a lot more to be able to get the word out.”