In order to prioritize providing power to AI data centers, Trump wants to seize control of the regulation of the American power grid.

The Trump administration is currently attempting to transfer control of part of the US power grid from the states to the federal government, aiming to clear energy barriers for the large-scale expansion of artificial intelligence data centers by centralizing regulatory power. According to media reports on the 27th, energy officials from the Trump administration encountered strong opposition from state regulators at a public utility regulatory agency meeting in Seattle. The controversy stems from an instruction issued by Energy Secretary Chris Wright to the Federal Energy Regulatory Commission (FERC), requesting the drafting of new regulations to regulate the connection of large data centers to the power grid. According to the current 1935 Federal Power Act, this regulatory power traditionally belongs to state governments rather than the federal level. The White House believes that unified management of the connection process between data centers and the grid by federal regulatory agencies will significantly shorten the construction period, allowing tech giants like Google, Amazon, Meta, and OpenAI to more easily build their own power supply facilities, accelerating trillion-dollar capital investments. However, state regulators have questioned this logic, warning that this move not only infringes on the jurisdiction of states but could also lead to long-term legal disputes. The market is closely watching the surge in power demand from data centers. As the Trump Media Technology Group and TAE Technologies, a fusion energy company supported by Alphabet, reached a $6 billion merger agreement, capital markets are betting that this boom cycle will continue for several years. Meanwhile, Democratic Senator Elizabeth Warren and others have launched an investigation into the issue of data centers driving up residential electricity costs, making energy distribution a new focus of political gaming. Federal government's "power expansion" versus states' backlash State regulators at the meeting in Seattle clearly expressed their dissatisfaction with Energy Department Deputy Secretary James Danly and other officials. According to sources familiar with the conversations cited by the media, state representatives pointed out that Chris Wright's plan violates the regulatory principle of division of power between states and the federal government established by the 1935 Federal Power Act. Former FERC Republican Chairman Mark Christie harshly criticized this plan, calling it one of the "largest federal power grabs sacrificing state interests" he has seen in his 21 years as a state and federal utility regulator. He warned that this would inevitably lead to unnecessary litigation. Mike McKenna, who served as Deputy Assistant to the President in Trump's first term, also expressed concerns about the risks of this rapid strategy: "If FERC acts rashly, they will lose in court and ultimately delay the goal of boosting data center growth." The Trump administration has different considerations. Earlier this month, Trump signed an executive order aimed at overturning state laws on artificial intelligence, allowing the Department of Justice to punish states that enact restrictive AI rules to establish uniform federal standards. Trump emphasized the need for unity and pointed out that competitors should not have to deal with obstacles from state legislatures. White House AI chief David Sacks and other officials have been pushing back against state AI laws, hoping to eliminate barriers in the technological competition. The policy paradox of accelerating grid connection and suppressing electricity prices Trump administration officials argue that the new rules can stimulate the growth of data centers and ultimately reduce power costs. Energy Secretary Chris Wright stated at a natural gas conference in Washington that speeding up the energy production of data centers will make electricity cheaper, countering concerns that AI will drive up prices. Wright has instructed FERC to finalize the new regulations by April 30th, and experts point out that for a traditionally cautious and slow regulatory agency, this speed is akin to "warp speed". Neil Chatterjee, who served as FERC Chairman during Trump's first term, believes that Wright's actions are currently the "most impactful event in the energy field". He pointed out that the traditional conservative utility industry has been slow to respond to the explosive demand from data centers and other large industrial customers, leading to rising utility bills in some areas. However, this approach faces direct challenges from the local level. Florida Republican Governor Ron DeSantis recently unveiled a state legislative proposal aimed at curbing the impact of AI on consumers and prohibiting "utility companies from charging Florida residents higher fees to support the development of mega-scale data centers." Despite facing legal and political resistance, FERC, as an independent regulatory agency, seems ready to cooperate with the administration's agenda. While FERC theoretically could refuse to follow Wright's proposal, several commissioners have signaled their support. FERC's new chairman Laura Swett made it clear at a public meeting in November that in addition to ensuring that Americans "have power available," her primary task is to "ensure that our nation can connect and power data centers as fast and persistently as possible." This statement implies that federal regulatory agencies are adjusting their priorities to support AI infrastructure building, putting the federal and states' power struggle over grid control rights on a path to intensify in the future. This article was reprinted from "Wall Street See", author: Zhang Yaqi; Edited by Liu Jiayin.