Name: Scotty, We Need More Power
Uploaded: 2025-12-10
Duration: 18 min 1 s
Description: The explosive growth of data centers amid the AI boom has put incredible stress on infrastructure—especially the electrical grid. Tech giants have partnered directly with utility companies and billions have been committed to upgrades. Will capacity grow fast enough to keep prices from rising? Will policy keep pace? And is all of this enough to maintain AI's momentum?

The explosive growth of data centers amid the AI boom has put incredible stress on infrastructure—especially the electrical grid. Tech giants have partnered directly with utility companies and billions have been committed to upgrades. Will capacity grow fast enough to keep prices from rising? Will policy keep pace? And is all of this enough to maintain AI's momentum? 

Scotty, We Need More Power

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Calvin, hello. I, I feel like we ended the last one on a meditative note, and I'm noticing your mood beads there. So are you the calmest man in the power system right now? I'd like to think so, at least I'm thriving for that, but probably not, probably not. Well, look, I want to start with the fact that if we were doing a brainstorm with the head of a major utility company 10 years ago, we might have been talking about wind farms. And and solar panels and sort of happy consumers giving power back to the grid and our green cities and here we are in a panic mode about AI. So let's start. Has the dream died of of the first scenario of. Cleaner power and everything else. So first, let me say good morning and good morning to you. Thank you. I like the jacket. Um, yeah, well, thank you. I mean, I feel my son bought it and I feel like, uh, you know, Ralph Lauren should pay me to be wearing this big a thing on stage. So there you go. I, I would tell you, I would, I would tell you. We're not in a panic mode, 1st. 2nd, that dream has not died. We are a country that needs to continue to invest in all technology whether it's nuclear, wind, solar, gas. We need every electron. To make a difference we need that because we're in an unprecedented time where we're dealing with low growth and that load growth is being driven by technology data centers but also the onshoring of manufacturing, the electrification of everything, all of that is coming to a head and I say this all the time is that. I've been in the utility industry for about 25 years and in my entire career and probably the last 4 decades we have never had a moment of this amount of low growth and what a great opportunity we are in, but we need to seize it. And unfortunately for us as we get caught up in policy debates as to what is good, what is bad, what is, not just policy debates, you're actually election issues now in some of the areas that you're in, right? Was it the price of electricity is the new eggs, and that's not a good thing and. Um, so, so talk about that, even just the areas that you're in, incredible, that's both an area of incredible business growth but also affordability is acute in places like New Jersey. No, thank you for the question. So think about Exelon. We have the privilege to operate in some of the largest cities in our nation, Chicago. Uh, New Jersey, New Jersey, Baltimore, DC, Philadelphia, so you've got urban. Rural coastal and we have some of the largest uh disparity of incomes in the nation so affordability is key, which is exactly why it was an issue in New Jersey where but this is what you can't have progress if you don't invest, you know, so we want jobs we want economic development but don't do anything. It, it, it's not going to work. So what we are trying to do and we are partnering with our elected officials to say there is a thoughtful way of doing this and that goes right back to policy matters and I have 10.7 or almost 11 million customers to think about and I have to serve. The lowest income to the wealthiest, so you take DC as a microcosm. I have to serve the 2nd ward the same way I serve the 8th ward. Well, it's interesting because you actually do not own the underlying, um, power plants. You are the Constellation Energy that was spun off about 3 years ago. Now you want to get back in. So, so how do you want to get back in? Why is that important since we're talking in the context of Scotty, we need more power. Calvin, we need more power. Is that what it's going to take? You need to own this again. Well, let me just be very clear. I'm good. I don't want to get back into it, but if they're not going to build, someone needs to. What I always say is the independent power producers have no incentive to build anything new. Because they're maximizing their assets, which is fair for the current market conditions, and they were being when when low growth wasn't occurring they were getting pushed so now that growth is occurring they're able to maximize the dollar using New Jersey as an example. The average residential customer last year in New Jersey saw their bill go up $36. You know what, supply, the supply, the piece of that, it went up $38. I actually reduced their bill because of the reconciliation and blame and yet they blame me, and that is concern. So what we're doing is we're telling policymakers the warning lights are on. You're you're driving your car, the check engine light is on. You're like, I'm gonna keep pushing this. And no one's gonna pay attention until it breaks down and then everyone's gonna say, Calvin, why didn't you tell me? So what I'm doing is I'm telling you on that hottest day or that coldest day you might have a supply crunch and people are going to suffer. I'm telling you you have to fix it now. So that's why regulated generation is so talk about the talk you made this announcement yesterday with Next era. It's uh two states. It's intra utility red, blue. I mean, good for you that there's a man who's bringing us together here. Talk a little bit about why that matters. Is that something you think's critical? And again it's in the context of a conference where. The trajectory of AI and the trajectory of power are not necessarily on the same track. So Diane, let's go back to what we started with. You don't get data center growth, AI development, and so forth without building things, and that 765 KV line transmission system that we talked about announced yesterday with Nexttera is key because what it does, it's the highest voltage transmission system going across Pennsylvania and West Virginia, 220 miles, and what's so key. About that, it's helps with reliability, resiliency and affordability all at once. That that is the largest scale transmission system and it maximizes the output of the system. How real is the issue of of NIMB for those, you know, the not in my backyard phenomena, both with there's the data, you know, do you want a data center in your backyard and now do you want transmission lines coming across? Do you get much pushback these days just given the need or is it just every day? And what what I say to communities and what I say to data center developers what I say to my team members, you have to do it with the communities you can't the communities cannot feel you're doing it to them we're going to create jobs we're gonna create a tax base but you have to take their voice into consideration and those who do it well. Do that those who don't, they just show up and start building and it never goes well and what we started about a year ago really working with the communities on identifying the path of least resistance but you're always going to have some noise but you don't get to where we wanna go if we don't build something. Can you just anchor for us how critical a situation are we in? Because you know we're talking about accelerating growth next year, this whole conference. Did you really get the sense that 2026 is going to be the year where the curve goes up? Can we handle it in the current context that we're talking about with your six utilities? I think we can. Because we've always had, we've always shown and demonstrated our resilience in stepping up to the challenge each and every time. Now understanding I'm not a believer that the growth that we are talking about is going to be 10x or 15x, but I do believe we're going to have growth. I do believe we have developers that are playing states against one another and there's some double counting. And I also am optimistic because we do have the most resilient infrastructure in the world. We can maximize in the world. We do, we do, we do. When you, when you think, and I can speak directly, we will be, we will be putting as an industry $1.1 trillion of investment over the next five years, and you are chair of the Edison Electric Institute, I should say, so you've got the whole macro view of what's going on. I think Diane, you were trying to say I'm biased. Yes, no, no, no, I'm just saying. Our man in Washington in many contexts here, so yes, I, I am, and I, and I, I know my peers and we know our number one job is to provide a reliable and resilient system because it doesn't matter to you. More of you are working from home, you're educating your children from home, and if the lights don't come on, all the other stuff that we talk about, so you don't think about electricity until your rates go up or there's like a blackout and then it's, that's it and we're the backbone, we're 5% of the economy, but we power the next 95%. And we have to get this right. You know, let me talk about AI generally, and I'm going to take some questions from the audience. I mean, you're talking about it sort of as something you're powering, of course you must be using it yourself in some context. What are some of the tools you're using that are helping to both address these issues and grow the business. It's, it's a great, it's a great question, and I always say that you don't want your utilities to be the leaders in technology, really, why not? You don't, because when we lead and something goes wrong, bad things happen, so we, we want to be, I'll, I'll speak, I can, I'm speaking for Exelon, not EEI. When we, we like to be followers, we don't wanna be laggards, but we wanna be followers we cyber security is key for us because every piece of technology that you put on the system you make yourself more vulnerable. So we are always thinking about protecting the grid both physically and through cyber and we're also making sure our people are properly trained. I listened to the interview, I think it was Brad right before me and he was talking about people are the key to that change. And understanding utilities, it's not uncommon to walk into a utility and people have been working there 30, 40, 50 years, second generation. So that change management is second generation, aren't you? I am. You did your homework well. I mean, thank, thank you, uh, yeah, all of them. No, well, you know, talk about, talk about though with. AI, I would think that that's something we talk about as helping to basically alleviate and manage power. Are there any particular tools that you are comfortable with? I would say two things, and then I will tell you how I'm thinking about it in the future. The two things that we do is we like customer interaction. When you call in, if you ever need to call in, I want to be able to anticipate your needs. We're utilizing AI to do exactly that. 2, I'm probably angry because happy, but no, I'm just kidding, right? You don't call your utility when you're happy. You, you don't. And yeah, I, I've not had one of you call me and say thank you for my lights today, but that's all, that's all right. Noted. We're not working on that. Just wait till Monday. You'll be flooded. The, the second piece is making the regulatory and financial structure in which we operate more streamlined. We can take what takes months of just gathering data and, and we're utilizing that now. How do I want to use it? I talk about Exelon investing $38 billion into its system through 2028. We have a goal and we have stated it publicly that as a customer you should expect 24/7 reliability on blue sky days period. When the sun is shining, there's no rain, you should expect when you come home it's nothing more frustrating when your lights have been blinking and you're like what's up? Why? Shame on us. The second piece is after a storm, which is not a major storm, we should have 100% of our customers back online within 12 hours. And when we have a major storm, 100% of our customers back online within 48. That is significant. No one has ever said that's what they're going to do, but that's what you should expect from a world class utility, and I have to manage affordability. So how does AI come in? AI comes in and helping me anticipate where I'm having problems in my system so I can do proactive remediation where I can get in there and send you a notice and say you're gonna be down from 8. To 10 because we're working on this line that's not an outage that's me partnering with you as my customer and plus I mean it it is one of those industries where you have capped rates you don't have full, you know, um, I wanna take a question if there's any questions from the audience raise your hand, um. Yes, we have one over here and you can say thank you and, and you can please thank Calvin first and then tell us your name first. Thank you for the lights and everything else. Um, Ian Bramson Black and Beach, um, and uh my thank you for the partnership. You're welcome. Oh, OK, now this is a friendly question. My question's about cybersecurity. I run our industrial cybersecurity side. You had mentioned that earlier. You're talking about load. You're talking about. You have to go build stuff. Everything's at the forefront. We're putting in AI in here and not on the IT side. I'm talking about the operational side, keeping those lights on, keeping the AI centers running. What's the priority? What are you actually doing to build in fiber from the beginning? What's, what's in that? What, what are you doing there to make sure that that emerging threat is you're staying ahead of it? It's, it's all about governance protocols. Is early on we have we have we have a, a defensive depth strategy in all of our cyber security efforts that is embedded in any new technology that we're bringing into the system and we have protocols and governance procedures that have been set up way before we do any and. That just not goes into technology that goes into when we're building something we have to build it from the mindset that there's people out there that want to violate that system and they're trying to penetrate it each and every day so it is ingrained in everything we do, but what happens with that, it takes longer. Because now you have another sector that you have to incorporate into it and I'll be honest with you, the concern is not so much what we're doing my concern is by do my suppliers have that same ability to put the same protections on their system because once they get in they're in so we have to then go back to everyone else we're working with to ensure that they have the same protections and safeguards your comfort level right now with that given the number of. Stakeholders you have. It's not as high as I'd like it, um, because 1 to 10, I would say 6 or 7, yeah, because I would, the reason I say that is that I'm a big believer to give small businesses opportunities and small businesses do not have the capital and the infrastructure to put it in place. So therefore I have to put it's a belt and suspender type approach because I, I want you to grow with me, but at the same time I need to protect my customers and the system. You know, I, before, um, I give you some final thoughts, and if there's any other questions, like, forgive me, I just, uh, I'm, I don't see your hands. I'm gonna, um, I'm sure there's some out there, but. Um, we're talking about, uh, you know, you're mentioning almost really diversity in terms of bringing in some of these smaller suppliers, affordability, clean energy. How is the landscape around some of these other priorities, uh, shifting and especially clean energy because there's no question that, you know, we're on a trajectory where we have to care about that sort of thing. I would tell you that at Exelon it's still a priority because. When you I the jurisdictions that I outlined for you earlier, clean energy is still a priority nuclear and my, my view is that I'm going to partner with each and every one of my customers to achieve their goals and I've worked with administrations from Democratic to Republicans and the reality of it is is that. We are true to our mission and our values we're gonna be OK and that is how we outline it now the challenge that I do have is that because we're a 100% regulated business we need to get paid for all the work that we're doing and having those conversations up front matter. We're talking about 2026 predictions. Um, I know our time is winding down for final thoughts, but, uh, what's your prediction for prices next year? They're going to go up by how much double digit a lot. Look at exit to your right, so you're getting an out, but what, what do you, uh, any thoughts? Is it going to be something that is comparable to this year's increases? So let me, let me put it in perspective for you. We operate within the PJM marketplace. So again, the majority of us don't own generation. Last year, the governors in the PJM region put a price cap on. It saved customers $3 billion or the prices would have been higher. The governors have recommended extending that price cap for another cycle that would save anticipate another $10 billion. So that's why I can tell you with certainty that the prices are going to go up. So in the 39 seconds we have left, any final thoughts you want to convey to this audience of tech leaders, entrepreneurs, people forging ahead with the future of AI? Believe partnerships matter. We will get better because of our ability to work with you and if we do not get your voices into the conversation to make us better because utilities we know what we do but in partnership with you we can help technology make us more efficient and drive progress. I cannot think of a better place to end than there please join me in thanking Calvin Butler. Thank you very much. Thank you.