A power producer’s view of keeping the lights on. What does rising electricity demand from data centers mean for the US grid?
Energy Gang
Wood Mackenzie
4.6 • 1.3K Ratings
🗓️ 17 March 2026
⏱️ 71 minutes
🧾️ Download transcript
Summary
Energy bills are rising, data centers are multiplying, and the grid is straining to keep up. What happens next?
For two decades, electricity prices in the United States barely moved. Demand was flat, natural gas was cheap, and the system was largely stable. That era is over. A surge in data center construction, accelerating electrification, and the legacy of years of underinvestment in energy infrastructure have collided to create a system under strain.
Nowhere is that more visible than in PJM, the largest wholesale power market in the US, stretching from Illinois to North Carolina, and home to some of the world's most active hot spots for data center development. Host Ed Crooks is joined by Paul Segal, CEO of LS Power, and Melissa Lott, Partner for Energy Technologies at Microsoft, to assess how the system can meet the new challenges it faces.
LS Power is a leading developer and operator of electricity generation and transmission, so Paul is right at the heart of these questions. He is making multi-billion dollar decisions that shape the ways that America’s electricity gets supplied.
He makes the case that competitive markets, given the right rules and durable signals, can deliver the solutions the grid needs. LS Power is pursuing demand response, battery storage, renewable projects, and gas generation simultaneously. And he warns that political interventions, such as price caps, risk weakening the signals that drive investment.
The question of who pays is at the heart of the debate. A bipartisan group of state governors got together with the Trump administration to call for emergency procurement of new generation capacity in PJM, with data centers expected to bear the cost. Paul argues this is inevitable. For hyperscalers to maintain a social license to keep building, he says, households cannot be left to pick up the bill for load growth created by data centers. Melissa brings the consumer perspective, noting that US household electricity prices rose 26% between 2019 and 2024, outpacing income growth and falling hardest on the most energy-vulnerable families.
The episode also looks at longer-term structural solutions, including the case for more competition in transmission planning and the lessons from Texas's wildly successful CREZ program to build out grid infrastructure.
It closes with a discussion of another issue that is high on Paul’s agenda: mentorship and training. He believes industry leaders have a responsibility to create opportunities for the next generation, despite the threat to entry-level roles created by AI. There is a huge task in front of us to build the grid of the future, and we need skilled and experienced people to do it.
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Transcript
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| 0:00.0 | And then when we go back to like the final prices that people are paying, I mean, you combine that. |
| 0:04.1 | Okay, natural gas combined that. We look at those spot prices. What was it? 56% year on year increase. |
| 0:09.6 | But then it still wasn't as high as in 2021. You know, we can remember talking about how prices went there. |
| 0:14.7 | So there's a reason why this is being referred to as the age of electricity. |
| 0:19.0 | Well, it is this moment that that makes it incredibly exciting for somebody who's been in and around |
| 0:23.6 | this business for over 25 years. I haven't seen an instance where so many different |
| 0:30.0 | options require and really merit consideration. |
| 0:34.1 | Like, there's a reason why. And behind that is a multifaceted, multi-dimensional, quick-moving set of forces that are causing |
| 0:44.4 | more pressure on this system. |
| 0:46.6 | And we're at a critical moment where, yeah, we can step into the opportunity and we can make |
| 0:50.3 | investments and make them in ways that work. |
| 0:52.8 | I think there are certain things that are inevitable. |
| 0:56.2 | And I don't see a path forward where the broad set of households and the economy writ large |
| 1:05.4 | is saddled with the bill for the one component of our demand picture that's driving it, and that's data |
| 1:15.2 | centers. |
| 1:22.5 | Hello and welcome to The Energy Gang, a discussion show from Wood McKenzie about the fast-changing |
| 1:27.2 | world of energy. I'm Ed Crooks, and on this show today, we're going to be talking about the strain on the grid and what we can do about it. To talk about that, it's a pleasure, as always, to welcome back Melissa Lott. Melissa is a partner for Energy Technologies at Microsoft. Hi, Melissa. How are you? Hey, Ed, I'm doing great. Excited for this conversation. It's a great way to, I guess, start our week is when we're recording it because it's early in the week. Absolutely. Yeah. Great to talk to you. Speaking, of course, as we always have to say, purely in a personal capacity. And it's also a pleasure to welcome for the first time, Paul Siegel, who is the chief executive of Ellis Power. Hello, Paul. Welcome to the show. Hi, Ed. Hi, Melissa. Looking forward to the conversation. |
| 2:01.7 | Yeah, thanks very much of Ellis Power. Hello, Paul. Welcome to the show. Hi, Ed. Hi, Melissa. |
| 2:18.7 | Looking forward to the conversation. Yeah, thanks very much for joining us. So we'll come on to Ellis Power in a moment, talk a little bit about the company. But before we do that, Paul, I just wanted to get you to talk a bit about your personal story. As I'm sure you know, the first time we have anyone new on the show. We always like to ask them a bit about their careers in energy, |
| 2:35.4 | how they got started, how they got to the roles they now hold. So what's your story? What first made you decide to pursue a career in energy? My path started as a chemical engineering student at Rutgers University. I transitioned from there to doing investment banking at what was then Smith Barney. |
| 2:41.7 | And I always knew that there was one person that I could learn more from than just about anyone else. |
| 2:46.5 | And that happened to be my dad, who had started a little company called LS Power. |
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