The debate that took place in a Washington, D.C., hearing room in June was so filled with energy-industry jargon that most people would not realize they were witnessing a battle over who could own and profit from power plants.

The same fight between utility companies and independent power producers is now happening in statehouses.

Utility companies see the current crisis in the electricity system, driven by rising demand from data centers and high pressure to curb rate increases, as an opportunity. But consumer advocates caution that utilities’ efforts are more a cash grab than a solution.

“We need to plan for contingencies, we need flexibility, we need to plan for redundancies and have all the tools available to us to make sure that when customers turn the lights on, those lights come on,” said Wendy Stark, executive vice president for utilities and chief legal officer for the utility PPL Corp. of Pennsylvania, at the June 4 hearing before the Federal Energy Regulatory Commission.

But states that had changed their rules mostly stuck with the new way of doing things. Competitive markets grew as independent power companies expanded and grid operators refined their processes for overseeing pricing and competition.

Today, 14 states have restructured electricity markets, according to the Energy Information Administration, including California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Texas, plus Washington, D.C. Others have more limited forms of these policies, including Michigan, Montana, Nevada, Oregon, Virginia and Washington.

The hearing at FERC headquarters in June was part of a technical conference about the challenges that regional grid managers and utilities face as they try to bring new power plants online. One of the main issues is that data centers are becoming huge consumers of electricity, sometimes outpacing the ability to build new power plants and leading to concerns that a tight supply of electricity will lead to high prices for everyone.

Data centers are “sort of like an accelerant” to existing concerns about having enough power plants to meet consumer demand, Adam Keech, vice president of market design and economics for PJM, said at the hearing. 

“We don’t have time to waste,” he said.

On that same panel were representatives from some of the utilities that want to own power plants, and some of the independent power producers that stand to be hurt if states move in this direction.

“If the generators and if the market doesn’t supply more generation, the utility could step in,” said Stark of PPL, which is based in Allentown, Pennsylvania.

On the opposite side are companies such as LS Power of New York, which owns power plants across the country and sells electricity in PJM and other markets.

“Can I just dispel some of the false information that’s being given here?” asked Marji Philips, vice president of wholesale market policy for LS Power. She said her company and other power plant owners were investing heavily in new plants and she rejected the idea that market forces were failing to meet demand.

Changes in state law would allow utilities to enter this market with minimal risk, while the existing players would face high risks and new competitors.

Todd Snitchler, president and CEO of the Electric Power Supply Association, a trade group for independent power producers, said in an email that lawmakers should be wary of “a reversal in policy and a return to the monopoly utility approach for generation.”

On this point, he agrees with Amisha Rai, senior vice president of advocacy at Advanced Energy United, a trade group whose members include many of the leading solar, wind and energy storage companies.

“While growing energy demand is a challenge for all states to tackle, the solution isn’t for states to abandon market competition but rather to continue to press grid operators to make improvements that ensure the lowest cost for ratepayers,” Rai said in a statement.