6 events in Passaic County with a date

To expand AI economy, state must keep power competitive

By: Carlos Ivan Merino
Your Turn
Guest columnist

..... New Jersey is rapidly emerging as a hub for advance technologies, form artificial intelligence and fintech to block-chain and next-generation manufacturing. These industries promise new jobs, investment and economic growth across the state. But they also asher a critical requirement: enormous amounts of reliable electricity.
..... AI computing clusters, semiconductor manufacturing and hyper-scale date centers require vast and constant power supplies. As the sector expand, electricity demand across the region served by PJM Interconnection - the grid operator for New Jersey and 12 other states - is rising faster than it has in decades.
..... This surge in demand is sparking debate about how best to build the next generation of power infrastructure. Some electric utilities are figuring policymakers to allow them to build and own new power plants, paid for by increasing rates on their customer base. That would guarantee utilities a return on investment and shift the financial risk to customers through their electric bills.
..... However, doing so would fundamentally reshape the electricity system that has helped power New Jersey's economic growth for nearly three decades. More importantly, it could make the state less competitive inn attracting the very technology investment that are driving our future economy.
..... New Jersey benefits from being part of PJM's completive wholesale electricity market. under that system, independent power producers compete to generate electric, bidding into regional markets that select the lowest-cost resources capable of meeting demand. Utilities remain responsible for delivering electricity thorough local distribution networks, but power generation itself is driven by competition.
..... For energy-intensive industries like data centers and advanced manufacturing, the competitive structure is a major advantage.
..... Tech companies often choose locations based on three core factors: reliability, scalability and price stability. Completive electricity markets help deliver all three. By encouraging multiple developers to invest in germination and storage projects, PJM's market attracts a wide range of energy resources that strengthen reliability while keeping price in check.
..... Competition also accelerates innovation. Independent developers bring new, cleaner technologies to market because they must compete on efficiency and performance. That dynamic ecosystem allows the gird to evolve as damned changes, ensuring that new electrically supply can come Online when the economy needs it.
..... Equally important PJM's competitive model protects consumers and businesses from major financial risks. when private, companies build power plants in competitive markets, their investors, not utility customers, bear the risk if those projects fail or become uneconomic.
..... That protection matters enormously when billions of dollars in infrastructure investment are at stake. Across the country, large utility-owned power projects have frequently experienced cost overruns, delays and cancellations. When those projects are rate-based, customers are still required to pay for them even if the facilities never operate as planned.
..... For a state working to attract cutting-edge industries, that kind of financial uncertainty is a serious disadvantage.
..... Tech companies investing billions in data centers want to operate in regions where energy markets are transparent, competitive and capable of scaling quickly. PJM's market-based approach sends clear signals when new generation is needed and encourages private investment to meet that demand. That flexibility will be critical as AI computing and digital infrastructure continue to expand.

New Jersey is ready to grow

..... New Jersey is already well position dot benefit from the growth. Its proximity to major population centers, wold-class research institutions and strong digital infrastructure make it an attractive destination for investments. Ensuring that the state's electricity system remains completive and adaptable will only strengthen that advantage.
..... To be sure, PJM faces challenges as demand accelerates. Interconnection processes must move faster. Market rules must evolve to support new technologies and ensure reliability. policymakers should work with PJM to modernize and improve the system so it can respond quickly to changing energy needs.
..... But returning to a monopoly model of utility-owned generation would move New Jersey in the wrong direction. It would transfer investment risk form private capital to consumers and could slow the pace of energy innovation just as the state's tech economy is taking off. New Jersey's future growth will be power by data, computing and advanced technologies. Preserving a competitive electricity market will help ensure that the power system evolves as quickly as the industries it supports.
..... If the state wants to lead in the AI and digital economy, it must also lead in maintaining an energy system that rewards competition, encourages investment and keeps electricity affordable for innovators and consumers alike.

..... Carlos Ivan Merino is the founder and executive director of the New Jersey Innovation & Technology Alliance, a group focused on advancing pro-innovation policies and strengthening New Jersey's technology economy.

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