Open Circuit Podcast Summary

Episode: "The real reason electricity prices are rising"
Date: October 31, 2025
Host: Stephen Lacey (Latitude Media)
Guests: Jigar Shah (investor, former DOE Loan Programs Office director), Dr. Caroline Golan (CEO, Envision Energy Advisors; former global head of energy market development, Google)

Episode Overview

This episode tackles the real, underlying reasons behind rising electricity prices in the U.S.—debunking popular narratives that blame renewables or data centers. The hosts unpack new research from Lawrence Berkeley National Lab (LBNL), explore the true cost drivers (infrastructure replacement, extreme weather mitigation, and natural gas volatility), and discuss the complex interplay between utilities, regulators, and emerging large loads like data centers. It’s a deep dive into the economics, business models, and political constraints shaping the electricity market today.

Key Discussion Points & Insights

Debunking Common Myths: It’s NOT Renewables or Data Centers

[05:39–07:49]

• The LBNL report shows the main price drivers are not the often-blamed renewable mandates or data centers, but rather:
  • Infrastructure replacement (aging wires, poles, and transformers)
  • Grid hardening against extreme weather
  • Natural gas price volatility
• Renewables: Market-based renewables have actually lowered generation costs by 35% since 2005.
• Transmission & Distribution (T&D): Transmission costs have tripled; distribution costs have doubled.
• Data centers: Counterintuitively, data center growth has helped distribute grid modernization costs over more customers, lowering per-customer increases in some states.

Quote:

“States with the most renewables often have the cheapest power. Data center growth actually lowered prices. Meanwhile, the real culprits, infrastructure replacement, extreme weather, and natural gas volatility barely come up in the conversation.”
— Stephen Lacey [01:49]

History & Structure of Utility Investment

[07:49–14:24]

• For the past decade, utilities have responded to flat load growth, disruptive technologies, and system aging with huge grid modernization investments.
• Cost-benefit analyses often showed only marginal reliability improvements (e.g., power on for one additional hour per year) for significant cost increases (sometimes 20%+), but were approved due to lack of robust frameworks among interveners.
• Much of the new costs have been “peanut buttered” (spread) across all customer classes, disproportionately impacting states or areas with less new large load growth.
• Many upgrades are bundled and opaque—tree-trimming is classified as “modernization,” for example.

Quote:

“The cost benefit analysis was just a few points increase in reliability... and they were approved. Interveners didn’t have a framework for how to assess and push back.”
— Dr. Caroline Golan [07:49]

Lack of Innovation & Regulatory Barriers

[11:35–16:39]

• U.S. utilities are slow and risk-averse in adopting new technologies (dynamic line ratings, batteries, advanced analytics, etc.), even as other countries deploy them at scale.
• Regulatory frameworks use different measures for investments on the generation side (meeting load growth, peak demand) and T&D side (reliability, safety), rarely integrating these perspectives for optimal, holistic planning.
• Utilities capture cost savings (e.g., through smart meters) but often fail to pass benefits or useful data on to customers.
• The regulatory process is resource-constrained, favoring pre-approved, rubber-stamped utility filings and creating an adversarial dynamic.

Quote:

“Utilities continue to be where innovation goes to die... instead of deploying something 90% cheaper, they stick to what they know and like.”
— Jigar Shah [11:35]

Utility Accountability, Transparency, and Power

[17:06–23:10]

• Transparency in T&D investment is hampered by arcane models, inadequate technical expertise among regulators and intervenors, and lack of system-wide data integration.
• The dynamic often results in utilities overwhelming regulators with filings, regulators unable to scrutinize everything, and ultimately, pre-approval of most utility spending.
• In some cases, utilities have pushed back personally against regulators who attempt to challenge filings or seek higher scrutiny.

Quote:

“I never got an app for my phone that shows me how I use power, even though I was promised that... Mission Data has shown that utilities have systematically made sure that data never saw the light of day.”
— Jigar Shah [19:57]

Business Models: For-Profit v. Public Utilities

[23:10–26:04]

• The for-profit investor-owned utility (IOU) model may be structurally inadequate for rapid innovation and public-interest outcomes, compared to municipal or co-op utilities.
• However, even many public utilities are risk-averse, though their rates tend to be lower due to different incentives.
• Wildfire and storm costs are often woven into justifications for raising rates and passing bulk investments, without meaningful scrutiny of individual line items.

Renewables: How Incentives Shape Impact on Prices

[28:03–32:21]

• Market-based renewables (e.g., corporate PPAs) have lowered generation costs and reduced prices.
• Mandated renewables raise prices when not paired with planning, flexibility, or regional integration:
  • Example: Colorado’s RPS led to low-cost wind but required extensive (and possibly excessive) transmission upgrades, raising costs overall.
  • Markets that simply demand the lowest-cost power (like Georgia) saw solar reduce prices.
  • Poorly planned balancing (sometimes using new natural gas) also increases costs in some states.

Quote:

“Market-based renewables lowered prices, while renewables built under state mandates raised them slightly... It’s the details of how you plan for that and how you meet it.”
— Dr. Caroline Golan [28:33, 31:38]

Large Loads (Data Centers): Friend or Foe?

[34:06–44:56]

• Fast-growing industrial loads like data centers have historically lowered per-customer prices by spreading out massive system costs.
• “Peanut-buttering” costs works when there are more customers, but not in areas without new load growth, leading to sharper increases.
• The specific location (grid interconnection point) and flexibility of these data centers matter significantly—strategically sited and managed loads can stabilize grid operations and costs.
• Legacy policies (and industry precedent) make it difficult to mandate flexibility from large industrial customers.
• Requirements on new loads could shift (e.g., mandating participation in demand response or energy storage integration) but require regulatory and process overhaul.

Memorable Exchange:

“What determines whether that trend continues? What makes costs go up?”
— Stephen Lacey
“If we maintain a posture that the only way a large load can interconnect is through traditional upgrades... then they will raise rates. But if we widen the aperture on solutions, they will not.”
— Dr. Caroline Golan [44:56]

The Path Forward: Rethinking Policy & Incentives

[49:34–61:36]

• Data centers and utilities must innovate—leveraging storage, grid-enhancing technologies, and demand flexibility—to keep costs down and avoid overbuilding traditional infrastructure.
• Current business models incentivize capital expenditure, not electronic efficiency or innovative solutions.
• The federal government is stepping in: DOE asked FERC to fast-track large load interconnections (with flexibility), attempting to break gridlock and spur new solutions.
• Guests are divided on whether process limitations or lack of state-level utility incentives will undermine these efforts.
• Both agree: There is a window for meaningful reform—though it requires coordination by utilities, regulators, policymakers, and industry.

Quote:

“This is a gift to a lot of these utilities... if they scaffold it to help them manage their system, not as a reactive tool.”
— Dr. Caroline Golan [59:17]
“If we get innovation... accelerated at this moment when it can reduce everyone’s electricity bills by 20% by 2030, I’m here for it.”
— Jigar Shah [61:15]

Notable Quotes & Memorable Moments

• On data center impact:
  “My kid asked to go as a vampire, and I told her, that's redundant. We're already getting drained by the power company.”
  — Stephen Lacey (opening joke) [01:37]

• On peanut-buttering:
  “That’s actually the problem. We incentivize capital deployment, we don’t incentivize electrons.”
  — Dr. Caroline Golan [47:04]

• On transparency:
  “It’s not as if the utilities are creating a black box... I think it’s a product of the utilities not knowing what the scenario analysis should be or how to place it correctly.”
  — Dr. Caroline Golan [17:06]

• On FERC’s fast-track proposal:
  “The only thing that can happen to solve this problem is co-location, data center flexibility... those are tools, but not the full toolkit. I’d love to see comments around widening the aperture.”
  — Dr. Caroline Golan [54:08]

• On the political moment:
  “We're in a political moment where governors are making promises they don't know how to keep, and the only way is to make these changes.”
  — Jigar Shah [49:34]

Timestamps for Key Segments

• Myth-busting: What's really behind rising prices: [05:39–07:49]
• Deep dive on grid modernization and utility investment patterns: [07:49–14:24]
• Regulatory and business model barriers: [11:35–16:39]
• Transparency problems in utility spending: [17:06–23:10]
• For-profit vs. public utility structures: [23:10–27:15]
• Impact of renewables and planning: [28:03–32:21]
• Role of large loads (data centers): [34:06–44:56]
• Future risks/opportunities, FERC/DOE fast-track, and reform proposals: [49:34–61:36]

Tone, Style, and Approach

The hosts combine unfiltered candor, technical yet plainspoken analysis, gentle humor, and occasional barbed commentary about regulators and utility inertia. Dr. Caroline Golan offers on-the-ground industry perspective, Jigar Shah mixes policy history with strong opinions on innovation, and Stephen Lacey keeps the conversation sharp and accessible.

Bottom Line Takeaways

• Rising electricity prices are driven by grid hardening, aging infrastructure, and natural gas volatility—not renewables or data centers.
• Data centers and industrial load growth have actually helped moderate price increases in many states.
• A broken business model and ossified regulatory process prevent adoption of innovative, cost-reducing technologies.
• Real reform hinges on moving beyond capital expenditure incentives—and on political will, coordination, and transparency.
• The coming years are a rare political moment to redefine how the grid works—and who benefits.

For further detail and full context, listen to the episode or visit Latitude Media’s in-depth reporting.