Document Type

Article

Publication Date

2026

Abstract

The U.S. electricity system is premised on the ideas that utilities have a duty to serve all customers in their service territories and that electricity supply should always meet demand. Until recently, there has been little reason to question these foundational premises. U.S. electricity demand has remained flat for over a decade, and during earlier periods of growth, new energy generation plants were relatively easy to build. Now, however, electricity experts predict massive load growth—most notably from data centers to power artificial intelligence and cryptocurrency—and building new power plants is no longer easy.

Major efforts are underway to increase electricity supply. However, there are also important lessons from legal frameworks developed for other resources—natural gas and water—for which short- or long-term scarcity is or was the norm rather than the exception. This Article uses these lessons to reevaluate electricity law’s foundational principles, like the duty to serve, and to propose new approaches to meeting electricity demand.

Based on principles distilled from federal natural gas markets and U.S. Western water law doctrine, this Article proposes a contracts- and trading-based framework for regulating data centers. We call this framework “demand-side connect-and-manage.” This framework can reduce the likelihood of overbuilding energy generation plants, allocate risks to and encourage innovation from major data center companies, and accelerate data center grid interconnection. Moreover, our analysis supports a shift in basic assumptions of electricity law and a reexamination of the roles of regulators and markets in electricity systems.

Comments

Originally published as Alexandra B. Klass & Dave Owen, Allocating Electricity, 94 Geo. Wash. L. Rev. 60 (2026). Reproduced with permission.

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