Welcome everybody and thank you for joining us. I'm Fred Kemp, President and CEO of the Atlantic Council. It's my pleasure to welcome you to today's conversation on powering the AI future. I'm honored to have the opportunity to speak in a few minutes with Calvin Butler, the President and Chief Executive Officer of Exelon, one of our nation's leading utility companies, on how the rapid development of AI is impacting the energy sector, and I'll come back to introducing him in a moment. Reliable and affordable electricity is the bedrock of America's economic strength and national security, powering its industry, cities, and digital infrastructure. And of course, we're all caught up right now in what people are calling the intelligence age, and that is the AI revolution and all the impact it's going to have. After years of relatively flat electricity demand, the US and much of the world now face surging demand on a scale not seen since the industrial mobilization of World War II. The surge is driven primarily by electrification, the return of domestic manufacturing, and data centers supporting AI development. Meeting this moment of sustained energy demand growth requires getting more from existing infrastructure and, of course, building new infrastructure more quickly. And power supply is now also a strategic geopolitical issue. If the US electricity system cannot keep pace with demand placed upon it, the United States risks losing its edge in innovation and AI leadership to geopolitical opponents. So a reliable and abundant power system enables the US to support allies and partners and to counter adversaries' AI ambitions.
So before we begin the discussion with the excellent CEO, I'd like to welcome Representative Sean Casten to provide opening remarks. And he serves one of the districts in the Exelon coverage area, and I hope in your remarks you'll talk a little bit about who you represent in Chicago. But here's what I want to say about him: Congress has no shortage of lawyers but very few members who can read an energy model, build a clean energy company, and then write the laws that shape America's technological future. Congressman Sean Casten of Illinois is that rare combination — a trained scientist and engineer, a successful clean energy entrepreneur, and now one of Congress's most knowledgeable voices on climate, power markets, and the electrical grid, and he has the committee assignments to get it done. We were talking outside before this and I just said it's a pretty unusual path to Congress, so I hope you'll talk a little bit about that as well. As artificial intelligence drives an extraordinary new appetite for electricity, he brings something Washington urgently needs: an understanding not only of what policy should accomplish but of how energy is actually produced, financed, and delivered. So please join me in welcoming Congressman Sean Casten.
Thank you, Fred. So I wasn't going to put this in my remarks, but because you asked — I was joking that some students recently asked me what they should do if they wanted to get into Congress someday. And I said, 'It's super easy. You just go get an undergraduate degree in molecular biology, do cancer research for a couple years, you go back to grad school, get a degree in chemical engineering, you do some technical consulting, you start a couple companies, you sell them, and 100% of the time, you can get into Congress on your first try if you do that.' So I thought I'd give just a little bit of perspective on AI and data centers and energy as it comes from Washington. And I have to start this with the caveat that's one of my great frustrations on energy policy in Washington, Mr. Secretary, is that we often do energy politics. We sometimes call it energy policy. And we're in one of those moments where I think we are vastly over-indexing on conversations about policy as related to data centers and their impact on energy. We are vastly under-indexing on the actual politics that's driving this in terms of our public conversation. And we're under-indexing on the point that Fred made — that we are at a point where the world is electrifying for a whole lot of structural and fundamental reasons. If you have a power plant that does not consume fuel to make power, whether or not you're getting a return you're happy with on that power plant is an entirely separate question from the fact that that power plant dispatches ahead of everything else on the grid. Whether you're in China or in Illinois, your nuclear plant, your solar plant, your wind plant is driving down the long-term cost of power, which is pushing more and more industries to electrify. And for the first hundred years of our history, electricity growth grew with GDP. It then flatlined from 2008 to 2020 and now it's growing again. And we're having conversations again that we used to be more comfortable having about when big loads come in, how do you deal with rate equity? How do you deal with building all these things out? And what I'd submit to you is that from a policy and technical perspective, it's not very hard to build out the grid and to deal with the rate equity questions and to put the appropriate controls in so that this spiky load doesn't lead to voltage instabilities. We know how to do all that stuff. And historically, we've dealt with the rate equity questions of what happens when the big company comes to town that's going to generate some property tax revenue, but the governor says, 'wink wink, nudge nudge, could you give him a little bit of a discount on the rate? And is that fair?' That happens. We know how to deal with that stuff.
I think what is particularly hard in this moment, because I said we under-index on the politics, is that you could not have a worse advocate for data centers than the tech industry. And they are making all of the politics way harder, because remember the electric load growth started under the Biden administration before we were talking about AI, because we were seeing manufacturing return to the United States, we were seeing vehicle electrification. It's different, but it's also kind of the same question of how you deal with that load growth. But we didn't have the case of an industry saying, 'I grew up on Section 230, which says I cannot be held accountable for anything that is said on the platform I operate. I want liability waivers. If you don't give me liability waivers, I'm going to throw money in your next election. When I go and I want to build a data center in your community and the utility says I can't build here, I'm going to say, well, forget about you. I'm going to bring my own gas turbine and I got a sweetheart deal with the administration to get an air permit exemption.' All of that has created a deep hostility to the industry, which is manifesting in — I would like to have closed water heat exchange loops, I would like you to not have backup generation, I'd like to have more local participation. And I'm not saying any of that is invalid, but that anger is coming from, I think, a hostility to the tech industry at large. And I think this sense among a lot of parts of our country that the future that I thought I had as an American and the levels of equity that I thought I was entitled to doesn't seem to be there anymore. And I want some heads on pikes. And I think that's a very dangerous moment, but I think that's sort of coming and is informing a lot of that.
Now, having said all that, and I'm really delighted to have Calvin Butler here because you've been really at the forefront of this, I think there is a really legitimate conversation that is somewhat unique to this load growth. We're in this period where you've got massive amounts of capital being deployed in a space where everybody kind of knows that this is looking kind of bubbly. It's looking like there could be a washout. I need to make sure that if the washout comes, I'm in a position to sort of control my own future and be the person who consolidates. And when you're in that kind of a world, there's a huge incentive to build fast. There's not necessarily an incentive to build particularly efficiently. There's not necessarily an incentive to be thoughtful about all the equities. It's sort of like who's going to be the first to cross the post. And so I think it's putting a lot of pressure on both regulators and the utilities, especially the regulated ones, to say: how do I not deploy capital for something that's not real? How do I do this in a fair way? And I'm sure you'll talk about it, but I think it's creating some challenges as we think about — maybe the washout never comes, but we know what bubbles look like, we know what this looks like, and how do we make sure that we're doing things that are in the greatest interest of the larger public good. So I hope that's helpful. Really looking forward to the conversation. You couldn't be in better hands than with my favorite utility CEO. And thanks for humoring me up here.
Thank you, Representative Casten. And now I'm pleased to introduce Calvin Butler, President and CEO of Exelon. So artificial intelligence may live in the cloud, but it runs on the grid, and few leaders understand that better than you. As President and CEO of Exelon, one of America's largest utility companies, responsible for networks that deliver electricity to nearly 11 million customers across six utilities.
And where are they located?
So let me begin by saying hello to everyone and thank you for including me. Exelon is headquartered in Chicago, Illinois. And so our congressman's utility is ComEd, which also happens to be the fourth largest utility in the country. And then through a series of acquisitions and combinations, in 2000 we combined with Philadelphia Electric Company, PECO. And in 2012 we combined and we bought Constellation Energy and BGE, so that gave us that mid-Atlantic footprint further into Maryland. And in 2016 we acquired Pepco Holdings, which consists of our nation's capital, Atlantic City, and also Delaware. So those are the jurisdictions that we operate in, and we have the privilege and responsibility, as you said, to serve 11 million customers, and I think we do it better than anyone else.
And including me through Pepco. So there we go.
I did check on that. Thank you for paying and just being on point today. And Congressman, he's in a suburb of Chicago, and we have the privilege of serving him.
And by the way, you noted that Secretary Moniz is in the audience, also a member of our international advisory board, former Secretary of Energy. It's great to have you here, sir. So you're at the center of one of the defining questions of our time: Can America produce and deliver enough power quickly enough for the AI race without sacrificing reliability, affordability, and our climate ambitions? So you've said the energy industry will change more in the next decade than in the previous century. Can you talk about that — the big picture, how's the rapid growth of AI data centers changing the way that Exelon works, utilities work, how you think about the grid?
Yeah. So I think the Congressman did a wonderful job of framing the discussion. We are in a time of transformation, and let me tell you why I say that. One, the unprecedented load growth that we're experiencing — since I've been in the industry, and I started out right out of law school in the industry and then I've been with Exelon for 18 years, this was never a concern. We'd flat or you would grow at best-case scenario one to two percent. So now with this load, and we had shaped our regulatory and legislative routines on that flat to moderate load growth, and our grid was very simple but complex. Simple in what we were asking it to do was to deliver electricity one way and let it function, and we would communicate with our customers. Now you have a level of growth that we don't have adequate supply to meet. You also are asking the grid to do something it has never done before: bidirectional communication and delivery. We're taking load now. If you have rooftop solar, you're giving back to the grid. You have battery storage units, they're harnessing this for peak demand. You have your F-150, you're plugging it up and you're supplying power. So that is the complexity, and I didn't even talk about all of the technology that is going on, the data that we have, and what we're providing. That technology also makes the grid more efficient but also more vulnerable. When you talk vulnerability around physical and cyber attacks, how do we manage that? How do we communicate to our customers? Those are all the things that are making this time for the energy sector transformational. But it's also exciting because when done well, it can benefit all customer classes. We know how to do this, but it has to be thoughtful. Thoughtful doesn't mean slow, and it has to be very intentional about how we show up across the country in doing this. I think the grid is ready. We have the most reliable grid in the world, and I know the leaders of this industry are up to the challenge.
Thank you for that answer. Now I didn't go through a long biographical introduction of you, and that was intentional, because I want you to share a little bit what experiences you've been through that help you now — because what's fundamentally different about AI-driven electricity demand, how you see it from your past jobs, how is this different from previous waves of load growth? What does it mean for how you plan, how you invest? And then you were talking about the cyber threats — the cyber threats also come from AI. And so how have you got to manage the grid differently?
A lot in there. So let me try to frame it for you. And I'll use Exelon as context, because I can speak to that, and I'll talk a little bit about the industry. I just finished my term as chair of Edison Electric Institute, the investor-owned utility trade association, so I'll give you a different perspective there. Through 2029, we have committed to invest at Exelon $41.7 billion of capital. The industry has committed significantly larger overall to making sure we're ready for this wave of growth. What's different about this wave of growth right now is the speed in which it's happening. Now whether you think it's 10x or 5x, it's significant. So put that in perspective for those of you who don't talk utility jargon all the time. I just shared with you that ComEd is the fourth largest utility in the nation. Peak demand of Commonwealth Edison in 2024 was 23 gigawatts. What's a gigawatt? Think about one nuclear reactor — one nuclear reactor generates about one gigawatt of power. So ComEd at peak demand was 23 gigawatts. We have estimated by 2030 we will add another 30 gigawatts to ComEd's system. That's just Northern Illinois, ComEd's system. That's the level of growth that we're talking about. So how do you manage that across the country and keep up with adequate supply? So when you say what's different, that's the magnitude in which we're talking, that's what makes a difference, and the speed in which it's needed to go, because as the Congressman said, the speed is not just for technology innovation but also, I would argue, national security, because we do not want to fall behind in this race as we go forward.
You also asked the question — my background as a lawyer has helped, but it's that regulatory and legislative space. And here's the challenge: in the political sense, the Congressman talked about on the federal side, but on the state and local side, you run the race that you know. And for over 10 to 20 years, we've had that flat to low load growth, so your policies were centered around dealing with that. Now your policies have to change. The markets in which we operate — PJM, the largest regional transmission organization, 13 states, 65 million customers — all of the utilities are deregulated, meaning that we don't own generation. So now you're in a time of load growth. You're trying to meet this demand. I'm responsible for delivering your electricity through transmission, distribution, and I have none of the supply stack. So that's why within the PJM marketplace, costs are higher than anywhere else in the country, because the regulators haven't adjusted accordingly to respond to this new era of demand. We're still playing by the old rules to meet a new game. That is the challenge.
Thank you for that. So I just want to mention for those listening to us, also those in the room, you can pose questions to us through askac.org. And I think we're going to have a microphone in the room for questions later on, but I'll look around for a signal on that. The Congressman talked about this. We had an Atlantic Council AI commission that reported out a little while ago from our Atlantic Council technology programs, and the commissioners were really an impressive bunch, and together they represented close to a quarter of the US stock market. And what was really striking to me — we made some really fine recommendations, and I thought some of them were quite groundbreaking and interesting — but what was interesting is the commissioners worried most about public opinion toward AI, and that it was not being given high enough attention by public officials. And they gave some suggestions about how to address it. Part of this, in a competitive sense, is the Chinese aren't facing this, Singapore is not facing this, even Europe doesn't seem to be facing this level of backlash. How are you experiencing it and what do you do about it?
