Future Data Centers Drive Energy Demand: States Seek Proof of Construction

The growing energy demands driven by future data centers are causing alarm among lawmakers and regulators across the United States. According to The Seattle Times, utilities predict they will need two to three times more electricity in just a few years to power massive new data centers that are feeding a rapidly expanding artificial intelligence economy.

However, there are concerns about whether these forecasts can be trusted, as many projects may not come to fruition. Joe Bowring, head of Monitoring Analytics, highlighted the uncertainty surrounding these forecasts, citing a lack of clarity about what is speculative versus what is real.

This situation is compounded by developers who may not fully disclose their electricity requests across different utility territories, leading to inflated energy forecasts for multiple utilities. This issue is particularly acute in the mid-Atlantic region and Texas, where lawmakers are addressing the implications of rising energy demands on regular ratepayers.

The Texas legislature has responded by requiring data center developers to disclose whether they have electricity requests elsewhere and to prove substantial financial commitments for their projects. In Pennsylvania, PPL Electric Utilities anticipates that data centers will triple its peak electricity demand by 2030, prompting state lawmakers to introduce legislation to strengthen regulatory oversight of energy demand forecasts.

The Edison Electric Institute has welcomed efforts to improve forecasting practices, as better data can facilitate timely infrastructure development. Meanwhile, the Data Center Coalition, representing major tech companies like Google and Meta, urges regulators to seek more transparency in utility forecasts.

Igal Feibush, CEO of Pennsylvania Data Center Partners, noted that many proposed projects may not materialize, creating a ‘fire drill’ for utilities as they attempt to manage incoming requests. The rising demand is already hitting consumers, as seen in Philadelphia, where utility customers are facing increased electricity bills attributed to data center demand.

Representative Danilo Burgos has expressed the need for enhanced protections for ratepayers, emphasizing that utility companies should not prioritize profits over consumer welfare.