HARRISBURG, Pa. — With utilities projecting that the demand for electricity may increase two to threefold in the coming years to support extensive data center operations catering to a burgeoning AI economy, significant concerns are emerging.
Lawmakers, regulators, and policymakers are questioning the trustworthiness of these utility forecasts. A significant issue is whether these predictions stem from potentially unviable data center projects, leading to fears that ordinary ratepayers might ultimately shoulder billions in unnecessary costs for power plants and infrastructure.
Concerns arise as analysts warn of a looming bubble in AI investments that could heavily influence stock prices.
In the meanwhile, consumer advocates highlight that ratepayers in regions like the mid-Atlantic grid, which includes parts of 13 states from New Jersey to Illinois, are already funding power solutions for both operational and proposed data centers.
Joe Bowring, head of the independent market watchdog in the mid-Atlantic region, revealed that speculations cloud the accuracy of forecasts: Nobody really knows... what’s speculative, what’s double-counting, what’s real, what’s not.
Utilities currently lack standardized methods to assess massive projects, propelling discussions on necessary solutions.
Uncertainties often stem from developers seeking grid connections without firm plans or adequate backing, which can mislead utilities into serious overestimation.
Adding to this complication, developers frequently submit connection requests to multiple utilities, not disclosing if they’ve made similar requests elsewhere. This can result in inflated energy forecasts.
Efforts to enhance forecasting were catalyzed recently when a Federal Energy Regulatory Commission member urged grid operators across the nation to clarify project viability standards.
Furthermore, the Data Center Coalition advocates the need for more detailed information from utilities regarding their forecasts to assist in better decision-making processes.
Amid these discussions, state lawmakers are also exploring legislative measures to improve transparency in utility forecasting.
For example, in Texas, findings from the Electric Reliability Council highlighted rising demand projections that raised safety concerns among lawmakers, prompting legislative action for clearer vetting of data center plans.
As utility PPL Electric anticipates that data centers will triple its peak demand by 2030, the urgency of accurate forecasting grows palpable.
With rising utility bills being attributed to escalating demand from data centers, local politicians like Rep. Danilo Burgos are advocating for further scrutiny on utility practices to protect consumers.
