U.S. utilities are facing an unprecedented power crisis as Big Tech’s AI-driven data center boom threatens to overwhelm regional grids, forcing companies to double spending plans while risking blackouts or costly overbuilding.
A Reuters analysis of 13 major utility earnings calls reveals nearly half have received data center power requests exceeding their total peak capacity—demands so large they could outstrip entire state grids. Examples include:
Oncor (Texas): 119 GW in requests (4x its current peak load).
PPL (Pennsylvania): 50 GW in proposals (vs. 7.2 GW capacity).
Evergy (Kansas/Missouri): Pipeline doubled to 11 GW—surpassing 2025’s forecasted max demand.
The Dilemma:
Underestimate? Risk grid instability and blackouts.
Overbuild? Consumers foot the bill for stranded assets.
“It’s a guessing game,” said Jon Gordon (Advanced Energy United), citing opaque bidding wars where tech firms solicit multiple utilities for the same project.
Hidden Risks:
Project Abandonment: Rising costs (now ~$12M per megawatt) and Trump’s steel tariffs could kill deals.
AI Efficiency Shifts: New models like DeepSeek may slash power needs, leaving utilities with excess capacity.
Microsoft’s Pullback: Reports suggest 2 GW of planned data centers were recently scrapped in the US and Europe.
States Scramble:
Pennsylvania is exploring a “clearinghouse” to track data center demand, while utilities like Oncor now demand cash collateral before approving projects.