Since late 2022, U.S. regulators and utilities have warned that a new class of digital infrastructure—AI-optimized data centers—could reshape national power demand, ending an era of flat electricity consumption and forcing a rapid buildout of generation and transmission. By early 2026, those warnings have crystallized into concrete challenges: PJM Interconnection's December 2025 capacity auction hit the $333.44/MW-day price cap and failed to meet reliability requirements for the first time in its history, with data centers accounting for $6.5 billion—or 40%—of the auction's $16.4 billion in costs. Regional grid operators now project U.S. data center electricity consumption will grow from 183 terawatt-hours (TWh) in 2024 to over 400 TWh by 2030, while the International Energy Agency (IEA) estimates data centres globally could more than double their electricity use to approximately 945 TWh in the same timeframe, with AI-optimized servers as the main driver.
In response, hyperscale technology companies have moved aggressively to secure dedicated power supplies through unprecedented long-term contracts. In January 2026, Meta announced agreements with Vistra, TerraPower, and Oklo to procure up to 6.6 gigawatts of nuclear capacity by 2035—making it one of the largest corporate nuclear buyers in American history—while NextEra Energy and Google Cloud's December 2025 partnership to co-develop multiple gigawatt-scale data center campuses exemplifies the emerging model of bundled infrastructure and generation. Yet this buildout faces mounting resistance: over 230 environmental groups demanded a nationwide data center moratorium in December 2025, citing fossil fuel dependence, rising consumer bills, and water strain; cities and towns in at least 14 states have enacted local moratoria; and in an unusual bipartisan convergence, both Senator Bernie Sanders and Florida Governor Ron DeSantis called for restrictions on data center construction. Meanwhile, the Federal Energy Regulatory Commission (FERC) ordered PJM in December 2025 to create transparent co-location rules by early 2026, and grid watchdogs warn that without careful integration, concentrated AI loads could trigger reliability crises reminiscent of California's 2000–2001 blackouts.
U.S. data centers consumed 183 TWh (4.4% of total electricity) in 2024 and are projected to reach 426 TWh by 2030, a 133% increase driven primarily by AI workloads.
945 TWh
Global data center electricity use in 2030 (IEA base case)
IEA's Energy and AI report projects data centre electricity consumption more than doubling from about 415 TWh in 2024 to ~945 TWh in 2030, with AI-optimized servers as the main driver.
December 2025 auction hit the price cap across the entire PJM region for the first time, failing to procure sufficient capacity to meet reliability requirements as data center demand far outstripped new supply.
$6.5B (40%)
Data center share of PJM capacity costs
Data centers accounted for $6.5 billion, or 40%, of the $16.4 billion in costs from PJM's December 2025 capacity auction; across the last three auctions, they comprised 45% of $47.2B in total costs.
6.6 GW
Meta nuclear capacity agreements (by 2035)
In January 2026, Meta announced deals with Vistra, TerraPower, and Oklo to procure up to 6.6 GW of nuclear power by 2035, making it one of the largest corporate nuclear buyers in U.S. history.
U.S. residential electricity prices are forecast to rise 4% in 2026 after a 5% increase in 2025, with some markets facing potential increases exceeding 25% by 2030 due to data center and crypto mining demand.
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People Involved
John W. Ketchum
Chairman, President and CEO, NextEra Energy, Inc. (Leading utility-side buildout of AI-era data center power and nuclear extensions)
Thomas Kurian
CEO, Google Cloud (Orchestrating hyperscale AI infrastructure growth dependent on new clean and firm power)
Urvi Parekh
Head of Global Energy, Meta Platforms (Leading Meta's expansion to 6.6 GW nuclear capacity and navigating fossil fuel controversies in Texas)
Aftab Khan
Executive Vice President, Operations, Planning & Security, PJM Interconnection (Warning that exponential data center development could outpace available capacity)
Fatih Birol
Executive Director, International Energy Agency (IEA) (Framing AI and data centres as a top-tier driver of global electricity demand)
Tate Reeves
Governor of Mississippi (Attracted largest private investment in state history with xAI's $20B data center)
Bernie Sanders
U.S. Senator (I-VT), Chair of Senate Health, Education, Labor and Pensions Committee (First federal legislator to call for national data center moratorium)
Ron DeSantis
Governor of Florida (Proposed AI bill of rights to protect communities from data center impacts)
Organizations Involved
NE
NextEra Energy, Inc.
Energy Company
Status: Largest U.S. utility and major energy infrastructure developer serving AI data center loads
NextEra Energy is a Fortune 200 energy company headquartered in Juno Beach, Florida, and the world’s largest electric utility holding company by market capitalization, with a diverse portfolio spanning renewables, natural gas and nuclear.
GO
Google Cloud (Alphabet Inc.)
Cloud Computing and AI Platform
Status: Hyperscale cloud and AI platform driving new data center clusters and clean energy procurement
Google Cloud is Alphabet’s enterprise cloud and AI division, operating a global network of data centers and providing infrastructure, platform and AI services to businesses and governments.
ME
Meta Platforms
Public Technology Company
Status: Became one of largest corporate nuclear buyers in U.S. history while facing criticism for gas plant in Texas
Meta is a U.S.-based technology conglomerate that operates Facebook, Instagram, WhatsApp and other platforms, and runs a large global network of data centers increasingly dedicated to AI workloads.
PJ
PJM Interconnection LLC
Regional Transmission Organization
Status: Facing unprecedented capacity shortfall and reliability crisis driven by data center demand
PJM is the regional transmission organization coordinating wholesale electricity markets and grid operations for all or parts of 13 U.S. states and D.C., serving about 65 million people and operating 185 GW of generating capacity.
WP
WPPI Energy
Not-for-profit Power Company
Status: Securing multi-decade nuclear supply from Point Beach to meet regional load growth
WPPI Energy is a member-owned, not-for-profit power company serving 51 locally owned utilities across Wisconsin, Iowa and Michigan.
IN
International Energy Agency (IEA)
Intergovernmental Organization
Status: Providing global baseline projections for AI- and data center-driven electricity demand
The IEA is an autonomous intergovernmental organization that produces analysis and policy advice on global energy markets, now including AI and data centres.
VI
Vistra Corp.
Electric Utility and Power Generator
Status: Secured 2.1 GW nuclear supply agreement with Meta, largest single deal in January 2026
Vistra is a Fortune 500 integrated power company and the largest competitive power generator in the U.S., operating a diverse portfolio including nuclear, natural gas, coal, solar, and battery storage facilities.
TE
TerraPower
Nuclear Technology Company
Status: Signed multi-project nuclear agreement with Meta for projects starting 2032
TerraPower is an advanced nuclear innovation company founded by Bill Gates, developing next-generation nuclear reactors including the Natrium reactor design featuring molten salt energy storage.
OK
Oklo Inc.
Advanced Nuclear Technology Company
Status: Developing 1.2 GW nuclear campus for Meta in Pike County, Ohio
Oklo is a fast fission advanced nuclear technology company developing compact, factory-manufactured reactors designed to provide clean, reliable, and affordable energy.
XA
xAI
Artificial Intelligence Company
Status: Building $20 billion, 2-gigawatt data center campus in Mississippi
xAI is an artificial intelligence company founded by Elon Musk in 2023 to develop advanced AI systems with a focus on understanding the universe.
EL
El Paso Electric Company
Electric Utility
Status: Seeking regulatory approval for $473M gas plant to power Meta data center
El Paso Electric is an electric utility serving approximately 460,000 customers in west Texas and southern New Mexico.
Timeline
El Paso Electric seeks approval for $473M gas plant to power Meta data center
Infrastructure
El Paso Electric filed with Texas regulators for a 366 MW natural gas plant (McCloud facility) to supply Meta's $1.5B, 1-gigawatt El Paso data center, sparking local opposition over fossil fuel dependence, air pollution, and potential rate increases instead of renewables.
PJM Board outlines plan to integrate large data center loads while preserving reliability
Regulatory
PJM Board of Managers announced actions to address integrating new data centers and large loads onto the grid, warning that starting summer 2026 PJM will have just enough capacity and may fall below reliability standards by June 2027 without changes. The plan emphasizes new fast-deploying generation coupled with curtailable load options.
Meta announces 6.6 GW nuclear deals with Vistra, TerraPower, and Oklo
Corporate Deal
Meta signed agreements with three nuclear providers to procure up to 6.6 GW of capacity by 2035: 2.1 GW from Vistra's Ohio and Pennsylvania plants, 1.2 GW from Oklo's Pike County, Ohio campus (as early as 2030), and projects with TerraPower starting in 2032. The nuclear power will supply Meta's Prometheus AI supercluster in New Albany, Ohio.
xAI announces $20 billion Mississippi data center investment
Corporate Deal
Elon Musk's xAI committed over $20 billion to build a 2-gigawatt data center campus in Southaven, Mississippi, called MACROHARDRR, described as the state's largest private investment ever. Operations are expected to begin in February 2026, with the facility housing what xAI calls 'the world's largest supercomputer.'
Sanders and DeSantis voice bipartisan opposition to data center boom
Political
In an unusual alignment across the political spectrum, Senator Bernie Sanders called for a national moratorium on data center construction until 'democracy catches up with technology,' while Florida Gov. Ron DeSantis unveiled an AI bill of rights to protect local communities' right to block data centers, both citing grid capacity limits and rising electricity costs.
FERC orders PJM to create transparent co-location rules for data centers by January 2026
Regulatory
FERC directed PJM to file tariff revisions enabling co-located data centers at power plants, with compliance reports due January 19-20, 2026 and new transmission services by February 16, 2026. The order aims to balance facilitating AI infrastructure with protecting grid reliability and consumer costs after finding PJM's tariff lacked clarity on co-location terms.
PJM capacity auction hits price cap, fails reliability target as data centers drive 40% of costs
Market Event
PJM's 2027/28 Base Residual Auction cleared at $333.44/MW-day price cap and failed to procure sufficient capacity to meet reliability requirements—a first for the entire RTO. Data centers accounted for $6.5B (40%) of the $16.4B auction cost, with nearly 5,100 MW of the 5,250 MW load increase attributable to data center demand.
NextEra and Google Cloud expand partnership for gigawatt-scale data center campuses
Corporate Deal
NextEra Energy and Google Cloud announce a major expansion of their long-standing collaboration: they will jointly develop multiple new gigawatt-scale data center campuses across the U.S., each paired with new generation and grid capacity, and release an AI-driven product by mid‑2026 to predict equipment failures and improve grid reliability. NextEra simultaneously reveals that it has reached roughly 2.5 GW of clean-energy contracts with Meta and extended nuclear supply to WPPI Energy into the 2050s, and raises its 2025–26 earnings guidance on the back of data center demand.
Environmental groups call for national moratorium on new U.S. data centers
Advocacy
Over 230 environmental organizations, including Greenpeace and Friends of the Earth, demand a nationwide moratorium on new data centers, citing their heavy electricity and water use, contributions to climate change, and impacts on consumer bills. They note that local opposition has already stalled or canceled an estimated $64 billion in projects, and that data centres could add 44 million tons of CO₂ emissions by 2030, even as AI companies argue they are decarbonizing supply.
Pennsylvania emerges as a major gas- and nuclear-adjacent data center hub
Infrastructure
Reporting highlights that Pennsylvania added about 2.4 GW of data center capacity from March 2024 to March 2025, leveraging abundant natural gas and proximity to nuclear plants. Amazon alone plans a $20 billion investment in two campuses, including one next to a nuclear station, while PJM’s role as the largest grid operator makes the state central to AI-era power planning.
Point Beach nuclear license extended into the 2050s, enabling new long-term contracts
Regulatory
The NRC approves subsequent license renewal for NextEra’s Point Beach Nuclear Plant, allowing its units to operate through 2050 and 2053. The decision supports new long-term contracts such as WPPI Energy’s agreement to continue taking 168 MW into the 2050s, partly to serve growing regional loads.
EIA forecasts double-digit retail load growth in ERCOT and strong growth in PJM from data centers
Forecast
The U.S. EIA’s Short-Term Energy Outlook projects retail electricity sales in ERCOT growing at an average 11% in 2025–26 and PJM by 4%, compared with 2.2% nationwide. Analysts attribute much of this growth to a wave of new data centres, particularly AI-focused facilities.
IEA’s "Energy and AI" report projects data centre demand will more than double by 2030
Report
The IEA publishes its Energy and AI special report, estimating that global data centre electricity use will rise from about 415 TWh in 2024 to around 945 TWh in 2030, with AI as the largest driver. It warns that in the U.S., data centres could account for nearly half of demand growth this decade, demanding massive investment in grids and generation.
Corporate clean energy procurement hits record 68 GW, led by data centers
Analysis
S&P Global Commodity Insights reports that corporations contracted a record 68 GW of clean energy in 2024, a 29% annual increase, with data centers leading procurement at over 17 GW. Microsoft, Amazon, Google and Meta top the list of buyers, underscoring how hyperscalers are reshaping power markets.
PJM 2025 Long-Term Load Forecast warns of capacity shortfall amid exponential data center growth
Forecast
PJM’s 2025 forecast extends its horizon to 20 years, projecting summer peaks rising about 70 GW to 220,000 MW and winter peaks reaching ~210,000 MW by 2039. The operator explicitly cites exponential data center growth, building and vehicle electrification, and new manufacturing as core drivers, and warns of potential capacity shortages as early as the 2026/27 delivery year.
Amazon announces SMR and nuclear agreements to power future data centers
Corporate Deal
Amazon reveals three agreements to support development of nuclear energy projects, including advanced small modular reactors in Washington state, a potential SMR near Dominion’s North Anna plant in Virginia, and a data center co-located with a Pennsylvania nuclear facility, signaling tech’s growing role in underwriting firm carbon-free power.
Microsoft signs 20-year PPA to revive Three Mile Island Unit 1 for AI data centers
Corporate Deal
Constellation Energy and Microsoft agree to a 20-year power purchase agreement taking 100% of output from a revived ~835–837 MW Three Mile Island nuclear unit starting in 2028, with power matched to Microsoft’s AI data center loads across several PJM states. The deal becomes a flagship example of tech-driven nuclear restarts.
Grid Strategies’ "The Era of Flat Power Demand is Over" highlights surging load forecasts
Analysis
Consultancy Grid Strategies releases a widely cited report showing that U.S. utility load forecasts, after decades of flat expectations, have turned sharply upward due to data centers, manufacturing and electrification, marking a conceptual shift in how planners view future demand.
PJM’s 2023 Load Forecast flags data centers as a major new driver of demand
Forecast
PJM publishes its 2023 Long-Term Load Forecast, using improved modeling to project higher growth rates and explicitly citing rising energy demand from data centers—mostly in Virginia and Maryland—as a chief factor behind increased load expectations.
New York enacts first-in-the-nation moratorium on certain fossil-fueled cryptomining
Policy
New York Gov. Kathy Hochul signs a two-year moratorium on new or renewed permits for proof-of-work cryptocurrency mining operations at fossil-fueled power plants. The law reflects early concern that energy-intensive digital loads can undermine climate goals and strain local grids, foreshadowing similar debates now emerging around AI data centers.
Scenarios
1
Coordinated AI–Energy Buildout: Data Center Boom Continues, Grid Holds
Discussed by: IEA, Grid Strategies, S&P Global, industry analysts and participating utilities
In this scenario, Big Tech, utilities and regulators roughly keep pace with AI-driven load growth. Multi-gigawatt utility–cloud partnerships like NextEra–Google become standard, bundling data center campuses with on-site or contracted renewables, nuclear and gas, plus major transmission upgrades. IEA’s projections of data centre demand more than doubling by 2030 prove accurate but not catastrophic, because U.S. regions invest heavily in new capacity and grid reinforcements, and AI-based tools improve forecasting and outage prevention. Corporate clean-energy procurement continues to grow, maintaining pressure for low-carbon supply. Electricity prices rise but remain politically manageable, and outright moratoria on AI data centers remain limited or temporary.
2
Grid Bottlenecks and Local Backlash: AI Data Center Expansion Slows
Discussed by: Environmental groups, local governments in Virginia and Pennsylvania, investigative and climate-focused media
Here, local grid and land-use constraints, combined with rising retail bills, lead to growing resistance against large data center projects. The wave of opposition seen in Virginia, New Jersey, Georgia and Pennsylvania spreads, and the sort of moratorium environmental groups are now demanding gains traction at state or regional levels. Grid operators like PJM and ERCOT become more selective about interconnecting large loads, potentially deferring or denying some projects. Watchdogs’ complaints that data center approvals threaten reliability prompt FERC or state commissions to impose stricter criteria, slowing the pipeline and driving some AI investments overseas or into regions with more accommodating policies and excess power (for example, certain hydropower-heavy regions).
3
Reliability Crisis Trigger: Major Outage Linked to Data Center Clusters
Discussed by: NERC reliability reports, some grid planners, critical trade press and policy think tanks
In a more adverse outcome, a major region experiences a widespread blackout or near-miss event that investigators tie partly to the sudden disconnection or tripping of large data center loads, akin to the 1,500 MW load loss in a 2024 incident cited by NERC. Under stress from extreme weather and insufficient firm capacity, grid operators find that the concentration of AI data centers amplifies disturbances. The episode triggers emergency reliability standards: stricter ride-through and backup requirements for data centers, mandatory demand-response participation, and maybe hard caps on large-load interconnections in constrained zones. Project timelines stretch, and financing costs rise as investors reassess risk.
4
Nuclear and Firm Clean Power Renaissance Driven by AI
Discussed by: Corporate energy teams at Microsoft, Amazon, Meta, nuclear industry groups, some policymakers
In this path, AI data centers become the political and financial engine for a large-scale revival of nuclear and other firm clean power (advanced geothermal, long-duration storage). Deals like Microsoft’s Three Mile Island PPA, Meta’s Clinton contract, Amazon’s SMR agreements and NextEra’s nuclear license renewals proliferate, giving developers long-term revenue certainty. SMRs begin to come online in the early 2030s, often sited near data center clusters, and dormant or at-risk reactors are restarted with tech-company backing. Emissions impacts of AI are effectively offset, but public debate over nuclear waste, safety, and cost intensifies, and environmental groups fracture between those prioritizing climate goals and those opposing nuclear expansion.
5
Efficiency and Flexibility Tame the Beast: AI Demand Grows, Peaks Stabilize
Discussed by: Some IEA scenarios, chipmakers, hardware and software efficiency researchers
In a more optimistic scenario, rapid improvements in AI hardware efficiency, model architectures and workload scheduling drastically reduce per-inference and per-training energy costs. Coupled with more sophisticated demand response—data centers shifting non-urgent compute to times and locations with surplus renewable generation—the share of data centres in peak demand stabilizes even as total computing grows. IEA’s “High Efficiency” and similar scenarios materialize, limiting data centre demand’s share of global electricity to around 3–4% and easing grid-strain fears, though not eliminating local hotspot issues.
6
Bipartisan Data Center Restrictions: Federal or State Moratoria Enacted
Discussed by: Environmental coalition of 230+ groups, Senator Bernie Sanders, Governor Ron DeSantis, local governments in 14 states
The unusual political alignment between progressive Senator Bernie Sanders calling for a national moratorium and conservative Governor Ron DeSantis proposing an AI bill of rights signals growing electoral pressure on data centers. If residential electricity bills continue rising 4-5% annually and grid reliability incidents occur, Congress or multiple state legislatures could impose temporary construction freezes or strict siting requirements—similar to New York's 2022 cryptocurrency mining moratorium—forcing hyperscalers to slow U.S. expansion, shift investments overseas, or accept significantly higher regulatory and community engagement costs.
7
PJM Reliability Crisis: Blackouts or Near-Miss Events Trigger Emergency Rules
PJM's December 2025 capacity auction failed to meet reliability requirements for the first time, with the grid operator warning it will have 'just enough' capacity in summer 2026 and may fall below standards by June 2027. If extreme weather, generator outages, or sudden data center load swings cause a major blackout or near-miss in PJM's 13-state territory—home to 67 million people and concentrated data center clusters in Virginia, Pennsylvania, and Ohio—FERC and state regulators would likely impose emergency measures: mandatory demand response for large loads, stricter interconnection criteria, accelerated generation requirements, and potentially hard caps on new data center approvals in constrained zones until transmission upgrades are complete.
8
Nuclear Renaissance Accelerates but Faces Renewed Opposition
Discussed by: Meta, Amazon, Google, Microsoft, Constellation, Vistra, TerraPower, Oklo, nuclear industry groups, some environmental organizations
Meta's 6.6 GW nuclear deals in January 2026, following Microsoft's Three Mile Island PPA and Amazon's Susquehanna arrangements, establish tech companies as the primary financial drivers of U.S. nuclear expansion and life extension. If these contracts prove economically successful and the first small modular reactors (SMRs) from TerraPower and Oklo come online in the early 2030s as planned, a wave of additional nuclear projects could follow, with hyperscalers underwriting both restarts of dormant plants and new-build advanced reactors. However, this trajectory would likely intensify debates over nuclear waste, safety, environmental justice (as seen with NAACP concerns over Memphis facilities), and whether public resources should support private AI infrastructure, potentially fracturing environmental coalitions between climate-focused and anti-nuclear advocates.
9
Fossil Fuel Lock-In: Gas Plants Proliferate to Meet AI Demand Despite Clean Energy Commitments
Discussed by: Environmental groups, local advocates in El Paso and other regions, climate analysts, some state regulators
El Paso Electric's January 2026 proposal for a $473 million, 366 MW natural gas plant to power Meta's Texas data center—despite Meta's public commitments to clean energy—illustrates a potential pattern where utilities turn to dispatchable fossil generation to meet data center timelines and reliability requirements that renewables alone cannot satisfy in the near term. If this becomes widespread, with natural gas plants built across Texas, the Southeast, and other growth regions to backstop AI loads, the U.S. could lock in decades of additional fossil fuel infrastructure and emissions, undermining corporate net-zero pledges and complicating state and federal climate targets, even as companies simultaneously sign renewable and nuclear PPAs.
Historical Context
Cryptomining Moratoria and Grid Pushback in New York
2021–2024
What Happened
Amid a boom in energy-intensive bitcoin mining, New York legislators passed Assembly Bill A7389B and Gov. Kathy Hochul signed a 2022 law imposing a two-year moratorium on new or renewed air permits for proof-of-work cryptomining at fossil-fueled power plants. The law required a statewide environmental impact study of cryptomining’s emissions and grid impacts. Other states and federal agencies also began scrutinizing mining’s electricity use, with DOE attempting an emergency survey and environmental groups urging stricter controls.
Outcome
Short Term
Several fossil-fueled mining projects were effectively frozen, investors shifted some operations to other states, and New York became a test case for using moratoria to manage high-energy digital industries.
Long Term
The experience created a policy template—temporary moratoria plus impact studies—that environmental advocates now propose applying to AI data centres, and it showed that local resistance can meaningfully redirect digital infrastructure siting.
Why It's Relevant Today
The cryptomining precedent demonstrates that U.S. policymakers are willing to pause digital infrastructure when they judge its energy use incompatible with climate and grid goals. Current calls for a nationwide AI data center moratorium echo this approach, suggesting that similar tools could be used if AI-driven power demand triggers political or reliability crises.
The California Electricity Crisis and Silicon Valley Power Cuts
2000–2001
What Happened
California’s partial deregulation of electricity markets in the late 1990s, combined with tight supply and market manipulation, led to soaring wholesale prices and rolling blackouts in 2000–2001. Silicon Valley, then in the midst of the dot‑com boom, experienced costly outages that forced companies like Apple, AMD and Oracle to temporarily shut down operations or invest in backup systems. The crisis exposed the vulnerability of high-tech industries to grid instability and underinvestment in generation and transmission.
Outcome
Short Term
Blackouts, bankruptcies (notably PG&E), emergency state interventions, and reputational damage to deregulation led to higher retail prices and a wave of investments in generation and reliability.
Long Term
California tightened oversight, diversified supply, and aggressively pursued efficiency and renewables, while tech companies increasingly invested in onsite backup and, later, long-term PPAs to hedge grid risk.
Why It's Relevant Today
The California crisis shows how concentrated high-tech loads in regions with stressed power systems can amplify the economic cost of reliability failures. As AI data centers cluster in PJM, ERCOT and other regions already facing weather and capacity stress, the California experience warns that market design, reserve margins and transmission planning must anticipate these new loads to avoid similar crises.
Mid‑Century Aluminum Smelters and the Hydropower Buildout
1940s–1970s
What Happened
During and after World War II, the aluminum industry—highly electricity-intensive—clustered around new federal hydropower projects in the Pacific Northwest and Tennessee Valley. Agencies like Bonneville Power Administration (BPA) and TVA built dams and transmission partly to serve smelters whose loads matched that of mid-sized cities. At one point, about 40% of U.S. aluminum smelting capacity and a large share of BPA’s sales came from these plants, which received low-cost power in exchange for providing steady baseload demand and, at times, interruptible load.
Outcome
Short Term
The hydropower–aluminum bargain accelerated regional industrialization, supported war production, and enabled low retail rates for households across the Northwest and TVA regions.
Long Term
Over time, rising power prices, environmental constraints and global competition reduced smelter viability, leaving BPA and others to rebalance their portfolios. The episode showed both the benefits and risks of designing public power systems around a few large industrial customers.
Why It's Relevant Today
AI data centers play a role today similar to mid‑century aluminum smelters: large, often geographically concentrated loads that can justify major generation and transmission investments but also risk distorting power systems if policy and contracts are misaligned. The hydropower–aluminum history suggests that dedicating substantial public or quasi‑public infrastructure to single industries requires careful long-term planning, including exit options and protections for residential and small-business customers.
