Since late 2022, U.S. regulators and utilities have warned that AI-optimized data centers could reshape national power demand, ending an era of flat electricity consumption and forcing 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. Data centers accounted for $6.5 billion—or 40%—of the auction's $16.4 billion in costs.
U.S. data center electricity consumption is projected to grow from 183 terawatt-hours in 2024 to over 400 TWh by 2030. The International Energy Agency estimates data centers 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 6.6 gigawatts of nuclear capacity by 2035, making it one of the largest corporate nuclear buyers in American history. In December 2025, NextEra Energy and Google Cloud announced a partnership to co-develop multiple gigawatt-scale data center campuses, exemplifying the emerging model of bundled infrastructure and power. Yet this buildout faces mounting resistance. Over 230 environmental groups demanded a nationwide moratorium in December 2025, citing fossil fuel dependence, rising consumer bills, and water strain; cities and towns in at least 14 states enacted local moratoria. Both Senator Bernie Sanders and Florida Governor Ron DeSantis called for restrictions on data center construction. Meanwhile, the Federal Energy Regulatory Commission ordered PJM in December 2025 to create transparent co-location rules by early 2026. 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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20 events
Latest: January 26th, 2026 · 4 months ago
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January 2026
El Paso Electric seeks approval for $473M gas plant to power Meta data center
LatestInfrastructure
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.
December 2025
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.
September 2025
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.
August 2025
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.
April 2025
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.
February 2025
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.
January 2025
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.
October 2024
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.
September 2024
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.
December 2023
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.
December 2022
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.
November 2022
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.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
1 of 3
2021–2024
Cryptomining Moratoria and Grid Pushback in New York
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.
Then
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.
Now
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 this matters now
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.
2 of 3
2000–2001
The California Electricity Crisis and Silicon Valley Power Cuts
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.
Then
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.
Now
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 this matters now
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.
3 of 3
1940s–1970s
Mid‑Century Aluminum Smelters and the Hydropower Buildout
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.
Then
The hydropower–aluminum bargain accelerated regional industrialization, supported war production, and enabled low retail rates for households across the Northwest and TVA regions.
Now
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 this matters now
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.
