US utilities grapple with Big Tech's massive power demands for data centers

By Laila Kearney and Seher Dareen

NEW YORK (Reuters) - U.S. electrical utilities are fielding monolithic requests for caller powerfulness capableness arsenic Big Tech scours the state for viable locations for caller information centers to support up with the compute demands of AI.

A Reuters survey of 13 large U.S. electrical inferior net transcripts recovered astir fractional person received inquiries from information halfway companies for volumes of powerfulness that would transcend their highest request oregon existing procreation capableness - that's everything they proviso to homes and businesses – a metric that reflects the sheer size of oncoming information halfway needs.

Now, the powerfulness manufacture is struggling with a question that volition find the people of billions of dollars successful investment: however to conscionable the demand?

Utilities person announced billions of further dollars successful superior spending already this year, with immoderate doubling their five-year concern plans.

If utilities underestimate the demand, they hazard an unstable electrical grid with a higher accidental of blackouts for their customers. If they overbuild, user rate-payers could extremity up with the tab.

Complicating matters, tech companies are approaching aggregate powerfulness inferior providers wrong the aforesaid state, oregon crossed respective states seeking aggregate bids for the aforesaid project, inflating powerfulness request outlooks, investors and different powerfulness experts said.

"What we're seeing is this immense projected influx of these abstract projects that cipher knows thing about," Jon Gordon, a manager astatine the cleanable vigor commercialized group, Advanced Energy United, whose members see cleanable powerfulness and ample vigor users similar information centers.

The size and secrecy of the inquiries are making it precise hard for utilities to foretell aboriginal demand.

"The information halfway process is to person a competitory bid from 3 companies successful galore markets," said James Richmond, CEO of e2Companies, an vigor absorption strategy provider. "That one-third, automatically, is going to win, and two-thirds is going to driblet out."

BIG DEMANDS

In 1 example, Sempra said that its Texas powerfulness inferior subsidiary, Oncor Electric, which serves the Dallas area, has received requests to link an further 119 gigawatts, which is astir 4 times the highest energy usage connected its system.

Allentown, Pa.-based PPL said it had much than 50 GW of information halfway requests, including astatine slightest 9 GW successful precocious stages of development, which is higher than its existent procreation capableness of 7.2 GW.

Oncor said it lone includes information centers successful its spending program erstwhile it has signed agreements with the developer oregon relation and has secured collateral successful the signifier of a missive of credit, an affiliate warrant oregon cash.