Power Infrastructure Crisis: The 326 GW Challenge

The United States datacenter industry faces an unprecedented power infrastructure crisis. With over 326 GW in utility pipelines and 131.7 GW in documented projects, the demand for electricity to power AI and cloud computing infrastructure is straining the nation’s electrical grid to its breaking point.

Executive Summary

• Total Utility Pipeline: 326.5 GW of datacenter demand across major utilities
• Documented Projects: 131.7 GW across 325 projects with confirmed power capacity
• Gigawatt-Scale Projects: 46 projects of 1+ GW each, totaling 86.6 GW (65.8% of documented capacity)
• Natural Gas Dominance: 10 of 11 multi-gigawatt projects rely primarily on natural gas
• Interconnection Crisis: Oncor alone has 186 GW in interconnection requests (250% increase over 2023)
• Rate Structure Evolution: 14-20 year contracts with 85% minimum take-or-pay becoming standard

This represents the largest electricity infrastructure challenge in US history, comparable in scale to rural electrification or the interstate highway system.

The Scale of the Crisis

Total Demand

The datacenter power crisis encompasses multiple dimensions:

1. Utility Pipelines (326.5 GW): Utilities report this total in various stages from inquiry to contracted commitment
2. Documented Projects (131.7 GW): Projects with confirmed power capacity specifications
3. Interconnection Queues (400+ GW): Requests pending utility review and grid studies

The gap between these numbers reflects the reality that not all inquiries become projects, but the sheer volume overwhelms existing utility planning and infrastructure capacity.

Geographic Concentration

The crisis is most acute in specific regions that have become datacenter hotspots:

These top 10 regions account for 63.6 GW (48.3%) of all documented datacenter power capacity.

Utility Pipeline Analysis

The 326.5 GW utility pipeline represents contractual commitments and serious inquiries at various stages of development. This section examines the major utilities facing unprecedented demand.

Top 10 Utilities by Load Growth Pipeline

Oncor: The 186 GW Interconnection Queue

Oncor, the transmission and distribution utility serving Dallas-Fort Worth and West Texas, reports the most extreme interconnection queue crisis in the nation:

• 186 GW Total Pipeline: Includes all stages of interconnection requests
• 137 GW Interconnection Queue (December 2024): Formal interconnection requests pending review
• 30 GW High Confidence: Projects beyond signed agreements with strong likelihood of proceeding
• 9 GW Contracted: Signed interconnection agreements
• 250% Increase: Queue grew 250% from 2023 to 2024

Capital Response: Oncor announced a $36 billion capital plan (2025-2029) with potential for an additional$12 billion if high-confidence projects materialize. This represents the largest capital deployment in the company’s history, driven almost entirely by datacenter demand.

ERCOT Context: As part of the Electric Reliability Council of Texas (ERCOT) grid, Oncor must balance datacenter growth with residential and commercial demand in a competitive, deregulated market. The sheer scale of datacenter demand threatens grid stability during peak periods.

Dominion Energy: Virginia’s 40 GW Challenge

Dominion Energy Virginia serves the world’s largest datacenter market in Northern Virginia. The utility’s pipeline has grown explosively:

• 40 GW Pipeline (December 2024): Up from 21 GW in July 2024 (88% increase in 5 months)
• 26 GW in Substation Engineering: Most advanced stage of development
• 9 GW in Electrical Service Agreements: Formal contracts signed
• 5 GW in Construction Authorization: Projects proceeding to build
• 4 GW Already Connected: 94 datacenters connected since 2019

Infrastructure Response:

• $50.1 billion capital plan (2025-2029), 16$43.2 billion
• 33 GW of new generation and storage planned over 15 years
• 500 kV transmission loop construction in Eastern Loudoun County
• Small Modular Reactor (SMR) development partnership with Amazon at North Anna site

Ratepayer Impact: Datacenters now represent 24% of Dominion’s Virginia electricity sales. The utility has proposed a new rate class requiring:

• 14-year contracts for customers >25 MW
• 85% minimum demand charge for transmission/distribution
• 60% minimum demand charge for generation
• Customer funding for transmission and distribution infrastructure

Georgia Power: Tripling Demand by 2034

Georgia Power projects electricity demand will triple by 2034, driven almost entirely by datacenters:

• 36.5 GW Pipeline: Through mid-2030s
• 70 Datacenter Facilities: Commitments received from 70 facilities
• 1.4 GW Fossil Fuel Capacity Added: Already built to meet initial demand surge

100 Megawatt Rule: Georgia Public Service Commission approved new tariff (January 2025):

• Applies to customers >100 MW (datacenter threshold)
• 15-year contracts (increased from 5 years)
• Customers cover all transmission and distribution construction costs
• Minimum billing requirements ensure cost recovery
• Upstream generation, transmission, and distribution cost recovery

Major Projects:

• Amazon Web Services: $11 billion Georgia expansion (Butts County, Douglas County)
• Microsoft: Hundreds of acres purchased, estimated $1.8 billion campus
• Meta: Active datacenter campus

American Electric Power: 24 GW by 2030

AEP expects to add 24 GW of load by 2030, primarily from datacenters across its 11-state service territory:

• Major Projects:
  • Amazon Indiana: $11 billion datacenter complex (Northern Indiana)
  • Google Fort Wayne: $2 billion datacenter complex under construction

Regulatory Innovation:

• Ohio: Settlement agreement requiring datacenters >25 MW to pay 85% of expected monthly energy, demonstrate financial viability, and pay exit fees if projects are canceled (approved July 2025)
• Indiana: Large load interconnection rules agreed upon with Amazon, Google, Microsoft
• Fuel Cell Partnership: Agreement with Bloom Energy for up to 1 GW of solid oxide fuel cells to provide quick power while grid infrastructure is built

Power Sourcing Strategies

Datacenter operators and utilities are pursuing three primary strategies to secure power: grid-connected, on-site generation, and hybrid approaches. The choice depends on grid capacity, timeline urgency, regulatory environment, and sustainability commitments.

Strategy Distribution (Gigawatt Projects)

Analysis of the 11 multi-gigawatt projects (≥2.4 GW each) reveals the power sourcing landscape:

The dominance of on-site and hybrid strategies reflects the reality that existing grid infrastructure cannot support gigawatt-scale datacenter demand without years of transmission upgrades.

Natural Gas Dominance

10 of 11 multi-gigawatt projects (91%) rely on natural gas as their primary or initial power source:

Pennsylvania Projects (3 projects, 10.2 GW)

• Homer City Energy Campus (4.5 GW): Seven hydrogen-enabled gas turbines from GE Vernova, supplied by Marcellus Shale gas (up to 665,000 MMBTUs/day from EQT Corporation)
• TECfusions Keystone Connect (3.0 GW): On-site natural gas from Marcellus Shale, dual utility and microgrid capabilities
• Shippingport Power Station (2.7 GW): Conversion of former coal plant to natural gas, ~800M cubic feet/day from Marcellus and Utica shales

All three Pennsylvania gigawatt projects leverage the region’s abundant natural gas reserves from Marcellus and Utica shale formations. This represents:

• ~1.5 billion cubic feet of natural gas per day combined
• Behind-the-meter power avoiding transmission constraints
• Grid export capability (Shippingport will contribute 1+ GW back to PJM grid)

Utah Projects (2 projects, 8.0 GW)

• Joule Capital Partners - Millard County (4.0 GW): Fleet of Caterpillar G3520K generator sets with combined cooling, heat and power (CHP/CCHP), independent microgrid, 1.1 GWh battery storage
• Delta Gigasite / Fibernet MercuryDelta (4.0 GW): Hybrid approach utilizing Intermountain Power Project (IPP) infrastructure transitioning from coal to gas/hydrogen, plus on-site solar and 500 MW battery storage

West Virginia Projects (2 projects, 4.8 GW)

• Adams Fork Energy - Wharncliffe Site (2.4 GW): Off-grid microgrid co-located with world’s largest ammonia plant (2.16M metric tons/year), >99% CO2 capture
• Adams Fork Energy - Harless Industrial Park (2.4 GW): Off-grid microgrid co-located with ammonia production, >99% CO2 capture

Both West Virginia projects combine datacenter power with clean ammonia production, capturing CO2 emissions for ammonia synthesis. This represents a novel approach to carbon management.

Other Natural Gas Projects

• Cloverleaf Infrastructure - Wisconsin (3.5 GW): Hybrid with We Energies grid, $2 billion in natural gas generation and storage planned, partnership with Microsoft ensures infrastructure costs not subsidized by residential customers
• Vermaland La Osa - Arizona (3.0 GW): Gas-fired power plant for early phases, transitioning to 2 GW solar as primary source with battery storage

The One Renewable Exception

Data City Texas (5.0 GW) is the only multi-gigawatt project planned for 100% renewable energy from inception:

• Location: Laredo, Texas (50,000 acres)
• Strategy: Behind-the-meter, independent from ERCOT grid
• Power Sources:
  • Natural gas (initial, from Texas production)
  • Solar (significant capacity)
  • Wind (significant capacity)
  • Battery storage
  • Green hydrogen (future transition, 280,000 tons/year from adjacent Hydrogen City facility with 2 TWh salt dome storage)
• Target: 100% 24/7 green energy, transitioning from natural gas to green hydrogen

This project represents the most ambitious renewable energy strategy for gigawatt-scale datacenters, but relies on future hydrogen infrastructure that doesn’t yet exist at commercial scale.

Grid-Connected Strategy

Prince William Digital Gateway (3.0 GW) is the only pure grid-connected gigawatt project:

• Location: Gainesville, Virginia (Northern Virginia, 2,100 acres)
• Developers: QTS Data Centers (1.0 GW), Compass Datacenters (1.7 GW)
• Utility: Dominion Energy Virginia
• Challenge: Requires extensive new transmission lines, substations, and generation capacity
• Cost: $40 billion total investment over 20-year buildout
• Controversy: Power requirement equals 750,000 homes (5x Prince William County households), costs supported by all utility customers
• Requirement: Minimum 10% renewable energy commitment for occupants

This project exemplifies the challenges of grid-connected gigawatt datacenters:

• Long timelines (20 year buildout)
• Massive utility infrastructure investment
• Ratepayer cost allocation concerns
• Political and community opposition

Rate Structure Evolution

Utilities are fundamentally restructuring their rate designs to address the unprecedented scale and risk profile of datacenter customers. Traditional utility rate structures were designed for diversified customer bases with predictable load growth. Gigawatt-scale datacenters challenge these assumptions.

Key Rate Structure Innovations

Contract Duration: 14-20 Years

Traditional utility contracts ran 1-5 years. Datacenter contracts now span 14-20 years:

• Dominion Energy Virginia: 14-year contracts proposed for customers >25 MW
• Georgia Power: 15-year contracts required under 100 Megawatt Rule (up from 5 years)
• Duke Energy: Long-term Energy Supply Agreements (ESAs) for large load customers

Rationale: Utilities need long-term commitments to justify infrastructure investments with 30-40 year payback periods. Without long contracts, utilities face stranded asset risk if datacenters close or don’t materialize.

Minimum Take-or-Pay: 85% Standard

Utilities require customers to pay for minimum power regardless of consumption:

• Dominion Energy Virginia: 85% minimum for transmission/distribution, 60% for generation
• Georgia Power: Minimum billing requirements in 100 MW Rule
• AEP Ohio: 85% of expected monthly energy minimum
• Duke Energy: Minimum take provisions for new datacenter customers

Rationale: Datacenters can reduce power consumption during low-utilization periods, but utility infrastructure remains fixed. Minimum take provisions ensure cost recovery and prevent residential customers from subsidizing unused datacenter capacity.

Customer-Funded Infrastructure

Datacenter customers increasingly pay directly for transmission and distribution infrastructure:

• Georgia Power 100 MW Rule: Customers cover all transmission and distribution construction costs
• Cloverleaf Wisconsin: Partnership with Microsoft ensures infrastructure costs not subsidized by residential customers
• General Trend: Utilities shifting from socializing datacenter infrastructure costs to direct customer funding

Impact: This fundamental shift protects residential and commercial ratepayers from datacenter infrastructure costs, but increases datacenter capital requirements and extends project timelines.

Financial Viability Requirements

Utilities now require proof of financial viability before accepting interconnection requests:

• AEP Ohio Settlement: Customers must demonstrate financial viability
• Exit Fees: Customers pay penalties if projects are canceled after utility begins infrastructure work
• Deposit Requirements: Substantial upfront deposits to cover interconnection study costs

Rationale: The gap between interconnection requests and completed projects has widened dramatically. Utilities need assurance that customers are serious and financially capable before investing in studies and infrastructure.

Case Study: Dominion Energy’s Proposed Data Center Rate Class

Dominion Energy Virginia’s proposed rate class (under Virginia State Corporation Commission review) exemplifies the new utility-datacenter relationship:

Eligibility: Customers using >25 MW with load factor >75% monthly

Contract Terms:

• 14-year contract duration
• 85% minimum demand charge for transmission and distribution
• 60% minimum demand charge for generation
• Customer funding for transmission and distribution infrastructure

Cost Recovery: Upstream generation, transmission, and distribution costs recovered through rate base

Ratepayer Protection: Structure designed to prevent residential customers from bearing costs if datacenter demand doesn’t materialize

Industry Impact: Other states are watching Virginia’s regulatory proceedings closely. Approval would establish a precedent for datacenter rate structures nationwide.

Interconnection Queue Crisis

The interconnection queue crisis represents the most immediate bottleneck to datacenter growth. Even with available generation capacity, datacenters cannot connect to the grid without completing interconnection studies and building transmission infrastructure.

Queue Timeline Extensions

Interconnection timelines have extended from 2-3 years to 5-7+ years:

• Dominion Energy Virginia: Wait times extended to 7 years for large datacenters in Eastern Loudoun County
• PJM Interconnection: Backlog of requests across mid-Atlantic region, cluster study process reformed to address delays
• ERCOT/Oncor: 186 GW queue (137 GW formal requests) creating unprecedented study backlog

Impact: Projects that could have connected in 2026 are now pushed to 2030+, driving operators toward behind-the-meter solutions.

Queue Reform Efforts

PJM Interconnection (serving Mid-Atlantic region including Virginia, Pennsylvania, Ohio):

• Cluster study approach: Grouping interconnection requests for simultaneous study
• Dominion Energy: 72 proposals addressing up to 7,500 MW datacenter load forecasts by 2027-28
• Regional transmission planning: Valley Link Transmission joint venture ($5.9B) between Dominion, AEP, and FirstEnergy

Duke Energy North Carolina:

• Large Load Integration Process: Aggregates large load customers into “tranches” similar to generator interconnection study cluster
• Threshold: 100 MW+
• Process: Initial engagement, transmission study, Letter Agreement, Energy Supply Agreement (ESA)

Challenge: Even with reforms, the sheer volume of requests overwhelms utility planning capacity. Studies are expensive (millions of dollars) and time-consuming (12-24 months minimum).

The Behind-the-Meter Solution

Faced with 5-7 year interconnection timelines, datacenter operators are increasingly pursuing behind-the-meter generation:

Advantages:

• Bypass interconnection queue entirely
• Independent timeline (2-3 years vs 5-7+ years)
• No transmission constraints
• Potential for lower long-term costs

Disadvantages:

• Higher upfront capital requirements
• Permitting challenges for on-site generation
• Environmental opposition to fossil fuel plants
• Fuel supply contracts needed

Examples:

• Homer City Pennsylvania (4.5 GW): Seven gas turbines, connected to PJM but primarily behind-the-meter
• Joule Capital Utah (4.0 GW): Independent microgrid, “Speed to Market - No waiting on Public Utilities”
• Adams Fork West Virginia (4.8 GW): Off-grid microgrids, no utility connection

Behind-the-meter represents approximately 54.5% of gigawatt-scale projects, reflecting the severity of the interconnection crisis.

Ratepayer Protection Concerns

The datacenter power crisis has sparked intense debate about cost allocation and ratepayer protection. Residential and small business customers fear they will subsidize infrastructure for large tech companies.

The Cost Allocation Problem

Infrastructure Costs: Building transmission and distribution infrastructure to serve gigawatt-scale datacenters costs billions:

• Dominion Energy: $50.1 billion capital plan (2025-2029), driven largely by datacenter demand
• Oncor: $36 billion capital plan (2025-2029) plus potential$12 billion more
• Georgia Power: “Upstream generation/transmission/distribution cost recovery” in 100 MW Rule

Traditional Utility Model: Infrastructure costs are socialized across all customers through rate base. All customers pay a share of transmission and distribution investments, regardless of who benefits.

Datacenter Challenge: A single gigawatt datacenter requires more power than 750,000 homes. Should 750,000 residential customers help pay for infrastructure serving one datacenter?

State Regulatory Responses

Virginia: Most Controversial

Issue: Dominion Energy’s 40 GW pipeline requires ~$50 billion in infrastructure investments. Who pays?

Proposed Solution: New datacenter rate class with:

• Customer-funded transmission and distribution infrastructure
• 14-year contracts with minimum take provisions
• Separate billing from residential customers

Controversy:

• Plaza 500 Alexandria project: $23 million substation to serve 466 MW datacenter near residential area, initially to be funded by all ratepayers
• Disconnection crisis: Dominion disconnected 71,000 Virginia customers for non-payment in 2023, raising questions about priorities
• Cost allocation: Even with new rate class, generation investments may still be socialized

Political Response: Virginia legislators have proposed bills to limit datacenter cost impacts on residential customers, hearings held on ratepayer protection

Georgia: Proactive Approach

100 Megawatt Rule (approved January 2025):

• Customers >100 MW cover all transmission and distribution construction costs
• 15-year contracts ensure long-term commitment
• Minimum billing requirements protect against underutilization
• Upstream cost recovery for generation

Impact: Georgia’s proactive approach is seen as a model, balancing datacenter growth with ratepayer protection

Ohio: Settlement Approach

AEP Ohio Rules (approved July 2025):

• Settlement agreement with multiple stakeholders (PUC staff, Consumer Counsel, Ohio Energy Group, Ohio Partners for Affordable Energy, Walmart)
• Datacenters >25 MW requirements:
  • Pay 85% of expected monthly energy minimum
  • Demonstrate financial viability
  • Pay exit fees if projects canceled
• Broad stakeholder support indicates balanced approach

The Economic Development Argument

Utilities and economic development agencies argue datacenter infrastructure investments benefit all customers:

Arguments:

1. Tax Base: Datacenters pay significant property taxes supporting local services
2. Economic Development: High-paying datacenter jobs and construction activity
3. Grid Modernization: Infrastructure improvements benefit all customers
4. Excess Capacity: New generation and transmission capacity provides grid resilience
5. Technology Hub: Datacenters attract other tech companies and investment

Counter-Arguments:

1. Tax Incentives: Many datacenters receive 20-year property tax abatements, reducing tax base argument
2. Job Quality: Datacenters employ relatively few people (50-200 per gigawatt) compared to traditional industries
3. Environmental Impact: Natural gas generation increases emissions, conflicts with climate goals
4. Cost Inequality: Benefits concentrated among datacenter companies and utilities, costs socialized among all ratepayers
5. Water Usage: Datacenters consume significant water resources for cooling in water-scarce regions

Community Opposition

Several high-profile projects have faced community opposition:

Plaza 500 (Alexandria, Virginia):

• 466 MW datacenter near residential neighborhoods
• $23 million substation to be paid by all Dominion customers
• Community argued about noise, property values, cost allocation
• Project approved by State Corporation Commission (August 2025) despite opposition

Prince William Digital Gateway (Gainesville, Virginia):

• 3 GW datacenter campus
• Power requirement equals 750,000 homes (5x county households)
• Approved 5-2 by County Board (November 2022)
• Ongoing concerns about infrastructure costs and environmental impact

Pattern: Opposition strongest when:

1. Datacenters are proposed near residential areas
2. Infrastructure costs are socialized
3. Environmental impacts (noise, water usage, emissions) affect local communities
4. Benefits (jobs, taxes) appear limited compared to costs

Power Capacity by Project Size

The distribution of power capacity by project size reveals the industry’s dramatic shift toward gigawatt-scale facilities:

Key Findings:

• Gigawatt-scale dominance: Projects ≥1 GW represent 65.8% of total documented capacity (86.6 GW)
• Scale shift: The industry has moved from 10-50 MW facilities (traditional colocation) to gigawatt campuses
• AI driver: Large language model training and inference require concentrated compute power, favoring massive single-campus deployments
• Economies of scale: Power, cooling, and network infrastructure costs per MW decrease significantly at gigawatt scale

The 46 Gigawatt Projects

46 projects have power capacity ≥1 GW, totaling 86.6 GW (65.8% of all documented power):

Top 10 by Capacity:

[See full list of 46 gigawatt projects with details on /wiki/datacenters/projects]

Power Source Analysis

Natural Gas: The Dominant Fuel

Natural gas powers the datacenter boom:

• 10 of 11 multi-gigawatt projects (91%) rely on natural gas as primary or initial source
• Pennsylvania concentration: All 3 gigawatt projects use Marcellus/Utica shale gas
• Combined Heat and Power: 2 projects use CHP/CCHP systems for efficiency
• Hydrogen-enabled turbines: Homer City’s GE Vernova turbines can transition to hydrogen
• Carbon capture: Adams Fork West Virginia projects capture >99% CO2 for ammonia production

Why Natural Gas?

1. Reliability: 24/7 baseload power, unlike solar/wind intermittency
2. Scalability: Can supply gigawatts from single plant
3. Timeline: Can be deployed in 2-3 years vs 5-7+ years for grid connections
4. Geographic availability: Abundant supply in Pennsylvania, Texas, other datacenter-heavy regions
5. Lower cost: Natural gas generation costs ~$50-70/MWh vs$80-100/MWh for solar + storage

Environmental Concerns:

• Natural gas emits ~400 kg CO2 per MWh
• A 1 GW datacenter running 24/7 on natural gas emits ~3.5 million tons CO2 annually
• Conflicts with tech company net-zero commitments
• Growing opposition from environmental groups

Renewable Energy: The Aspiration

Only 3 of 11 multi-gigawatt projects have significant renewable components:

1. Data City Texas (5.0 GW): 100% renewable target with green hydrogen transition
2. Vermaland Arizona (3.0 GW): 66% solar target, transitioning from gas
3. Cloverleaf Wisconsin (3.5 GW): 30%+ renewable commitment

Challenges:

• Intermittency: Solar/wind cannot provide 24/7 power without massive battery storage
• Land requirements: 1 GW solar requires ~5,000-8,000 acres
• Battery costs: 1 GWh storage costs ~$300-400 million
• Timeline: Solar farms take 3-5 years to develop and build
• Grid integration: Large-scale renewable injection requires transmission upgrades

Nuclear: The Long-Term Solution?

Multiple tech companies have announced nuclear partnerships:

• Amazon + X-energy: 5 GW SMR deployment target by 2039
• Google + Kairos Power: 500 MW across 6-7 reactors by 2030-2035
• Microsoft + Constellation: Three Mile Island Unit 1 restart (837 MW by 2027)
• Oklo + Switch: 12 GW deployment over 20 years

Timeline Reality: First advanced reactors won’t be operational until 2027-2030, with major scale-up in 2030-2039. This is too late to address the current power crisis, but positions nuclear as the long-term solution for 24/7 carbon-free power.

[See detailed nuclear partnerships analysis at /wiki/datacenters/infrastructure/power/nuclear]

Battery Storage: Essential but Insufficient

Battery storage features in 5 gigawatt projects:

• Joule Capital Utah: 1.1 GWh (largest)
• Delta Utah: 500 MW, expandable to 5+ GW
• Vermaland Arizona: Significant capacity
• Data City Texas: Included in hybrid system
• Tract projects: Multiple battery installations

Role: Batteries provide:

• Peak shaving (reduce demand during high-cost periods)
• Frequency regulation (grid stability)
• Backup power during grid outages
• Time-shifting (store solar/wind for evening use)

Limitations: Current battery costs make it impractical to provide 24/7 power. A 1 GW datacenter running 24/7 requires 24 GWh storage, costing ~$7-10 billion. Batteries work best for 4-8 hour duration, not continuous power.

Microgrid Development

Microgrids represent a fundamental shift in datacenter power strategy. Rather than depending on utility grids, operators build self-contained power generation and distribution systems.

Why Microgrids?

1. Bypass interconnection queues: 2-3 year timeline vs 5-7+ years for grid connection
2. Power quality control: Direct control over voltage, frequency, reliability
3. Cost predictability: Fixed fuel costs vs uncertain utility rate increases
4. Scalability: Can expand power without utility approval
5. Energy independence: Not subject to grid congestion or curtailment

Gigawatt Microgrid Projects

On-Site Generation (54.5% of gigawatt projects):

1. Homer City Pennsylvania (4.5 GW): Seven GE Vernova gas turbines, connected to PJM but primarily self-powered
2. Joule Capital Utah (4.0 GW): Fleet of Caterpillar generator sets with CHP/CCHP, explicitly marketed as “No waiting on Public Utilities”
3. Data City Texas (5.0 GW): Behind-the-meter, independent from ERCOT grid
4. Adams Fork West Virginia - Wharncliffe (2.4 GW): Off-grid microgrid, no utility connection
5. Adams Fork West Virginia - Harless (2.4 GW): Off-grid microgrid, no utility connection
6. Shippingport Pennsylvania (2.7 GW): Behind-the-meter with grid export capability

Total On-Site: 24.3 GW across 6 projects

Microgrid Technologies

Natural Gas Generators:

• Most common: Caterpillar, GE Vernova, Wartsila engines
• Combined cycle or simple cycle turbines
• CHP/CCHP systems capture waste heat for cooling
• Efficiencies: 35-60% depending on configuration

Grid-Forming Batteries:

• Provide voltage and frequency stability
• Allow seamless transitions between generation sources
• Joule Capital: 1.1 GWh grid-forming BESS

Fuel Cells (emerging):

• AEP + Bloom Energy: Up to 1 GW solid oxide fuel cells
• Advantages: Higher efficiency (60%+), lower emissions, fuel flexibility
• Challenge: Higher capital costs than gas turbines

Regulatory Challenges

Microgrids face unique regulatory hurdles:

Air Quality Permits:

• Adams Fork West Virginia: Public hearings on air quality impacts
• Homer City Pennsylvania: EPA and Pennsylvania DEP approval required
• Challenge: States face pressure to reduce emissions, but datacenters want natural gas generation

Water Rights:

• Cooling water for generators and datacenters
• Particularly challenging in Western states (Nevada, Arizona, Utah)

Interconnection for Export:

• Some microgrids want to export excess power to grid (Shippingport, TECfusions)
• Requires utility interconnection agreements even for behind-the-meter projects
• Regulatory uncertainty about compensation for exported power

Local Zoning:

• Community opposition to industrial-scale power plants
• Noise, emissions, traffic concerns
• Some projects face multi-year zoning battles

Regional Analysis

Pennsylvania: Natural Gas Capital

10.2 GW across 3 gigawatt projects makes Pennsylvania the datacenter power leader:

Geography: Western Pennsylvania near Pittsburgh, access to Marcellus and Utica shale formations

Projects:

• Homer City (4.5 GW): Former coal plant site, seven gas turbines
• TECfusions Keystone Connect (3.0 GW): Former Alcoa R&D campus, Marcellus gas
• Shippingport/Bruce Mansfield (2.7 GW): Former coal plant conversion

Advantages:

• Abundant natural gas (Marcellus Shale produces 38 Bcf/day, ~37% of US total)
• Low gas prices ($2-3/MMBtu vs$6-8/MMBtu nationally)
• Existing transmission infrastructure from coal plants
• PJM interconnection for grid export
• Established industrial workforce

Challenges:

• Air quality concerns (region has coal history)
• Environmental opposition to fossil fuel expansion
• Transmission congestion in some areas

Economic Impact: Pennsylvania is positioning itself as the “Data Center Capital of the East” to compete with Virginia. The three gigawatt projects represent $15+ billion in combined investment.

Virginia: Grid Dependency

5.8 GW across 14 documented projects in Northern Virginia, the world’s largest datacenter market:

Geography: Loudoun County (“Data Center Alley”), Prince William County, Fairfax County

Dominance: Dominion Energy monopoly, 40 GW pipeline

Challenges:

• Interconnection queue delays (7 years)
• Transmission congestion in Eastern Loudoun
• Ratepayer cost allocation battles
• Community opposition (Plaza 500, Prince William)

Strategy Shift: Virginia datacenters traditionally relied entirely on grid power. Interconnection delays are now driving some operators toward alternate locations (Pennsylvania, Texas, Ohio) or behind-the-meter solutions.

Nuclear Future: Amazon + Dominion SMR partnership at North Anna could provide 300-500 MW of carbon-free power by mid-2030s, but too late for current demand surge.

Texas: ERCOT Independence

7.6 GW in documented projects with unique market dynamics:

ERCOT Market: Deregulated, energy-only market with no capacity payments

Oncor Crisis: 186 GW interconnection queue, most severe in nation

Behind-the-Meter: Texas leads in behind-the-meter datacenter power:

• Data City Texas (5.0 GW): 100% behind-the-meter, independent from ERCOT
• Multiple smaller projects pursuing similar strategies

Advantages:

• Abundant natural gas production (Texas produces 30% of US natural gas)
• Deregulated market allows flexibility
• Large land availability in West Texas
• Low electricity costs (when available)

Challenges:

• ERCOT reliability concerns after 2021 winter storm
• Summer peak demand competition with residential AC load
• Transmission constraints in rural areas
• Water scarcity in West Texas

Utah: High Desert Opportunity

8.0 GW across 2 gigawatt projects in central Utah:

Projects:

• Delta Gigasite (4.0 GW): Utilizes Intermountain Power Project infrastructure
• Joule Capital Millard County (4.0 GW): Independent microgrid

Advantages:

• Low land costs ($2,000-5,000 per acre vs$200,000+ in Virginia)
• Dry climate reduces cooling requirements
• Business-friendly regulatory environment
• Proximity to fiber routes (West Coast to East Coast)

Challenges:

• Water scarcity (evaporative cooling uses 1-5 gallons/kWh)
• Limited transmission capacity
• Distance from end users (higher latency)
• Intermountain Power Agency capacity constraints

Strategy: Utah projects use hybrid approaches combining grid connection (where available) with on-site generation and storage.

Implications and Future Outlook

The Infrastructure Investment Required

To support 326.5 GW of datacenter demand, the United States needs:

Generation:

• 326 GW of new generation capacity
• At $1.5-2.0 billion per GW:$489-652 billion

Transmission:

• Thousands of miles of high-voltage transmission lines
• Hundreds of new substations
• Estimated $200-300 billion

Distribution:

• Local distribution network upgrades
• Last-mile connections
• Estimated $100-150 billion

Total Infrastructure Investment: $800 billion to$1.1 trillion

For context:

• 2021 Infrastructure Investment and Jobs Act: $1.2 trillion total, not all for energy
• Rural Electrification (1935-1950s): ~$350 billion in 2024 dollars
• Interstate Highway System: ~$500 billion in 2024 dollars

The datacenter power crisis represents an infrastructure challenge comparable to the largest in US history.

Timeline Constraints

The gap between demand and supply capacity:

Immediate Need (2025-2027):

• ~50 GW in signed agreements or advanced planning
• Behind-the-meter solutions can partially fill gap
• Grid interconnections severely delayed

Medium-Term (2028-2030):

• ~100 GW as utilities complete transmission upgrades
• First advanced nuclear reactors online
• Battery storage costs decline 30-40%

Long-Term (2031-2040):

• Full 326+ GW buildout possible
• SMR nuclear provides 24/7 carbon-free power at scale
• Hydrogen infrastructure may become viable

Risk: If infrastructure lags demand, US datacenters move offshore (Canada, Nordic countries, Middle East) where power is more available.

Policy Implications

The power crisis requires policy responses at federal, state, and local levels:

Federal:

• Transmission siting reform (reduce multi-state permitting obstacles)
• Nuclear licensing acceleration for SMRs
• Investment tax credits for datacenter renewable energy
• Grid modernization funding
• Strategic priority designation for datacenter power

State:

• Rate design reform balancing datacenter growth with ratepayer protection
• Interconnection queue management and study process improvements
• Environmental permit streamlining for critical projects
• Economic development incentives tied to renewable energy commitments
• Water rights allocation for datacenters in water-scarce regions

Local:

• Zoning for datacenter and power generation co-location
• Community benefit agreements for large projects
• Impact mitigation (traffic, noise, property values)

Environmental Implications

The shift to natural gas for datacenter power has significant climate implications:

Emissions Growth:

• 100 GW of natural gas datacenters: ~350 million tons CO2 annually
• Equivalent to 75 million passenger vehicles
• Could offset renewable energy gains in other sectors

Conflict with Net-Zero Goals:

• Tech companies have net-zero commitments by 2030-2040
• Natural gas generation makes these targets harder to achieve
• Pressure for renewable energy and nuclear alternatives

Environmental Justice:

• Power plants and transmission lines disproportionately impact low-income communities
• Air quality impacts from natural gas generation
• Water resource competition in drought-prone regions

The AI Wild Card

Generative AI and large language models are the primary driver of gigawatt-scale datacenter demand:

Power Requirements:

• GPT-4 training: ~50 MW for 100 days
• Inference (usage): 1,000 requests per second requires ~1 MW
• Next-generation models (GPT-5, Claude 4, Gemini Ultra): Could require 100-500 MW training runs

Growth Trajectory Uncertainty:

• If AI growth continues at current pace: 326 GW may be insufficient
• If AI hits limitations or adoption slows: Substantial overcapacity risk
• Power-efficient AI chips could reduce demand 50-70%

Investment Risk: Utilities investing $800 billion to$1.1 trillion face existential risk if AI demand doesn’t materialize. This drives conservative utility approaches and explains emphasis on long contracts and customer-funded infrastructure.

Conclusion

The US datacenter power crisis is unprecedented in scale and complexity. With 326.5 GW in utility pipelines and 131.7 GW in documented projects, the industry faces infrastructure challenges comparable to rural electrification or the interstate highway system.

Key takeaways:

1. Natural gas dominance: 10 of 11 gigawatt projects rely on natural gas, driven by timeline urgency and reliability requirements
2. Behind-the-meter shift: 54.5% of gigawatt projects pursue on-site generation to bypass 5-7 year interconnection queues
3. Rate structure revolution: 14-20 year contracts with 85% take-or-pay and customer-funded infrastructure becoming standard
4. Interconnection crisis: Oncor’s 186 GW queue exemplifies the breakdown of traditional utility interconnection processes
5. Ratepayer protection: Georgia, Virginia, and Ohio lead in developing rate structures that protect residential customers
6. Geographic concentration: Pennsylvania, Utah, Texas, Virginia, and Nevada emerge as power-advantaged datacenter locations
7. Environmental tension: Natural gas conflicts with net-zero commitments, driving long-term nuclear and renewable strategies
8. Investment scale: $800 billion to$1.1 trillion infrastructure investment required, with uncertain payoff if AI growth slows

The next 3-5 years will determine whether the US can build infrastructure fast enough to support AI and cloud computing growth, or whether capacity constraints force datacenter development offshore.

Related Pages

• Datacenter Geography - Regional analysis of datacenter markets
• Nuclear Partnerships - Detailed analysis of tech company nuclear strategies
• Utility Profiles - Deep dives on individual utilities
• Gigawatt Projects - Complete database of projects ≥1 GW
• Environmental Impact - Climate and environmental implications

Data Sources

This analysis draws on:

• Utility investor presentations and earnings calls
• State public utility commission filings
• Interconnection queue reports (PJM, ERCOT, other ISOs)
• Project announcements and press releases
• Industry publications (Data Center Dynamics, Utility Dive, Data Center Frontier)
• Regulatory proceedings and settlement agreements

Last Updated: October 16, 2025

Data Coverage:

• 604 total projects tracked
• 325 projects with confirmed power capacity
• 8 major utilities with detailed pipeline data
• 11 multi-gigawatt projects (≥2.4 GW) analyzed in depth
• 46 gigawatt-scale projects (≥1.0 GW) cataloged