Briefing Book
Utility Briefing Book
August 4, 2023
Issue Brief
Data Centers Issue Brief
Overview
Electricity demand is projected to rise significantly in the next few years throughout the U.S. Data centers are one of the major drivers of this demand growth and, because of their rapid development and significant power demand, present new challenges for grid reliability, affordability, and decarbonization. Data centers’ impact on the grid is becoming more ubiquitous, as many facilities have operationalized or are in the process to operationalize in the next few years. In contrast, the process to deploy generation resources and build new transmission can take far longer. While some data centers have requisitioned their own generation, most are relying on the grid as is, increasing the likelihood of outages. These reliability concerns are incentivizing grid and transmission operators to make costly infrastructure upgrades to meet this new load, which in turn are causing higher costs for all ratepayers. As data centers continue to grow, state legislators will play a crucial role in mitigating impacts on costs, emissions, air pollution, and grid reliability.
Key Facts
Key Fact 1
According to the International Energy Agency, "a large data centre can consume as much electricity as 100,000 households. The largest currently under construction could consume as much as 2 million households.
Key Fact 2
Data center load growth has tripled over the past decade and is projected to double or triple by 2028.
Key Fact 3
The cost of electricity could increase by an average of 19% by 2028 due to demand growth. Much of the additional costs would be passed on to utility customers.
Please note: all legislation in this brief marked with two asterisks “**” indicates bipartisan sponsorship.
Legislation
Transparency
Currently, there is limited information available about how large data centers are operated. Understanding the specific power needs of individual data centers is essential for grid operators, utilities, and policymakers to prevent over- or under planning infrastructure upgrades to meet this new load. States can require additional data sharing for both planned and existing data centers.
- **TX SB 1929 (enacted 2023): Requires cryptomines that consume more than 75 MW of power to register with the Public Utilities Commission (PUC) and ERCOT; mandated reporting on energy usage and individual facilities’ load growth projections.
- **GA HB 1192 (passed by House and Senate, vetoed by Governor 2023): Creates a Special Commission on Data Center Planning that would study and plan for the energy and grid needs, plus their associated costs, for data centers, producing recommendations for regulators and policy makers.
Ratepayer Protection
In the years it can take for grid infrastructure upgrades to be completed, a data center might close or relocate—leaving local ratepayers on the hook to pay for now unnecessary upgrades. States can restructure their ratemaking and cost-sharing mechanisms to ensure other raterpayers, especially residents and small businesses don’t pay for new transmission, generation, and other infrastructure that primarily serves data centers.
- **GA SB 34 (reported favorably from Committee, 2025): Prohibits passing any grid or energy costs incurred solely for serving data centers onto ratepayers.
- **Utah SB 132 (enacted 2025): Enables power suppliers to directly contract with data centers to supply their energy, thereby ensuring costs are not passed onto other ratepayers.
Demand Side Solutions
Industrial demand response programs compensate industrial facilities with large electricity loads to reduce or turn off their consumption during periods of grid stress. Not all data centers are flexible loads, but when possible, states can enable data centers to participate in these programs to reduce peak demand and increase grid reliability.
- **TX SB 1929 (enacted 2023): requires the PUC to examine if individual cryptomines have potential for demand flexibility and, if so, categorize the facility to participate as a large flexible load.
- VA HB 2578 (introduced 2025): directs utilities to petition the State Corporation Commission for approval of a large load demand response program. Requires data centers to meet certain building efficiency standards to qualify for pre-existing tax incentives.
Clean Energy Requirements
Because of their massive energy consumption, data centers pose significant risks to state decarbonization and air pollution goals, as states feel pressure to maintain and expand fossil fuel use to meet high demand. However, states can require data centers to get at least a portion of their energy from renewable sources.
- OR HB 2816 (introduced 2023): requires large data centers and cryptocurrency miners in the state to reduce their GHG emissions 100% below baseline level by 2040.
- NJ S 4143 (reported favorably from Committee, 2025): requires data centers to derive all their energy from renewable or nuclear sources.
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