By Mark Jaffe, EUCI energy writer
Facing a data center building boom, states are taking a broad range of actions from declaring a moratorium to enacting legislation to seeking a pledge from developers that they will not impact electric rates.
The rapid growth of data centers has turned into a political issue in some states.
Consultant Wood Mackenzie is tracking 134 gigawatts of proposed data centers across the U.S., a 68% increase from 2024, and financial analyst Morningstar said the sector is entering a “super cycle” of capital expenditures with a projected $1.4 trillion in investments over the next five years.
The most dramatic action was taken on July 14 by New York State, which imposed a one-year statewide moratorium on new hyperscale data centers to “ensure New Yorkers are not paying for transmission and infrastructure build-outs.”
“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Gov. Kathy Hochul said in signing the moratorium executive order.
The state will use the year to develop a framework to protect natural resources and electricity rates. Data centers will be required to generate their own electricity or pay a premium to connect to the gird.
Hochul also proposed data centers pay into a fund to support the grid. The moratorium affects the largest data centers – those with at least 5,000 severs and consuming 100 megawatts of electricity.
Michigan Gov. Gretchen Whitmer has taken a different tack asking data center developers to sign the “Michigan Affordability and Responsible Growth Pledge.”
The pledge outlines the state laws and orders from the Michigan Public Service Commission data center developers must follow to protect Michigan consumers from higher energy bills and safeguard Michigan’s environment.
“It’s simple: any data center company that wants to invest in Michigan must ensure working families do not pay a single penny for data center development or operations, protect our natural resources, and create local, good-paying jobs,” Whitmer said in a July 15 statement.
State legislatures are also taking action. On July 12, Pennsylvania Gov. Josh Shapiro signed the state’s new budget in which legislators included requirements for data centers to report their exact electric and water usage to the state annually.
“There is a need for oversight by the Pennsylvania Public Utility Commission to ensure accuracy and transparency of load-forecast inputs,” the data center bill, which was folded into the budget, states.
A data center failing to comply with new reporting requirements would be fined $10,000 per day until their report is submitted, according to the budget.
Last October, the California legislature passed a bill directing the state public utilities commission to assess the extent to which costs associated with new loads from data centers result in cost shifts to other electrical customers and report back to the legislature.
Texas is the fastest-growing data center market in the U.S. with more than 410 operating data centers and an additional 6.5 gigawatts of capacity actively under construction.
On July 9, the Texas Public Utility Commission adopted rules for large computational loads – data center and cryptocurrency mines.
The rules require facilities using the Electric Reliability Council of Texas (ERCOT) grid to stay stable and connected to the grid through disruptions.
“The frequency and voltage ride-through requirements … are necessary to ensure Large Electronic Loads do not present a reliability risk to the system by tripping when frequency and voltage excursions within a specified range occur,” the commission said.
Since October 2022, ERCOT has identified many events that included load loss from one or more large-load facilities during a typical voltage disturbance. The new rules, the commission said, are necessary to ensure large electronic loads do not present a reliability risk to the system.
Processing…please wait
