US Utilities Rewrite Policies to Manage AI Data Center Surge

Municipal and state power authorities in the United States are overhauling energy policies to manage a surge in electricity demand driven by artificial intelligence. In Seattle, Seattle City Light is reviewing a draft large-load policy with Mayor Katie Wilson after companies including Prologis, Equinix, and Sabey proposed four large-scale data centers. These facilities could demand approximately 370 megawatts—roughly one-third of the city's average daily electricity use—which officials warn could strain engineering resources and increase residential rates.

Simultaneously, the Electric Reliability Council of Texas (ERCOT) is managing a waitlist of data centers seeking connection by 2030. CEO Pablo Vegas testified before the Texas House Committee on State Affairs that incoming businesses plan to draw 410,000 additional megawatts from the grid, with data centers comprising about 87% of those projects. This demand far exceeds the grid's current 90-gigawatt maximum capacity.

To mitigate these risks, Texas legislators authorized ERCOT to charge study fees for energy requirements, and the agency is developing a "batch interconnection process" requiring deposits for upgrades. In Seattle, the utility is rewriting contracts to potentially require large users to secure their own power generation. Meanwhile, Texas officials are investigating sudden, multi-million dollar transmission charges facing developers, while industry leaders note that many announced projects remain speculative.