This week’s Zoning In covers recent key developments and controversies shaping the data center industry. From AEP Ohio’s agreement on interconnection rules to Bain’s study on data centers’ impact on electricity demand—it is projected to drive a 1% rise in customer bills through 2032. In Virginia, a professor’s investigation into NDAs with localities highlights the tension between development and public transparency. At the same time, Foreign Policy’s exploration of AI infrastructure showcases the geopolitical stakes of global data center expansion.
AEP Ohio Reaches Agreement on Data Center Interconnection Rules
AEP Ohio and a coalition of stakeholders, including consumer and energy advocacy groups, have reached a landmark agreement on data center interconnection rules, now awaiting approval from the Public Utilities Commission of Ohio (PUCO). Under the proposal, large data centers exceeding 25 M.W. would cover 85% of anticipated energy needs monthly, pay exit fees if commitments aren’t met, and undergo financial viability checks. The proposal, supported by groups like the Ohio Consumers’ Counsel, aims to safeguard consumers from bearing data center expansion costs. However, the Data Center Coalition argues that such stipulations could hamper Ohio’s data center growth by inflating costs and adding restrictions. This decision comes amid a broader trend where utilities nationwide face high-volume service requests from data centers, some exceeding 1,000 MW.
Read the Full Article at Utility Dive
Investigation by University of Mary Washington Professor Digs Up NDAs Between Virginia Localities and Tech Companies
The article explores a recent investigation by University of Mary Washington professor Eric Bonds and his students into non-disclosure agreements (NDAs) between Virginia localities and tech companies, especially data center operators. The research, which utilized Virginia’s Freedom of Information Act (FOIA), revealed that NDAs are frequently used in data center-related projects in areas like Fredericksburg, Caroline, Louisa, Orange, Culpeper, and Stafford counties. These agreements often restrict public access to information on data center developments, raising concerns about transparency and public involvement, especially regarding environmental impacts on water and electricity usage.
Some local authorities, such as Louisa and Culpeper, argued that NDAs help prevent competitive land bidding wars and are allowed under Virginia law. They assert that critical information, like water and power needs, is eventually shared publicly through hearings and consultations with utilities. However, the secrecy around early negotiations means many details remain hidden until projects near final approval.
The article also mentions that Josh Levi, president of the Data Center Coalition, believes NDAs can actually encourage detailed information-sharing with local governments, which may benefit the public. Despite this, some localities remain non-transparent or inconsistent in responding to FOIA requests, leading to ongoing scrutiny from groups like the Virginia Coalition for Open Government, which advocates for greater transparency.
In a separate case, Richmond’s former FOIA officer, Connie Clay, has accused the city of stalling her wrongful termination lawsuit, which she claims was due to her whistleblowing on public records law violations. The article highlights the tension between Virginia’s FOIA intentions and actual practices that often hinder public access to government records.
Read Full Article at Virginia Mercury
New Report from Bain & Company Looks at Electricity Demand Driven by Data Centers
A recent report from Bain & Company highlights the dramatic rise in U.S. electricity demand driven by data centers and artificial intelligence (A.I.), which could lead to a 1% annual increase in customer bills through 2032. According to Bain, data centers could account for 44% of U.S. electricity load growth between 2023 and 2028, requiring some utilities to increase annual power generation by up to 26% to meet the growing demand. This surge, primarily from data centers, residential expansion, and manufacturing, could see data centers consuming nearly 9% of total U.S. electricity by 2030—double the current usage.
Bain’s Aaron Denman stresses the need for efficiency in utility capital deployment and suggests that hyperscale data center developers may need to invest in grid infrastructure directly to lessen the burden on utilities and consumers. Rising bills could slow data center demand, urging utilities to explore demand response programs and prioritize specific types of projects based on workload flexibility, such as crypto mining, which has adaptable power needs. This approach would help utilities better manage the integration and load requirements of data centers as the industry continues its rapid growth.
Read The Full Article at Utility Dive
Foreign Policy Magazine Looks at Global AI Infrastructure Challenges
Foreign Policy recently shed light on how AI’s rapid global advancement and the infrastructure supporting it—particularly data centers. Unlike previous industrial revolutions concentrated in a few regions, AI’s growth is fundamentally global, involving international partnerships across sectors such as chip manufacturing, energy, and data storage. The U.S. currently leads in data center capacity, yet strained energy grids, limited connectivity, and regulatory bottlenecks hinder domestic expansion. Countries that host AI-ready data centers gain geopolitical leverage and economic benefits, making “data center diplomacy” a critical strategy for both governments and corporations.
While China pursues robust AI and data infrastructure, including nuclear energy investments to fuel data centers, other nations like Canada, Japan, and the Nordic countries are also emerging as favorable data center hubs due to their renewable energy capabilities, technological expertise, and strong regulatory frameworks. Each country’s role in this AI ecosystem will shape the landscape of technological influence in the coming decades, making resilient, sustainable, and strategically placed data centers a global priority.
Read The Full Article at Foreign Policy
Power Surge: Kentucky Utilities Prepare for Massive Data Center Impact
Louisville Gas and Electric Company (LG&E) and Kentucky Utilities (K.U.) anticipate substantial economic growth driven by data centers, projecting a 30% to 45% system load increase by 2032. Their Integrated Resource Plan, submitted to the Kentucky Public Service Commission, outlines a path to meet this demand, recommending new natural gas facilities, extensive battery storage, and solar power installations to support both existing and new loads while adhering to environmental regulations. The rising load is largely due to tech clients with aggressive carbon goals, a trend mirroring national data center demand. By 2030, U.S. data centers may consume up to 9% of the country’s electricity.
Read The Full Article at PowerGrid International
Opinion Piece Argues that Arizona’s booming data center Industry brings Significant Challenges
In this op-ed, Tim Steller argues that Arizona’s booming data center industry, particularly around Phoenix, brings significant but under-addressed challenges, including heavy energy and water demands, minimal job creation, and increased pressures on public utilities. Data centers, which are proliferating partly due to the needs of generative A.I., consume vast energy resources, pushing Arizona’s electric utilities toward increased fossil-fuel reliance and potentially higher electricity costs for residents. Steller points out that AI-driven energy needs could spur inflationary pressures, as highlighted by law professor Barak Orbach. Both candidates for the Arizona Corporation Commission are concerned about balancing tech demands with Arizona’s resources, debating whether new nuclear energy solutions or direct renewable energy deals could address these challenges. Steller urges Arizona’s elected officials to better protect the public’s interest over those of Big Tech, ensuring that Arizona doesn’t shoulder undue burdens for Silicon Valley’s benefit.
