Most Data Center Power Requests Are Duplicates or Never Get Built
Utilities cannot tell which requests are real, and if they guess wrong, households could pay for grid upgrades for data centers that never arrive.
WSJ What's News · IMF Warns AI’s Riches Are Increasingly ConcentratedOnly about one in four data center power requests is expected to result in a real project.
The reason is shopping around. Buildings packed with computers to run artificial intelligence use enormous amounts of electricity, and hooking up such a large user to the power grid can take years. So a developer hunting for a site will often ask for electric service in several places at once, to see who can deliver power fastest and cheapest.
That means several different utilities can receive paperwork for the same project. It may be real in one place, if it gets built at all, and a duplicate everywhere else. Research firm Wood Mackenzie estimated that only 23 percent fall into its "high confidence" category, while the rest are speculative.
For utilities, that creates a difficult guess. If a utility under-builds power lines and substations, the equipment that moves electricity around, it can miss out on a large new customer. If it over-builds and the data center goes elsewhere, the cost of those investments gets shared among everyone else on the system.
In practice, that means households and other businesses could see higher electric bills to pay for grid upgrades for a data center that never arrives.
To avoid that, utilities are making it harder for developers to simply request power. They are locking data center companies into longer contracts, requiring them to pass through a series of approval gates as the project develops, and demanding larger payments upfront before construction starts.
The queue of power requests looks huge, but much of it is the same projects counted again and again.
Questions people ask
How much electricity does an AI data center actually use?
A data center built for AI holds thousands of servers running constantly, so it needs far more electricity than an ordinary office building, store, or apartment complex. That large, steady load is why a single project can affect the local grid and require major upgrades.
Why does it take so long to connect to the grid?
Big users often require new transmission lines, substations, and engineering studies to make sure the system stays reliable. Those projects need permits, land, equipment, and construction crews, which are all in short supply, so waiting years for a connection is common.
What are utilities doing to filter requests?
They are making contracts more complex and screening proposals in stages. Developers face longer lock-in periods, a gating system to move through as plans firm up, and larger upfront payments before utilities start building.