By Bill Poehler
Salem Statesman Journal
USA TODAY Network via Reuters Connect

The Oregon Public Utility Commission is expected to approve new rates for Portland General Electric customers that drastically increases the cost of electricity for data centers and reduces it for all other customers.

PGE on June 3 filed a rate case that would increase costs for data centers by 29 percent while reducing residential rates by 1.3 percent. The PUC delayed a decision on those rate changes until its July 7 meeting.

Oregon’s 2025 law, known as the POWER Act, was the first of its kind in the nation and separated data centers from all other classifications of customers.

“The PUC’s actions will represent an important milestone in carrying out the intent of the POWER Act, creating a more equitable system where the customers driving the greatest demand on our electric grid pay the costs associated with that demand,” Gov. Tina Kotek held a press conference in East Salem on July 2.

There are 125 data centers in Oregon, according to datacentermap.com, with a dozen more in the planning stages.

Oregon Citizens’ Utility Board Executive Director Bob Jenks said data centers use 5.6 percent of the electricity in Oregon and expects that to rise significantly in the coming years.

“By all indications, we’re expecting a significant shift in costs from non-data center customers onto data centers in the commission order that’s coming out,” Jenks said.

Jenks said he expects other benefits for residential customers to come from the law in future years.

Legislature separates data centers into their own class in 2025

separated data centers from other types of customers, including residential, and mandated 10-year contracts between the investor-owned utilities and data centers for rates.

The law was designed to ensure data centers would pay their fair share for the infrastructure and energy costs and not pass them off to residential customers.

Jenks said he expects some of the companies that own data center or representatives of them to appeal some of the POWER Act implementation.

“As they continue to grow and outpace the growth of any other customer class, we’ll see them absorbing more industrial costs and that puts less upward pressure on everyone else,” Jenks said.

Although the PGE rate-setting process is nearly complete, Pacific Power is still in the process of creating its rates in compliance with the law. Jenks said he doesn’t expect the other investor-owned utility, Idaho Power, to file a case as it is in the process of exchanging its Oregon territory.

The law also doesn’t cover municipal power providers and co-ops.

“We’re hoping that the electric co-ops in other parts of the state that also provide power, they have also been looking at their needs as well and some of them have tried to make sure the costs locally for the data centers are more fair for the rate payers,” Kotek said.

Kotek formed the Oregon Data Center Advisory Committee to come up with policy recommendations for data centers for the state Legislature to consider in the 2027 session.

“We will have some very specific actions coming out of the group by the fall that we will take into the next legislative session,” Kotek said. “The state will have a much more prominent role, making sure development of data center and other large users meets the needs of the entire state.”

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Backlog for contractors reached 9.1 months in May and experts said the climb was due in part to data center investment across the nation.

The 9.1 score was from a member survey taken between May 20 to June 3. It was higher by 0.3 months from April and 0.7 months from May 2025, officials said.

“Backlog rose to a nearly three-hear high in May,” said Anirban Basu, chief economist at ABC, in a statement. “This increase largely reflects the massive data center investments taking place across the nation.”

Basu noted 14 percent of ABC members were under contract to work on data centers and experienced higher backlog of 11.6 months compared to firms that aren’t with 8.6 months.

“The way this boom is disproportionately benefiting larger contractors helps to explain why contractor confidence slipped in May even as backlog continued to climb,” he added.

Data center projects have been widely credited with keeping the industry afloat at least since July 2025.

Backlog increased in every region except the South. However, the South remains the region with the longest backlog of 10.3 months and the largest year-over-year increase in backlog of 0.9 months. In the middle states, backlog grew since last year by 0.7 months, according to ABC.

Readings for sales, profit margins and staffing levels fell in May, the association’s confidence index showed. However, the readings for the three components were above 50, suggesting growth for the next six months.

The American Institute of Architects reported its fell to 48.3 in April, compared to 49.8 in March. This means the share of architecture firms that reported a decline in billing was more than the share the reported an increase.

National architecture firm billings haven’t crossed the 50-point threshold since January 2023, AIA officials said. Officials noted the value of new design contracts was close to returning to growth and three consecutive months of inquiries of new projects in April.

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Recent reports indicate construction activity is stabilizing in the Portland market.

Mortenson‘s latest , for the first quarter of 2026, suggests developers, owners and contractors are beginning to see increased confidence in the project pipeline. The region’s construction market remains active but selective, with project performance varying in different sectors, according to the report.

Mortenson Vice President Mike Clifford, general manager of the firm’s Portland office, said it is a cautious confidence, and owners are continuing to evaluate projects.

“Compared to where we were a year or two ago, we’re seeing projects starting to go through planning and into the design phase,” he said. “There’s greater certainty around pricing, procurement and scheduling than there’s been in the past couple of years.”

Mike Salsgiver, who is preparing to step down as CEO of the Associated General Contractors‘ Oregon-Columbia chapter, stated in an email that overall, the organization is seeing signs that the slowdown experienced over the past year is lessening.

“Larger companies such as Mortensen are reporting improvements in the pipeline as inflationary cost pressures, supply chain challenges, and interest rates are stabilizing,” Salsgiver stated.

Construction and development company Skanska also reports renewed momentum in the project pipeline on a national level.

“In the Portland market, activity seems to be stabilizing, with public sector investment in education, healthcare, and infrastructure driving much of the work,” Skanska Executive Vice President Trevor Wyckoff, general manager of the firm’s operations in Oregon and Southwest Washington, stated in an email. “Private development demand continues to be shaped by sector-specific growth, particularly by data centers and life sciences.”

According to Skanska’s spring , cautious private commercial development is leading companies to focus on essential facilities, critical upgrades and industrial capacity. Modernization, deferred maintenance and energy efficiency improvements are being prioritized over new builds.

Mortenson has seen a slight rise in project starts, Clifford said. Construction starts were up 13 percent in March, according to Mortenson’s report.

There is strong demand for large-scale infrastructure, manufacturing, and data center construction, the report states.

Several regions have reported increasingly competitive bidding environments as trade partners pursue a more limited pool of conventional commercial and institutional work. While overall labor availability and supply chain conditions have stabilized, local constraints persist in specialized trades and steel and electrical scopes.

From AGC’s perspective, availability of trained and skilled workers continues to be a problem, Salsgiver stated.

Energy infrastructure and advanced manufacturing sectors have seen some growth. In energy and infrastructure, there have been projects around the grid, grid resiliency, battery storage and renewable energy, Clifford said. Advanced manufacturing historically is a large sector in the market and it’s now experiencing some encouraging signs.

Some larger projects are starting to move forward in design. In particular, Portland General Electric has advanced some energy infrastructure projects.

Many of AGC’s contractor members, however, are encountering challenges in one sector, according to Salsgiver.

“Public projects, especially in transportation/heavy civil and heavy highway, continue to experience serious headwinds as funding for projects has become uncertain because of the (Oregon) Legislature’s failure to pass and implement a transportation funding bill that can withstand scrutiny from the voters,” he stated.

While nonresidential construction conditions remained stable through the first quarter of 2026, cost escalation and procurement conditions continued to vary by market and project type. Elevated metal pricing and continued demand tied to power, electrification and expansion of data centers are causing pressure on some materials and equipment availability, Mortenson’s report states.

“Our price increase in the market is still year over year on the lower end towards the bottom of the major markets,” Clifford said. “That reflects a market that’s been localized and subdued compared to some of the faster growing parts of the country.”

While things have moderated, the local market is still influenced by global and regional prices.

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Portland General Electric will build two solar projects in Eastern Oregon to meet growing demand from data center operators, the utility announced Tuesday.

PGE will spend approximately $540 million on a 125-megawatt solar facility and a 125-megawatt battery energy storage system in Sherman County. And in Morrow County, PGE will invest approximately $490 million in a 240-megawatt solar facility and a 125-megawatt battery system.

“We’re advancing critical infrastructure investments that will support economic development, both in Oregon and in Washington, and builds on a base of growing data center and high-tech customers,” PGE CEO Maria Pope said in a conference call on Tuesday.

The announcement came as PGE reported fourth-quarter and annual results. The utility is publicly traded under the stock symbol “POR.” PGE stock slipped 2.7 percent on Tuesday.

PGE also revealed a major acquisition, saying it would acquire PacifiCorp‘s Washington utility operations for $1.9 billion, in a deal financed in a partnership with Manulife Investment Management. PGE will manage the Washington utilities as a newly formed subsidiary regulated by the Washington Utilities and Transportation Commission.

“In this time of unprecedented electricity demand, PGE’s commitment to the Pacific Northwest and our excellent service and energy infrastructure will benefit Central and Southeastern Washington,” Pope said.

Construction of the new solar projects will begin this year; they’re slated to come online by the end of 2027, Pope said. They are eligible for federal tax credits between 30 percent and 40 percent, she added.

PGE is also moving forward with last year’s request for proposals for new generation resources, and a short list will be submitted to the Oregon Public Utility Commission this week, said Joseph Trpik, PGE’s chief financial officer.

The Portland-based utility’s large customer group — such as industrial users, including data centers — is expected to grow by 10 percent annually through 2030, Pope said.

Utilities nationwide have come under public pressure as data centers’ voracious appetites for power have caused residential rates to soar. In a nod to rising prices, Pope said PGE’s tariff proposal includes a 25 percent price hike for data center customers, which is expected to “reduce residential and small business customer prices.”

Data centers now account for about 6 percent of PGE’s total customer load, Pope said.

PGE’s total load increased 3.8 percent in 2025, and 4.7 percent in weather-adjusted terms. The industrial load jumped 14 percent, while the residential load fell 1.8 percent.

Trpik attributed the load increase to “diverse and growing data center and high-tech customers.” Warm weather in the fourth quarter weakened overall demand, he said.

The Washington deal will add 140,000 customers around Yakima, Walla Walla and other communities in Central and Southeast Washington, PGE officials said.

“This acquisition is a great fit,” Pope said, calling the deal an “excellent opportunity to expand our service to Washington state and acquire generation, transmission and distribution assets we know very well.”

The acquisition must be approved by regulators in Oregon and Washington. The regulatory process should require 11 to 12 months, Pope said.

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HARRISBURG, Pa. — The forecasts are eye-popping: utilities say they’ll need two or three times more electricity within a few years to power massive new data centers that are feeding a fast-growing AI economy.

But the challenges — some say the impossibility — of building new power plants to meet that demand so quickly has set off alarm bells for lawmakers, policymakers and regulators who wonder if those utility forecasts can be trusted.

One burning question is whether the forecasts are based on data center developments that may never get built — eliciting concern that regular ratepayers could be stuck with the bills totaling billions of dollars to construct unnecessary power plants and grid infrastructure.

The scrutiny comes as analysts warn of the risk of an artificial intelligence investment bubble that’s ballooned tech stock prices and could burst.

Meanwhile, consumer advocates are finding that ratepayers in some areas — such as the one featuring the mid-Atlantic electricity grid, which encompasses all or parts of 13 states stretching from New Jersey to Illinois, as well as Washington, D.C. — are already underwriting the cost to supply power to data centers; some of them have been built, some not.

“There’s speculation in there,” said Joe Bowring, who heads Monitoring Analytics, the independent market watchdog in the mid-Atlantic grid territory. “Nobody really knows. Nobody has been looking carefully enough at the forecast to know what’s speculative, what’s double-counting, what’s real, what’s not.”

There is no standard practice across grids or for utilities to vet such massive projects, and figuring out a solution has become a hot topic, utilities and grid operators say.

Uncertainty around forecasts is typically traced to a couple of things.

One concerns developers seeking a grid connection, but whose plans aren’t set in stone or lack the heft — clients, financing or otherwise — to bring the project to completion, industry and regulatory officials say.

Another is data center developers submitting grid connection requests in various separate utility territories, PJM Interconnection, which operates the mid-Atlantic grid, and Texas lawmakers have found.

Often, developers, for competitive reasons, won’t tell utilities if or where they’ve submitted other requests for electricity, PJM said. That means a single project could inflate the energy forecasts of multiple utilities.

The effort to improve forecasts got a high-profile boost in September, when a Federal Energy Regulatory Commission member asked the nation’s grid operators for information on how they determine whether a project is not only viable, but will use the electricity it says it needs.

“Better data, better decision-making, better and faster decisions mean we can get all these projects, all this infrastructure built,” the commissioner, David Rosner, said in an interview.

The Edison Electric Institute, a trade association of for-profit electric utilities, said it welcomed efforts to improve demand forecasting.

The Data Center Coalition, which represents tech giants like Google and Meta and data center developers, has urged regulators to request more information from utilities on their forecasts and to develop a set of best practices to determine the commercial viability of a data center project.

The coalition’s vice president of energy, Aaron Tinjum, said improving the accuracy and transparency of forecasts is a “fundamental first step of really meeting this moment” of energy growth.

“Wherever we go, the question is: ‘Is the (energy) growth real? How can we be so sure?’” Tinjum said. “And we really view commercial readiness verification as one of those important kind of low-hanging opportunities for us to be adopting at this moment.”

Igal Feibush, the CEO of Pennsylvania Data Center Partners, a data center developer, said utilities are in a “fire drill” as they try to vet a deluge of data center projects all seeking electricity.

The vast majority, he said, will fall off because many project backers are new to the concept and don’t know what it takes to get a data center built.

States also are trying to do more to find out what’s in utility forecasts and weed out speculative or duplicative projects.

In Texas, which is attracting large data center projects, lawmakers still haunted by a blackout during a deadly 2021 winter storm were shocked when told in 2024 by the grid operator, the Electric Reliability Council of Texas, that its peak demand could nearly double by 2030.

They found that state utility regulators lacked the tools to determine whether that was realistic.

Texas state Sen. Phil King told attendees at a hearing earlier this year that the grid operator, utility regulators and utilities weren’t sure if the power requests “are real or just speculative or somewhere in between.”

Lawmakers passed legislation sponsored by King, now law, that requires data center developers to disclose whether they have requests for electricity elsewhere in Texas and to set standards for developers to show that they have a substantial financial commitment to a site.

PPL Electric Utilities, which delivers power to 1.5 million customers across central and eastern Pennsylvania, projects that data centers will more than triple its peak electricity demand by 2030.

Vincent Sorgi, president and CEO of PPL Corp., told analysts on an earnings call this month that the data center projects “are real; they are coming fast and furious” and that the “near-term risk of overbuilding generation simply does not exist.”

The data center projects counted in the forecast are backed by contracts with financial commitments often reaching tens of millions of dollars, PPL said.

Still, PPL’s projections helped spur a state lawmaker, Rep. Danilo Burgos, to introduce a bill to bolster the authority of state utility regulators to inspect how utilities assemble their energy demand forecasts.

Ratepayers in Burgos’ Philadelphia district just absorbed an increase in their electricity bills. It was attributed by the utility, PECO, to the rising cost of wholesale electricity in the mid-Atlantic grid driven primarily by data center demand.

That’s why ratepayers need more protection to ensure they are benefiting from the higher cost, Burgos said.

“Once they make their buck, whatever company,” Burgos said, “you don’t see no empathy towards the ratepayers.”

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Data center construction is slowing nationwide as U.S. electrical infrastructure struggles to keep up with demand, according to a CBRE report.

Nationally, data centers totaling 5,242.5 megawatts were under construction in the first half of the year, down 17.4 percent from 6,350.1 megawatts in 2024, according to the brokerage.

Data center investments fell by more than half in the first six months of 2025 to less than $1 billion, CBRE reported.

“This slowdown was largely the result of delayed decision-making by investors due to economic uncertainty, geopolitical conflicts and power supply challenges,” the brokerage stated.

Companies including Microsoft and Amazon Web Services have paused or slowed their data center growth this year, while other large operators continue to expand.

Despite the constraints, demand remains strong, said Kristin Hammond, a CBRE senior vice president and broker based in Portland.

“The infrastructure has now been outpaced by the construction of facilities,” she said. “There’s no use to having the facility if you don’t have the power poles to service it.”

Hillsboro, along with big cloud-computing players in the Prineville area and The Dalles, remains the epicenter of the Oregon data center boom, Hammond said.

Hillsboro’s data centers had an almost nonexistent 0.2 percent vacancy rate in the first half of the year, the lowest in the nation for a major market. Rental rates averaged $150 to $155 per kilowatt per month, according to CBRE.

Net absorption in the first half of the year totaled 48.4 megawatts.

Oregon remains a popular destination for data center operators, in part due to geography, relatively cheap energy and a skilled high-tech construction workforce. Hillsboro had 475.4 megawatts of data center inventory, making it the seventh-largest market in the country, according to CBRE data. Northern Virginia remains by far the nation’s largest data center market.

Increasingly, Oregon subcontractors are being sought for data center projects in other states, said Gabe Fox, chief estimator for Mortenson in Portland.

“We have a really strong labor force that’s highly technical, which is not always the same in other markets,” he said. “We have some of the best sheet metal companies and electrical companies here in the Northwest. These companies are being sought after to bring their expertise. … They’re definitely staying busy.”

In addition to contractors’ abilities to build high-tech projects, Portland General Electric‘s experience powering semiconductor facilities has given it a leg up in providing electricity to data centers, Hammond said.

“PGE has been very savvy about it,” she said.

PGE is seeking additional energy sources to alleviate the power crunch. The company in 2023 issued a request for proposals for new power sources. Then in September 2024, PGE recommended a list of chosen projects to the Oregon Public Utility Commission. PGE is now working with the bidders to update their pricing following the passage of the federal budget bill.

PGE plans to finalize contracts this year, with projects expected to come into service by the end of 2027, the utility disclosed in July.

PGE CEO and President Maria Pope told investors during a July 25 call that the company is “seeing sustained growth from data center and high-tech customers – over 16 percent compared to the same quarter last year.”

PGE locks in long-term contracts of 10 years or more with data center customers, which allows the utility to better securitize and finance its operations, Pope said.

Nationally, CBRE found data center vacancy dropped to 1.6 percent, a record low.

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HARRISBURG, Pa. — With electricity bill amounts surging upward, states are under pressure to insulate regular household and business ratepayers from the costs of feeding Big Tech’s energy-hungry data centers.

It’s not clear whether any state has a solution, and the actual effect of data centers on electricity bills is difficult to pin down. Some critics question whether states are bold enough to take a hard line against tech behemoths like Microsoft, Google, Amazon and Meta.

But more than a dozen states have begun taking steps as data centers drive a rapid build-out of power plants and transmission lines.

That has meant pressuring the nation’s biggest power grid operator to clamp down on price increases, studying how data centers impact electricity bills or pushing data center owners to pay a larger share of local transmission costs.

Rising power bills are “something legislators have been hearing a lot about,” said Charlotte Shuff of the Oregon Citizens’ Utility Board, a consumer advocacy group. “It’s something we’ve been hearing a lot about. More people are speaking out at the public utility commission in the past year than I’ve ever seen before. There’s a massive outcry.”

Some data centers could require more electricity than cities the size of Pittsburgh, Cleveland or New Orleans, and make huge factories look tiny by comparison. That’s pushing policymakers to rethink a system that, historically, has spread transmission costs among classes of consumers that are proportional to electricity use.

“A lot of this infrastructure, billions of dollars of it, is being built just for a few customers and a few facilities, and these happen to be the wealthiest companies in the world,” said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University. “I think some of the fundamental assumptions behind all this just kind of breaks down.”

A fix, Peskoe said, is a “can of worms” that pits ratepayer classes against one another.

Some officials downplay the role of data centers in pushing up electric bills.

Tricia Pridemore, who sits on Georgia’s Public Service Commission and is president of the National Association of Regulatory Utility Commissioners, pointed to an already tightened electricity supply and increasing costs for power lines, utility poles, transformers and generators as utilities replace aging equipment or harden it against extreme weather.

The data centers needed to accommodate the artificial intelligence boom are still in the regulatory planning stages, Pridemore said. The Data Center Coalition, which represents Big Tech firms and data center developers, has said its members are committed to paying their fair share.

But growing evidence suggests that some Americans’ electricity costs are rising to subsidize the massive energy needs of Big Tech as the U.S. competes in a race against China for artificial intelligence superiority.

Data and analytics firm Wood Mackenzie recently published a report that suggested 20 proposed or effective specialized rates for data centers in 16 states it studied aren’t nearly enough to cover the cost of a new natural gas power plant.

In other words, unless utilities negotiate higher specialized rates, other ratepayer classes — residential, commercial and industrial — are likely paying for data center power needs.

Meanwhile, in June, Monitoring Analytics, the independent market watchdog for the mid-Atlantic grid, produced research showing that 70 percent — or $9.3 billion — of last year’s increased electricity cost was the result of data center demand.

Last year, five governors led by Pennsylvania’s Josh Shapiro began pushing back against power prices set by mid-Atlantic grid operator PJM Interconnection after that amount spiked nearly sevenfold. They warned of customers “paying billions more than is necessary.”

PJM has yet to propose ways to guarantee that data centers pay their share, but Monitoring Analytics is floating the idea that data centers should be required to procure their own power.

In a filing last month, it said that would avoid a “massive wealth transfer” from average people to tech companies.

At least a dozen states are eyeing ways to make data centers pay higher local transmission costs.

In Oregon, a data center hot spot, lawmakers in June passed legislation ordering state utility regulators to develop new (presumably higher) power rates for data centers.

The Oregon Citizens’ Utility Board says there is clear evidence that costs to serve data centers are being spread among all customers — at a time when some electric bills there are up 50 percent over the past four years and utilities are disconnecting more people than ever.

New Jersey’s governor last month signed legislation commissioning state utility regulators to study whether ratepayers are being hit with “unreasonable rate increases” to connect data centers and to develop a specialized rate to charge data centers.

In some other states, like Texas and Utah, governors and lawmakers are trying to avoid a supply-and-demand crisis that leaves ratepayers on the hook — or in the dark.

In Indiana, state utility regulators approved a settlement between Indiana Michigan Power Co., Amazon, Google, Microsoft and consumer advocates that sets parameters for data center payments for service.

Kerwin Olsen of the Citizens Action Council of Indiana, a consumer advocacy group, signed the settlement and called it a “pretty good deal” that contained more consumer protections than what state lawmakers passed.

But state law doesn’t force large power users like data centers to publicly reveal their electric usage, he said, so pinning down whether they’re paying their fair share of transmission costs “will be a challenge.”

In a March report, the Environmental and Energy Law Program at Harvard University questioned the motivation of utilities and regulators to shield ratepayers from footing the cost of electricity for data centers.

Both utilities and states have incentives to attract big customers like data centers, it said.

To do it, utilities — which must get their rates approved by regulators — can offer “special deals to favored customers” like a data center and effectively shift the costs of those discounts to regular ratepayers, the authors wrote. Many state laws can shield disclosure of those rates, they said.

In Pennsylvania, an emerging data center hot spot, the state utility commission is drafting a model rate structure for utilities to consider adopting. An overarching goal is to get data center developers to put their money where their mouth is.

“We’re talking about real transmission upgrades, potentially hundreds of millions of dollars,” commission Chairman Stephen DeFrank said. “And that’s what you don’t want the ratepayer to get stuck paying for.”

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HARRISBURG, Pa. — The explosive growth of the data centers needed to meet Americans’ fast-rising demand for artificial intelligence and cloud computing platforms has spurred states to dangle incentives in hopes of landing an economic bonanza, but it’s also eliciting pushback from lawmakers and communities.

Activity in state legislatures — and competition for data centers — has been brisk in recent months, amid an intensifying build-out of energy-hungry data centers and a search for new sites that was ignited by the late 2022 debut of OpenAI’s ChatGPT.

Many states are offering financial incentives worth tens of millions of dollars. In some cases, those incentives are winning approval, but only after fights or efforts to require data center operators to pay for their own electricity or meet energy efficiency standards.

Some state lawmakers have contested the incentives in places where a heavy influx of massive data centers has caused friction with neighboring communities. In large part, the fights revolve around the things that tech companies and data center developers seem to most want: large tracts of land, tax breaks and huge volumes of electricity and water.

And their needs are exploding in size: from dozens of megawatts to hundreds of megawatts and from dozens of acres up to hundreds of acres for large-scale data centers sometimes called hyperscalers.

While critics say data centers employ relatively few people and contribute to little long-term job creation, their advocates say they require a huge number of construction workers, spend enormous sums on goods and local vendors, and generate strong tax revenues for local governments.

In Pennsylvania, lawmakers are writing legislation to fast-track permitting for data centers. The state is viewed as an up-and-coming data center destination, but there is also a sense that Pennsylvania is missing out on billions of dollars in investment that’s landing in other states.

“Pennsylvania has companies that are interested, we have a labor force that is capable, and we have a lot of water and natural gas,” state Rep. Eric Nelson said. “That’s the winning combination. We just have a bureaucratic process that won’t open its doors.”

Kansas approved a new sales tax exemption on goods to build and equip data centers, while Kentucky and Arkansas expanded pre-existing exemptions so that more projects will qualify.

Michigan approved one that carries some protections, including requirements to use municipal utility water and clean energy, meet energy-efficiency measures and ensure that it pays for its own electricity.

Such tax exemptions are now so widespread — about three dozen states have some version of it — that it is viewed as a must-have for a state to compete.

“It’s often a nonstarter if you don’t have them, for at least the hyperscalers,” said Andy Cvengros, who helps lead the data center practice at commercial real estate giant JLL. “It’s just such a massive impact on the overall spend of the data center.”

In West Virginia, lawmakers approved a bill to create “microgrid” districts free from local zoning and electric rate regulations where data centers can procure power from stand-alone power plants.

Gov. Patrick Morrisey, a Republican, called the bill his “landmark policy proposal” for 2025 to put West Virginia “in a class of its own to attract new data centers and information technology companies.”

Utah and Oklahoma passed laws to make it easier for data center developers to procure their own power supply without going through the grid while Mississippi rolled out tens of millions of dollars in incentives last year to land a pair of Amazon data centers.

In South Carolina, Gov. Henry McMaster signed legislation earlier this month that eased regulations to accelerate power plant construction to meet demand from data centers, including a massive Facebook facility.

The final bill drew a fight from some lawmakers who say they worry about data centers using disproportionate amounts of water, taking up large tracts of land and forcing regular ratepayers to finance the cost of new power plants.

“I do not like that we’re making customers pay for two power plants when they only need one,” Senate Majority Leader Shane Massey told colleagues during floor debate.

Still, state Sen. Russell Ott suggested that a data center operator should be viewed like any other electricity customer because it reflects a society that is “addicted” to electricity and is “filling that need and that desire of what we all want. And we’re all guilty of it. We’re all responsible for it.”

In data center hotspots, some lawmakers are pushing back.

Lawmakers in Oregon are advancing legislation to order utility regulators to ensure data centers pay the cost of power plants and power lines necessary to serve them.

Georgia lawmakers are debating a similar bill.

In Virginia, the most heavily developed data center zone in the U.S., Gov. Glenn Youngkin vetoed a bill that would have forced more disclosures from data center developers about their site’s noise pollution and water use.

In Texas, which endured a deadly winter blackout in 2021, lawmakers are wrestling with how to protect the state’s electric grid from fast-growing data center demand.

Lawmakers still want to attract data centers, but a bill that would speed up direct hookups between data centers and power plants has provisions that are drawing protests from business groups.

Those provisions would give utility regulators new authority to approve those agreements and order big electric users such as data centers to switch to backup generators in a power emergency.

Walt Baum, the CEO of Powering Texans, which represents competitive power plant owners, warned lawmakers that those provisions might be making data center developers hesitant to do business in Texas.

“You’ve seen a lot of new announcements in other states and over the last several months and not as much here in Texas,” Baum told House members during a May 7 committee hearing. “I think everybody right now is in a waiting pattern and I worry that we could be losing to other states while that waiting pattern is happening.”

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HARRISBURG, Pa. — Coal-fired power plants, long an increasingly money-losing proposition in the U.S., are becoming more valuable now that the suddenly strong demand for electricity to run Big Tech‘s cloud computing and artificial intelligence applications has set off a full-on sprint to find new energy sources.

President Donald Trump — who has pushed for U.S. “energy dominance” in the global market and suggested that coal can help meet surging power demand — is wielding his emergency authority to entice utilities to keep older coal-fired plants online and producing electricity.

While some utilities were already delaying the retirement of coal-fired plants, the scores of such plants that have been shut down in the past couple years — or will be shut down in the next couple years — are the object of growing interest from tech companies, venture capitalists, states and others competing for electricity.

That’s because they have a very attractive component: high-voltage lines connecting to the electricity grid that they aren’t using anymore and that a new power plant could use.

That ready-to-go connection could enable a new generation of power plants — gas, nuclear, wind, solar or even battery storage — to help meet the demand for new power sources more quickly.

For years, the bureaucratic nightmare around building new high-voltage power lines has ensnared efforts to get permits for such interconnections for new power plants, said John Jacobs, an energy policy analyst for the Washington, D.C.-based Bipartisan Policy Center.

“They are very interested in the potential here,” he said. “Everyone sort of sees the writing on the wall for the need for transmission infrastructure, the need for clean, firm power, the difficulty with siting projects, and the value of reusing brownfield sites.”

Rising power demand, dying coal plants

Coincidentally, the pace of retirements of the nation’s aging coal-fired plants had been projected to accelerate at a time when electricity demand is rising for the first time in decades.

The Department of Energy, in a December report, said its strategy for meeting that demand includes reusing coal plants, which have been unable to compete with a flood of cheap natural gas while being burdened with tougher pollution regulations aimed at its comparatively heavy emissions of greenhouse gases.

There are federal incentives as well — tax credits and loan guarantees, for instance — that encourage the redevelopment of retired coal-fired plants into new energy sources.

Todd Snitchler, president and CEO of the Electric Power Supply Association, which represents independent power plant owners, said he expects Trump’s executive orders will mean some coal-fired plants run longer than they would have — but that they are still destined for retirement.

Time is of the essence in getting power plants online.

Data center developers are reporting a yearlong wait in some areas to connect to the regional electricity grid. Rights-of-way approvals to build power lines can also be difficult to secure, given objections by neighbors who may not want to live near them.

Stephen DeFrank, chairman of the Pennsylvania Public Utility Commission, said he believes rising energy demand has made retiring coal-fired plants far more valuable.

That’s especially true now that the operator of the congested mid-Atlantic power grid has re-configured its plans to favor sites like retired coal-fired plants as a shortcut to meet demand, DeFrank said.

“That’s going to make these properties more valuable because now, as long as I’m shovel ready, these power plants have that connection already established, I can go in and convert it to whatever,” he said.

Gas, solar and more at coal power sites

In Pennsylvania, most conversions are likely to be natural gas because Pennsylvania sits atop the prolific Marcellus Shale reservoir, DeFrank said.

In Homer City, a coal-fired plant that had operated for 54 years recently saw its smokestacks and cooling towers demolished. The owners are planning to build a $10 billion natural gas production facility to power data centers on campus. It would be the nation’s third-largest power generator.

In states across the South, utilities are replacing retiring or retired coal units with gas. That includes a plant owned by the Tennessee Valley Authority; a Duke Energy project in North Carolina; and a Georgia Power plant.

The high-voltage lines at retired coal plants on the Atlantic Coast in New Jersey and Massachusetts were used to connect offshore wind turbines to electricity grids.

In Alabama, the site of a coal-fired plant shuttered in 2019, Plant Gorgas, will become home to Alabama Power’s first utility-scale battery energy storage plant.

Texas-based Vistra, meanwhile, is in the process of installing solar panels and energy storage plants at a fleet of retired and still-operating coal-fired plants it owns in Illinois, thanks in part to state subsidies approved there in 2021.

Don’t forget about the potential of nuclear

Nuclear is also getting a hard look.

In Arizona, lawmakers are advancing legislation to make it easier for three utilities there — Arizona Public Service, Salt River Project and Tucson Electric Power — to put advanced nuclear reactors on the sites of retiring coal-fired plants.

At the behest of Indiana’s governor, Purdue University studied how the state could attract a new nuclear power industry. In its November report, it estimated that reusing a coal-fired plant site for a new nuclear power plant could reduce project costs by between 7 percent and 26 percent.

The Bipartisan Policy Center, in a 2023 study before electricity demand began spiking, estimated that nuclear plants could cut costs from 15 percent to 35 percent by building at a retiring coal plant site, compared to building at a new site.

Even building next to the coal plant could cut costs by 10 percent by utilizing transmission assets, roads and buildings while avoiding some permitting hurdles, the center said.

That interconnection was a major driver for Terrapower when it chose to start construction in Wyoming on a next-generation nuclear power plant next to PacifiCorp’s coal-fired Naughton Power Plant.

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Intel has shut down plans to build a $700 million research and development mega lab in Hillsboro. Construction had been set to begin this year at the Jones Farm campus in Hillsboro.

The 200,000-square-foot lab would have been used to develop more sustainable solutions for data centers in areas such as heating, cooling and water usage. Last year, Intel introduced the technology industry’s first open intellectual property immersion liquid cooling solution and reference design.

“We remain dedicated to fostering innovation across multiple business lines in Oregon, including manufacturing, data center, software and others,” Intel Communications Manager Elly Akopyan stated in an email. “As we accelerate our strategy and respond to the current demand profile environment, we are looking to reduce costs and increase efficiencies through multiple initiatives.”

Intel has not made any announcements about other projects like the mega lab.

This includes exploring more cost-effective real estate options to continue the data center research and development work in Oregon that is already in progress.

Intel is aiming to reduce expenses by $3 billion this year and billions of dollars more in years to come. The cost cutting may impact thousands of Intel workers, according to a Bloomberg report.

As discussed in Intel’s 2022 third-quarter earnings call, the company is working to accelerate its strategy while navigating a challenging macro-economic environment.

“We are focused on identifying cost reductions and efficiency gains through multiple initiatives, including some business and function-specific workforce reductions in areas across the company,” Akopyan stated.

Intel has more than 22,000 employees in Oregon. The company is continuing to invest in core areas, including U.S.-based manufacturing operations, Akopyan stated, to ensure it is well-positioned for long-term growth.

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