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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Electricity demand will rise much faster than overall energy growth in the coming decades, underscoring the need for diversified energy sources, according to an analysis released Wednesday.

The report by the International Energy Agency ����������renewable energy, led by solar power, will grow faster than any other major source in the next few years. One scenario the agency anticipates is coal and oil demand peaking globally by the end of this decade — but the group also said global oil and gas demand could continue growing until 2050. The report noted that many natural gas projects were approved in 2025, due to changes in U.S. policy, indicating worldwide supply will rise even as questions remain about how it will be used. Meanwhile, global nuclear power capacity is set to increase by at least a third by 2035 after being stagnant for years.

The release of the annual World Energy Outlook coincided with U.N. negotiations in Brazil, where global leaders this week are calling for ways to curb climate change.

The IEA says building greater resilience in energy systems is especially important as data centers, heating and cooling, electrification and more drive energy demand. Investment in data centers is expected to reach $580 billion this year, exceeding investment in the oil supply, according to the report.

Growing economies including India and nations in Southeast Asia, the Middle East, Africa and Latin America, will “increasingly shape energy market dynamics in the years,” the IEA said, noting their potential for solar power.

China, meanwhile, has accounted for half the global growth in demand for oil and gas, and more than half for electricity, since 2010.

“In a break from the trend of the past decade, the increase in electricity consumption is no longer limited to emerging and developing economies,” IEA Executive Director Fatih Birol stated in a release. Electricity use is also rising in advanced economies, according to Birol.

Nations are grappling with meeting demand while preparing for the risks brought on by climate change. The IEA says the world is falling short on universal energy access and climate change goals. Around 730 million people still live without electricity, according to the IEA, and despite progress, nearly one-quarter of the global population still relies on inefficient cooking methods that hurt their health or the environment. 2024 was also the hottest year on record.

Nations should diversify their energy sources and cooperate to expand supply chains for critical minerals used to make things like batteries for electric vehicles and components for solar and wind power generation, the IEA said. This also includes making quick improvements to the grid, energy storage and broader infrastructure.

“When we look at the history of the energy world in recent decades, there is no other time when energy security tensions have applied to so many fuels and technologies at once,” Birol said. “With energy security front and (center) for many governments, their responses need to consider the synergies and trade-offs that can arise with other policy goals — on affordability, access, competitiveness and climate change.”

The IEA brought back an approach to this year’s outlook using what it calls current policies. It used this approach in 2019 to weigh different possible global energy outcomes, before better aligning with clean energy transition plans. This year the agency’s outlook includes the possibility of essentially regressing on the phase-out of fossil fuels.

In a conference call Wednesday, Birol said: “We will still use oil. We will still use gas. But the growth of electricity demand is spectacular.”

He noted the role transportation plays in accounting for 45 percent of global oil consumption, for example. “How the electrification of the transportation takes place, especially in countries beyond China and Europe, will determine the shape of the oil demand and growth.”

Wednesday’s edition of the yearly report is the first released since the start of U.S. President Donald Trump’s second term. Trump’s administration has for a second time opted out of the Paris agreement, rolled back dozens of climate regulations, slashed federal support for renewable energies such as wind and solar power and is reversing the “endangerment finding” that sits at the core of U.S. climate policy.

Trump has pledged his support instead to the fossil fuel industry, investing in coal and loosening restrictions on pollution.

But energy analysts said the shift to clean power is happening regardless of climate policy around the world.

“The evidence on the ground is overwhelming,” said Dave Jones, chief analyst at global energy think tank Ember. “EV sales are taking off in many emerging countries, solar is permeating even through the Middle East. Renewables and electrification will dominate the future.”

Maria Pastukhova, energy transition program lead at climate change think tank E3G, said the report makes “the choices for the global energy system and the global economy unambiguous.”

Others, however, were critical of how the outlook addressed oil and gas. Ben Backwell, CEO of the Global Wind Energy Council, said the outlook does not fully capture the momentum in renewables, and that it should have emphasized the trajectory for renewable energy is accelerating, driven by the decreasing cost of the technologies, strong policy support and the move toward electrification.

“We’re accelerating,” he added. “You can see it all around the world and we can see it in our numbers for last year, but also in our numbers for the first half of this year. It looks very, very exciting, both for wind and for solar, in fact, and for next year, even more so.”

The IEA addressed some of the criticism in the call Wednesday. It said that it sees differences economically, politically and regarding clean energy efforts across the globe, and that its analysis tries to account for those differences.

“In a nutshell, the IEA is backsliding,” said Stephan Singer, global energy senior adviser at CAN International, a global network of environmental organizations. “As a global think tank, the IEA has largely failed to represent where most countries in the (Organisation for Economic Co-operation and Development) and the developing world are, as they’re supporting net zero emissions with 98 percent CO2 emissions reductions by mid-century.”

Editor’s note: Associated Press reporters Jennifer McDermott in Providence, Rhode Island, and Sibi Arasu in Bengaluru contributed to this report.

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