The US electric power sector is eager to capitalize on the growing demand for artificial intelligence (AI) data centers, driven by the need for faster computing and energy efficiency. However, regulatory uncertainty from Washington poses a challenge.
President Trump’s administration has sent mixed signals about its support for basic infrastructure required to meet AI data center demands. The cancellation of loan guarantees for transmission lines and efforts to block federal land use for wind energy have created uncertainty.
Despite this, utility executives are optimistic about the opportunities ahead. “The size and scale of what we’re seeing now is unlike anything we’ve seen,” said Pacific Gas & Electric executive Mike Medeiros. Load growth has increased significantly, with data centers expected to make up half of projected US growth through 2030.
The power industry’s hunger for growth stems from the need to spread fixed costs across a smaller customer base. Utilities are eager to capture demand from AI, which will drive growth in the sector over the next decade. Electric vehicles and buildings will also contribute to this growth.
However, regulatory uncertainty and the potential risks of overbuilding pose challenges. “Nobody has any idea how much demand is going to be from AI in five years,” said Jonathan Koomey, a researcher. Solutions exist, such as requiring data centers to commit to buying fixed amounts of power for 14 years to protect against unexpected efficiencies.
Utilities argue that they will be able to charge data centers the right amount to recoup their costs. California regulators have approved a new rate structure for PG&E, allowing it to collect payment in advance to cover connection costs. The industry’s response to this trend will help shape the future of energy policy and its impact on the environment.
As the power sector continues to adapt to the growing demand for AI data centers, regulatory uncertainty remains a significant challenge. However, with the right strategies in place, utilities can capitalize on this emerging opportunity while minimizing risks.
Source: https://www.politico.com/news/magazine/2025/08/05/energy-industry-ai-boom-debra-kahn-column-00492879