US Utilities See Rise in Data Center Deals Amid Growing Demand
U.S. utilities are securing power supply agreements with data-center operators as the rise of artificial intelligence drives a surge in electricity demand, positioning these utilities for higher profits in the coming quarters.
Data centers are projected to account for 8% of U.S. electricity consumption by 2030, up from 3% in 2022, according to a Goldman Sachs report from May.
Here are some key deals announced by utilities in 2024 and 2025: PPL’s Kentucky unit, Louisville Gas and Electric Company, has signed a power supply agreement with PowerHouse Data Centers and Poe Companies, which are developing a 400 megawatt (MW) data center campus in Louisville. The first 130 MW is expected to be available by October 2026.
Constellation Energy has struck an exclusive deal with Microsoft to restart one of the units at the Three Mile Island nuclear plant in Pennsylvania. The utility will provide 835 MW of energy to Microsoft’s data centers, marking the first restart of a U.S. nuclear power plant after its shutdown.
Ameren has signed a supply agreement with a data center for 250 MW of power and has secured expansion commitments and new contracts for over 85 MW of additional load from smaller data centers and other industries across Missouri and Illinois.
Alliant Energy has entered multiple power supply agreements with data centers, though it did not disclose specifics.
Exelon is currently in the engineering phase for more than 5 gigawatts (GW) of data center capacity, with some customers placing deposits for transmission and breakers, according to the company during a post-earnings call.
American Electric Power has signed letters of intent to provide power to an additional 15 GW of data centers by 2030.
Xcel Energy will supply electricity to Meta Platforms’ data center in Minnesota, which is expected to come online in late summer 2025.
Entergy has gained legislative approval for investment in transmission and generation to support Amazon’s new Amazon Web Services (AWS) facility in Mississippi and has signed a deal with Meta to power the company’s largest data center in Louisiana.
Pinnacle West Capital has over 4,000 MW of committed data center customers, in addition to more than 10,000 data center requests it has received.
AES has signed an agreement with Google for 310 MW to power its Ohio data centers and expanded its partnership with Google, securing a 15-year power purchase agreement for 727 MW in Texas. Talen Energy has signed a deal to supply electricity to Amazon’s AWS and its 960 MW data center campus in Pennsylvania.
NextEra’s renewables segment has added 3 GW worth of renewables and storage projects in Q2 2024, including Google’s 860 MW demand for its data center power.
NorthWestern Energy has signed a letter of intent to provide energy services to a data center developer in Montana. The energy service load is expected to reach a minimum of 50 MW by 2027, growing to 250 MW or more by 2029.
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