Released October 22, 2025 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--State regulatory panels have emerged as a powerful limiting force on developers' most expansive plans to build new data centers and other large loads, such as cryptocurrency mines, which could drive up electric load growth and capital expenditures (capex) as well as customer electric prices and bills. In at least one case, the existence of a specific new electric price plan requiring large loads to make a significant binding financial commitment to its local utility appears to have cut projected demand growth more than 50%.
Since the COVID-19 pandemic, which started in 2020, electricity providers have steadily increased planned capital outlays to build new generation and infrastructure to meet projected future electric demand from planned large, energy-intensive campuses such as data centers, cryptocurrency operations and advanced manufacturers. Companies seeking to build large load centers have unveiled aggressive plans to build data centers in Virginia, Arizona, Texas, Georgia and elsewhere to meet burgeoning demand for artificial intelligence (AI) and other purposes. For more on that, see September 22, 2025, article - Central U.S. Races to Meet Energy Demand from Data Center Boom; September 2, 2025, article - WEC Boosts Capital Plan, Confirms No More Coal After 2032; April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex; and February 10, 2020, article - Data Center Buildout Expected to Accelerate Rapidly in North America.
Companies plan to make investments totaling about $885 billion in approximately 1,583 data center capital projects in the U.S. over the three-year period between January 2025 and December 2027. The states with the biggest planned data center capex outlays are Texas, Virginia, Georgia and Arizona. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for the project reports.
Click on the image at right to see an Industrial Info graphic of 10 states where developers plan to make the biggest capital investment to build new data centers between January 2025 and December 2027.
Those proposed outlays are about 14 times the $62.25 billion developers spent to construct 271 data center projects over the prior three-year period, January 2022-December 2024, according to IIR's GMI platform.
IIR does not expect all the proposed data centers to be built as proposed. Some will be delayed, others will be cancelled and still others will be added. This is an extremely dynamic sector of the U.S. economy.
By and large, electricity providers have responded with plans to build more generation and infrastructure, though some have cautioned against chasing every megawatt of proposed new load. For more on that, see August 20, 2025, article - Power Industry Considers Supply, Demand Options to Meet Future AI Power Demand. Plans for electric utilities to sharply increase capex to accommodate the new large loads have driven up, or threaten to drive up, electric bills around the country, sparking a backlash. Against this backdrop, some have asked if the buildout risks becoming a speculative bubble. For more information, see October 13, 2025, article - Data Centers: Is the Buildout Starting to Become a Bubble?
State regulatory panels are serving as a guardrail on the most dramatic plans to cover the U.S. landscape with data centers. State utility regulators are adopting specific price plans for large loads that are designed to winnow out the more speculative proposed campuses. Approximately 20 states have enacted large load pricing plans in recent years, and nearly a dozen more are considering such plans, according to a map prepared by the Smart Electric Power Alliance (Washington, D.C.). Many of those tariffs were finalized in 2025, though a few states, including Arkansas, Mississippi, Iowa and California, enacted them for specific utilities under their jurisdiction in prior years.
The large load price plan adopted by the Public Utilities Commission of Ohio (PUCO) (Columbus, Ohio) appears to have cut future large load electric growth by over 50%, to about 13 gigawatts (GW) from approximately 30 GW, for one electric utility, American Electric Power of Ohio. The large load price plan mandated charging prospective large load owners a minimum of 85% of the power that they requested, whether they used it or not, in effect placing the costs of capacity additions onto the businesses for which they were intended, rather than the average homeowner. The price plan went into effect in July of this year and will be in place for 12 years. Data center developers cried foul, but so far, their appeals have not been successful. For more on that, see October 2, 2025, article - New Ohio Rules Help Rein in Power Demand from State's Data Center Pipeline.
An AEP Ohio statemen said, "the data center (price plan) is working. The (price plan), through those financial commitments, ensures that data center operators are financially incentivized to accurately estimate their electricity needs. Those financial commitments also protect AEP Ohio's customers from shouldering the costs of infrastructure investments required to meet growing demand from data centers." That statement was first reported by trade news outlet Data Cener Dynamics.
Similar "pay as you go" plans have been enacted in parts of Texas, Arizona, Norh Carolina, Norh Dakota and Virginia. The elements of these plans vary from state to state. Several other jurisdictions are considering such plans. About a dozen states, including Colorado, New Mexico, Louisiana and South Carolina, are not considering any type of large load price plan, according to the Smart Power map.
Pennsylvania Public Utility Commission Chairperson Stephen DeFrank spoke for many utility regulators when, earlier his year, he said, "Balancing concerns like (price increases and economic growth) is one of the primary mandates of the commission." He made his comment as the panel voted unanimously to open a proceeding on how to charge large loads for the incremental capital and operating expenses they create for electric utilities. DeFrank said the job of the Pennsylvania PUC (Harrisburg, Pennsylvania) is to provide non-discriminatory access to public utilities, while guarding against undue burdens and costs for existing customers and risk to electric utilities.
Utility regulation of retail electric prices has been a state power for more than a century, unlike telecommunications or most oil and gas pipelines, which are primarily regulated at the federal level. For that reason, state regulators have jealously guarded their role as laboratories of regulation, a place where different approaches to common industry challenges and/or problems can be deployed, observed and modified as conditions warrant.
A national checkerboard pattern of large load electric regulation, with different rules for different states, is in the early stage of emerging. That likely will serve as a limiting force on the explosive, unregulated growth of data centers and AI processing capacity, which the Trump administration has made a priority. For more on that, see July 17, 2025, article - Big Talk of AI, Power Development at Pennsylvania Summit.
That checkerboard pattern may become a legal flashpoint between state and federal governments in the future, with uncertain prospects. The principle that states have the exclusive power to regulate retail electric rates within their boundaries is well established, though the federal government may try to trump that with claims of "national security" and the exigencies of the AI arms race. One thing seems clear: the risk of data centers being constructed willy nilly across the U.S., without regard to how they would affect the electric prices paid by homeowners and small businesses, appears unlikely in most states.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Since the COVID-19 pandemic, which started in 2020, electricity providers have steadily increased planned capital outlays to build new generation and infrastructure to meet projected future electric demand from planned large, energy-intensive campuses such as data centers, cryptocurrency operations and advanced manufacturers. Companies seeking to build large load centers have unveiled aggressive plans to build data centers in Virginia, Arizona, Texas, Georgia and elsewhere to meet burgeoning demand for artificial intelligence (AI) and other purposes. For more on that, see September 22, 2025, article - Central U.S. Races to Meet Energy Demand from Data Center Boom; September 2, 2025, article - WEC Boosts Capital Plan, Confirms No More Coal After 2032; April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex; and February 10, 2020, article - Data Center Buildout Expected to Accelerate Rapidly in North America.
Companies plan to make investments totaling about $885 billion in approximately 1,583 data center capital projects in the U.S. over the three-year period between January 2025 and December 2027. The states with the biggest planned data center capex outlays are Texas, Virginia, Georgia and Arizona. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for the project reports.
Those proposed outlays are about 14 times the $62.25 billion developers spent to construct 271 data center projects over the prior three-year period, January 2022-December 2024, according to IIR's GMI platform.
IIR does not expect all the proposed data centers to be built as proposed. Some will be delayed, others will be cancelled and still others will be added. This is an extremely dynamic sector of the U.S. economy.
By and large, electricity providers have responded with plans to build more generation and infrastructure, though some have cautioned against chasing every megawatt of proposed new load. For more on that, see August 20, 2025, article - Power Industry Considers Supply, Demand Options to Meet Future AI Power Demand. Plans for electric utilities to sharply increase capex to accommodate the new large loads have driven up, or threaten to drive up, electric bills around the country, sparking a backlash. Against this backdrop, some have asked if the buildout risks becoming a speculative bubble. For more information, see October 13, 2025, article - Data Centers: Is the Buildout Starting to Become a Bubble?
State regulatory panels are serving as a guardrail on the most dramatic plans to cover the U.S. landscape with data centers. State utility regulators are adopting specific price plans for large loads that are designed to winnow out the more speculative proposed campuses. Approximately 20 states have enacted large load pricing plans in recent years, and nearly a dozen more are considering such plans, according to a map prepared by the Smart Electric Power Alliance (Washington, D.C.). Many of those tariffs were finalized in 2025, though a few states, including Arkansas, Mississippi, Iowa and California, enacted them for specific utilities under their jurisdiction in prior years.
The large load price plan adopted by the Public Utilities Commission of Ohio (PUCO) (Columbus, Ohio) appears to have cut future large load electric growth by over 50%, to about 13 gigawatts (GW) from approximately 30 GW, for one electric utility, American Electric Power of Ohio. The large load price plan mandated charging prospective large load owners a minimum of 85% of the power that they requested, whether they used it or not, in effect placing the costs of capacity additions onto the businesses for which they were intended, rather than the average homeowner. The price plan went into effect in July of this year and will be in place for 12 years. Data center developers cried foul, but so far, their appeals have not been successful. For more on that, see October 2, 2025, article - New Ohio Rules Help Rein in Power Demand from State's Data Center Pipeline.
An AEP Ohio statemen said, "the data center (price plan) is working. The (price plan), through those financial commitments, ensures that data center operators are financially incentivized to accurately estimate their electricity needs. Those financial commitments also protect AEP Ohio's customers from shouldering the costs of infrastructure investments required to meet growing demand from data centers." That statement was first reported by trade news outlet Data Cener Dynamics.
Similar "pay as you go" plans have been enacted in parts of Texas, Arizona, Norh Carolina, Norh Dakota and Virginia. The elements of these plans vary from state to state. Several other jurisdictions are considering such plans. About a dozen states, including Colorado, New Mexico, Louisiana and South Carolina, are not considering any type of large load price plan, according to the Smart Power map.
Pennsylvania Public Utility Commission Chairperson Stephen DeFrank spoke for many utility regulators when, earlier his year, he said, "Balancing concerns like (price increases and economic growth) is one of the primary mandates of the commission." He made his comment as the panel voted unanimously to open a proceeding on how to charge large loads for the incremental capital and operating expenses they create for electric utilities. DeFrank said the job of the Pennsylvania PUC (Harrisburg, Pennsylvania) is to provide non-discriminatory access to public utilities, while guarding against undue burdens and costs for existing customers and risk to electric utilities.
Utility regulation of retail electric prices has been a state power for more than a century, unlike telecommunications or most oil and gas pipelines, which are primarily regulated at the federal level. For that reason, state regulators have jealously guarded their role as laboratories of regulation, a place where different approaches to common industry challenges and/or problems can be deployed, observed and modified as conditions warrant.
A national checkerboard pattern of large load electric regulation, with different rules for different states, is in the early stage of emerging. That likely will serve as a limiting force on the explosive, unregulated growth of data centers and AI processing capacity, which the Trump administration has made a priority. For more on that, see July 17, 2025, article - Big Talk of AI, Power Development at Pennsylvania Summit.
That checkerboard pattern may become a legal flashpoint between state and federal governments in the future, with uncertain prospects. The principle that states have the exclusive power to regulate retail electric rates within their boundaries is well established, though the federal government may try to trump that with claims of "national security" and the exigencies of the AI arms race. One thing seems clear: the risk of data centers being constructed willy nilly across the U.S., without regard to how they would affect the electric prices paid by homeowners and small businesses, appears unlikely in most states.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
