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Released August 19, 2025 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--As time progresses, increasing numbers of proposals for data centers are presented to U.S. communities and utilities, staking claim to resources such as land, water and power. The power loads demanded from multiple data center facilities add up quickly, with some utilities reporting multiple gigawatts of proposals coming to them each quarter. Power providers, in particular, face challenges attempting to forecast exactly how many of these proposed data centers actually will see the light of day, without overbuilding power supplies and leaving existing customers holding the bill. Major U.S. utilities such as American Electric Power Company Incorporated (AEP) (Columbus, Ohio), Xcel Energy Incorporated (Minneapolis, Minnesota) and Public Service Enterprise Group Incorporated (PSEG) (Newark, New Jersey) have discussed elements of their plans to accommodate the load growth from data centers.
In its second-quarter results issued earlier this month, PSEG, the largest power and gas utility in New Jersey, said it had seen its large-load pipeline (substantial power needs from a single entity) grow 47% from the first quarter, rising from 6.4 gigawatts (GW) to 9.4 GW within three months. In the company's accompanying conference call, PSEG Chief Executive Officer (CEO) Ralph LaRosa said this growth came primarily from data centers. "There are a few other customers in that bucket, but I would say the bulk of that, if not over 90% of that, is all data center-related," he said. However, such figures come with a caveat: LaRosa went on to say that he expected only 10% to 20% of those requests to actually come online.
Executives at AEP, which operates in 11 states, in that company's earnings call said that developers are looking to connect 190 GW to AEP's grid, more than five times the utility's current generating capacity. CEO William Fehrman stated that while only a fraction of this would come online, "Demand for power is growing at a pace I have not seen in my 45-year energy career." AEP is projecting a firm 24 GW of new load to come online by 2030, all of which is backed by customer agreements.
Going a bit further back in time, Xcel reported late last year that it had received 8.9 GW of requests from data center companies, expecting to secure about 25% of this down the road. An article in The Colorado Sun this month reports that Xcel has 5.8 GW of pending data center applications in Colorado, where it presently has 6.2 GW of generating capacity.
While the future data center loads that these utilities may serve are probably only a fraction of the currently active load applications, nevertheless substantial growth in power demand is on the horizon, and to meet it, companies are beginning to spend more, increasing plans for capital expenditures. Xcel last year, for example, unveiled a $45 billion capital plan to strengthen transmission, provide increased generation and make more room for renewables. Xcel estimates its Colorado data center load will be 8.5 GW by 2040, projecting a potential $22 billion spend in the state to meet this, which has some industry watchdogs questioning whether the utility might overbuild new generation, leaving existing ratepayers on the hook.
Industry watchdog Colorado Energy Consumers (CEC) said in a filing to state regulators, "Without caution, ratepayers face significant risk of bearing the costs of stranded assets." The state's Public Utilities Commission (PUC) has also expressed doubts about the need for such a substantial buildout. PUC Commissioner Megan Gilman said at a meeting earlier this month, "This is a really massive load forecast far in excess of what we've seen on the system, not to say it can't happen," adding, "the vast majority of that forecast is far from certain." In its filing with the PUC, CEC pointed out the volatility of the market, noting that between October 2024 and May 2025, seven potential data customers backed out of 4 GW of load requests, only to be replaced with more than a dozen other requests totaling 3.5 GW.
In New Jersey, PSEG recently reaffirmed its capital spending plan of $21 billion to $24 billion through 2029, in large part supporting grid modernization, like Xcel. The company announced it is tweaking its nuclear operations to help support data center growth. This includes a 200-megawatt (MW) uprate at its Salem nuclear power plant in Salem County, New Jersey. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more by viewing the related project reports. In addition, PSEG is expanding the fuel cycles at its Hope Creek nuclear plant, also in Salem County, from 18 to 24 months to decrease the plant's downtime.
Earlier this summer, AEP announced it would raise its five-year capital spending plan from $54 billion to $70 billion to help cover growing demand. Spanning multiple grid operators, AEP said that about half of the 24 GW estimated load growth by 2030 is on the Electric Reliability Council of Texas (ERCOT) grid and 9 GW on the PJM Interconnection. Like Xcel and PSEG, a majority of PSEG's active projects are for strengthening transmission, but a few high-dollar generation projects also are making their way onto the company's project roster. In December, AEP announced plans to establish a 450-MW natural gas-fired plant on the ERCOT grid at the site of a previous lignite-fired plant in Hallsville, Texas, in the east of the state. The plant is expected to begin operating in 2027. Subscribers can learn more by viewing the project report. Other AEP projects are dotted throughout the U.S. to help meet load growth.
While utilities almost certainly face large demand growth from data centers added to their systems, estimating how many of the currently pending applications actually will reach fruition can prove difficult. To insulate themselves, utilities have begun to request guidelines requiring large users such as data centers to pay for a minimum percentage of the energy that they're subscribed to, even if they use less. The Ohio PUC last month approved such a request for AEP, helping ensure large-load companies pay at least 85% of their subscribed power. The new regulation joins similar provisions, both already active and up for decisions, in the U.S. and may become more common in the future as states, power grids and utilities seek to navigate the uncertainties brought about by the influx of large-load users, the vast majority of which are for the data centers that have become an increasingly important part of daily life in the U.S.
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) 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).
In its second-quarter results issued earlier this month, PSEG, the largest power and gas utility in New Jersey, said it had seen its large-load pipeline (substantial power needs from a single entity) grow 47% from the first quarter, rising from 6.4 gigawatts (GW) to 9.4 GW within three months. In the company's accompanying conference call, PSEG Chief Executive Officer (CEO) Ralph LaRosa said this growth came primarily from data centers. "There are a few other customers in that bucket, but I would say the bulk of that, if not over 90% of that, is all data center-related," he said. However, such figures come with a caveat: LaRosa went on to say that he expected only 10% to 20% of those requests to actually come online.
Executives at AEP, which operates in 11 states, in that company's earnings call said that developers are looking to connect 190 GW to AEP's grid, more than five times the utility's current generating capacity. CEO William Fehrman stated that while only a fraction of this would come online, "Demand for power is growing at a pace I have not seen in my 45-year energy career." AEP is projecting a firm 24 GW of new load to come online by 2030, all of which is backed by customer agreements.
Going a bit further back in time, Xcel reported late last year that it had received 8.9 GW of requests from data center companies, expecting to secure about 25% of this down the road. An article in The Colorado Sun this month reports that Xcel has 5.8 GW of pending data center applications in Colorado, where it presently has 6.2 GW of generating capacity.
While the future data center loads that these utilities may serve are probably only a fraction of the currently active load applications, nevertheless substantial growth in power demand is on the horizon, and to meet it, companies are beginning to spend more, increasing plans for capital expenditures. Xcel last year, for example, unveiled a $45 billion capital plan to strengthen transmission, provide increased generation and make more room for renewables. Xcel estimates its Colorado data center load will be 8.5 GW by 2040, projecting a potential $22 billion spend in the state to meet this, which has some industry watchdogs questioning whether the utility might overbuild new generation, leaving existing ratepayers on the hook.
Industry watchdog Colorado Energy Consumers (CEC) said in a filing to state regulators, "Without caution, ratepayers face significant risk of bearing the costs of stranded assets." The state's Public Utilities Commission (PUC) has also expressed doubts about the need for such a substantial buildout. PUC Commissioner Megan Gilman said at a meeting earlier this month, "This is a really massive load forecast far in excess of what we've seen on the system, not to say it can't happen," adding, "the vast majority of that forecast is far from certain." In its filing with the PUC, CEC pointed out the volatility of the market, noting that between October 2024 and May 2025, seven potential data customers backed out of 4 GW of load requests, only to be replaced with more than a dozen other requests totaling 3.5 GW.
In New Jersey, PSEG recently reaffirmed its capital spending plan of $21 billion to $24 billion through 2029, in large part supporting grid modernization, like Xcel. The company announced it is tweaking its nuclear operations to help support data center growth. This includes a 200-megawatt (MW) uprate at its Salem nuclear power plant in Salem County, New Jersey. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more by viewing the related project reports. In addition, PSEG is expanding the fuel cycles at its Hope Creek nuclear plant, also in Salem County, from 18 to 24 months to decrease the plant's downtime.
Earlier this summer, AEP announced it would raise its five-year capital spending plan from $54 billion to $70 billion to help cover growing demand. Spanning multiple grid operators, AEP said that about half of the 24 GW estimated load growth by 2030 is on the Electric Reliability Council of Texas (ERCOT) grid and 9 GW on the PJM Interconnection. Like Xcel and PSEG, a majority of PSEG's active projects are for strengthening transmission, but a few high-dollar generation projects also are making their way onto the company's project roster. In December, AEP announced plans to establish a 450-MW natural gas-fired plant on the ERCOT grid at the site of a previous lignite-fired plant in Hallsville, Texas, in the east of the state. The plant is expected to begin operating in 2027. Subscribers can learn more by viewing the project report. Other AEP projects are dotted throughout the U.S. to help meet load growth.
While utilities almost certainly face large demand growth from data centers added to their systems, estimating how many of the currently pending applications actually will reach fruition can prove difficult. To insulate themselves, utilities have begun to request guidelines requiring large users such as data centers to pay for a minimum percentage of the energy that they're subscribed to, even if they use less. The Ohio PUC last month approved such a request for AEP, helping ensure large-load companies pay at least 85% of their subscribed power. The new regulation joins similar provisions, both already active and up for decisions, in the U.S. and may become more common in the future as states, power grids and utilities seek to navigate the uncertainties brought about by the influx of large-load users, the vast majority of which are for the data centers that have become an increasingly important part of daily life in the U.S.
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) 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).
