President Donald Trump gathered tech leaders at the White House this week to tackle a mounting energy dilemma: data centers.
Tech companies want to build more and more of these energy-hungry facilities, but how many will actually come online, and how much power they’ll use, remains uncertain. Utilities are proposing to construct new power sources — mostly fossil-gas power plants — under the assumption that a deluge of data centers is coming.
But if those data centers never get built or close up shop, everyday utility customers could be stuck footing the bill for tons of unnecessary, polluting power infrastructure.
It’s a problem both Democratic and Republican leaders are now trying to prevent.
Many states have been looking to tackle data center uncertainty through “large load tariffs,” Canary Media’s Jeff St. John reports. These special utility rates and requirements attempt to hold companies responsible for supplying or buying their own power, though few have been implemented, and the results are mixed.
Similar concepts popped up in the “ratepayer protection pledge” that Trump unveiled in a Wednesday meeting that included leaders from Amazon, Google, OpenAI, and other big tech companies. The leaders all signed on to build and pay for the power and transmission infrastructure their data centers need, whether or not they use that power; to coordinate with grid operators on reliability; and to invest in the communities where they build. In exchange, Trump promised to speed permitting for data centers’ energy projects, though much of that authority rests with states.
Those tech companies’ pledges would be a big deal — if the federal government had any power to enforce them. Numerous environmental and consumer advocates have since called out Trump’s toothless promise.
“We are long overdue for real protections from power-hungry data centers that are driving up power prices and increasing pollution in our communities, but this pledge is like asking the fox to guard the hen house,” Jeremy Fisher, the Sierra Club’s principal adviser on climate and energy, said in a statement. “Data center developers have proven time and again that they’re interested in protecting their bottom line only. This is a pinky promise, nothing more.”
So if it’s not an enforceable or actionable plan, what is it? Trump may have summed it up best himself, when talking about data centers and the tech companies building them during Wednesday’s meeting: “They need some PR help.”
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What turmoil in Iran means for energy
The war unfolding in the Middle East has thrown the world’s energy markets into a tailspin — though its effects have so far been muted in the U.S.
In the days after the U.S. attacks, Iran retaliated by striking oil and gas facilities throughout the region, and threatening fossil fuel shipments through the critical Strait of Hormuz. The result has been obvious in Asia and Europe, where natural gas prices have spiked. But prices stateside have remained steady so far — and in fact, the war is likely to result in a payday for U.S. LNG exporters.
But the U.S. dominance in oil production hasn’t spared the country from crude price hikes. The average cost for a gallon of gasoline in the U.S. has risen by 27 cents over the past week, according to AAA — a jump that hasn’t been seen since Russia’s 2022 invasion of Ukraine. The White House is reportedly looking for ways to tame the rising costs, but so far there are no plans to tap the Strategic Petroleum Reserve.
Great Job Kathryn Krawczyk & the Team @ Canary Media for sharing this story.
