Analysis-Texas' halt on powering data centers reflects US reckoning over 'ghost' demand

Data centers across the middle of the United States have requested electricity usage equivalent to what powers every home in the country, but much of that demand may be fictitious. Texas became the first major data center hub to halt new grid connections for facilities and investigate their plans. Other U.S. states are adopting similar measures to address the growing issue that is causing concerns for regulators and politicians.

A Reuters investigation revealed that electricity requests from large power users, primarily data centers, exceed 700 gigawatts - more than 10 times the industry's current estimates - in parts of the Midwest, Mid-Atlantic, and the South. Consumer advocates and regulators warn that many requests are likely duplicative or made by companies lacking the funds or expertise to see the projects through, potentially hindering critical grid planning.

Some of these concerns are now being confirmed, as major utilities are cutting their data center demand figures once financial safeguards, such as requiring upfront payments, are implemented. The uncertainty surrounding data center electricity use is leading data center hotspots like Texas, Pennsylvania, and Ohio to enact rules to filter out projects that could raise prices and provoke political backlash without ever being built.