The AI Data Center Boom Faces a New Reality Check
“A fraction of proposed data centers will get built. Utilities are wising up.” That was the headline on a May 2025 Utility Dive article that explored the conundrum speculative data center requests pose for U.S. electric utilities. More than a year later, it’s unclear how much has changed. Community opposition has emerged as a major barrier to data center development, with other challenges…
A recent Utility Dive article published in May 2025 highlights the challenges faced by the U.S. electric utilities in building and approving data centers. Since January 2024, over $170 billion in AI data center capacity has been blocked, withdrawn, or stalled due to community opposition. Despite the obstacles, market analysts project a significant increase in U.S. data center power demand, with Goldman Sachs estimating it to more than double from 2025 levels to reach 66 GW by 2027.
Currently, only about half of the scheduled data center capacity for the next one to two years is expected to be operational, according to the Electric Power Research Institute. The uncertainty surrounding the scale, timing, and location of new data center load is growing, especially in Texas, where the state has paused new data center interconnections pending an audit of its 474-GW queue.
Texas utilities and regulators have implemented large-load tariffs, incentives for developers, and stricter rules to weed out speculative loads and ensure the grid is neither over- nor under-built. However, some experts remain skeptical, questioning the accuracy of the forecasted load growth and the likelihood of all the projected capacity coming online.
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