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NASHVILLE, Tenn.— Electric cooperatives and the broader power sector must tap a range of solutions to reliably serve growing data center electricity demand while addressing consumer concerns about those loads, panelists said during two packed sessions at NRECA PowerXchange.
The North American Electric Reliability Corp.’s latest long-term assessment projects 225 gigawatts of peak demand growth in the next 10 years, NERC President and CEO Jim Robb said. One gigawatt is enough energy to power a city the size of San Francisco.
“We just have not seen that kind of growth really since post-World War II industrialization of the country,” Robb said during a March 9 session on demand growth that drew a standing-room-only crowd of about 1,900 people.
“We’re really in a very generationally unique moment in terms of the transformation of the electric grid,” he continued. “The scale of the investment that’s going to be required is off the charts compared to what any of our processes as a society are set up to do, and that’s one of the big challenges.”
About half the expected demand growth in the next five to 10 years will come from data centers, Robb said, noting the possible strain on resource adequacy if available energy supply cannot keep up.
“The large loads question and the load growth question has been squarely in the center of a lot of the risks that we’ve identified over the next five to 10 years,” he said.
At a separate session on data centers attended by around 1,700 people, NRECA Director of Markets and Rates Allison Hamilton said data centers “went from being a niche sector of the digital economy to driving the most significant electricity demand we’ve seen in decades.”
But speakers in both sessions emphasized the potential benefits of serving data centers in terms of local tax revenue, jobs and the creation of large, consistent loads for co-ops that could reduce or steady rates.
Data centers “are a cornerstone of our modern economy, fueling everything from technology startups to major financial institutions,” said Lucas Fykes, senior director of energy policy and regulatory counsel with the Data Center Coalition.
“These are the type of companies that you want in your community,” he said.
Solutions for serving data centers
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To meet surging demand, “we need to really rethink how we get infrastructure sited and built,” NERC’s Robb said. “I call this a five-alarm fire… because there are multiple things that need to get solved and they need to be solved today.”
In addition to data center demand growth, onshoring of various industries could create another 50 GW of new power demand in the next five to six years, said Arshad Mansoor, president and CEO of the Electric Power Research Institute.
With supply chains tight, electric co-ops and other utilities may need to extend the life of existing infrastructure and consider second- and third-tier suppliers of gas turbines and other equipment, Mansoor said.
Operational flexibility is also crucial, he added. EPRI launched an initiative in 2024, DC Flex, to create a framework for power providers to flexibly serve data centers through different operational and deployment strategies. DCFlex brings together over 60 hyperscalers, data center developers, technology companies, utilities, grid operators and equipment suppliers to address grid flexibility.
“Flexibility is the way that you can bring speed to power,” Mansoor said.
Community acceptance is key
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Electric co-ops looking to serve data centers must be ready to explain how they’ll safeguard consumer-members, both in terms of rates and power and water usage, panelists said at the afternoon session.
“Community acceptance is going to be critical in the development of really anything in our communities but particularly for data centers,” said Teri Viswanath, lead power and water economist for CoBank. “There’s a real concern about what the tradeoff is between the price paid locally and what those communities actually see.”
Rural Electric Convenience Cooperative in Auburn, Illinois, which serves fewer than 8,000 meters, has a frequently asked questions page on its website for a data center that the co-op is planning to serve through its wholesale power provider NextEra Energy. The FAQ page explains that data centers bring in extra revenue for co-ops that helps cover system costs, supporting rate stability for all members.
“We’re looking to utilize that benefit locally and take the pressure off,” said Sean Middleton, president and CEO of the distribution co-op. “I hope we don’t have to do a rate increase for the next decade.”
