Smaller, public utilities see growth potential in data centers, but there are risks: APPA

AI generated summary

The American Public Power Association (APPA) highlights the growth potential for smaller public utilities in the booming AI data center sector, driven by increased interconnection requests. These not-for-profit utilities, which prioritize affordability and reliability, have successfully collaborated with data center operators, transforming some communities into significant IT hubs. For instance, the Northern Wasco County People’s Utility District in Oregon has seen its revenues soar from $32 million in 2016 to an expected $300 million in the coming years, largely due to partnerships with tech giants like Google.

However, the rapid development of data centers poses risks for smaller utilities, including potential impacts on grid reliability and increased carbon emissions, as evidenced by the experience of Umatilla Electric Cooperative. To mitigate these challenges, APPA advises smaller utilities to adopt proactive strategies, such as requiring data center operators to meet specific load minimums and contribute to infrastructure costs. These recommendations align with best practices suggested by energy system experts, emphasizing the need for careful planning and collaboration to ensure that the benefits of data center growth do not come at the expense of existing ratepayers.