When rural electric utilities first strung power lines from farm to farm, across waterways and through remote forests less than a century ago, most consumers had but a handful of light bulbs to power. With time, they added appliances like refrigerators, but they surely couldn’t imagine the number and variety of electrical devices in today’s homes and garages.
Across the United States, consumers use a growing amount of electricity at work, at home and, with the growth of electric vehicles, on the road.
The demand for electricity increased by 2.5% in 2024 and is expected to grow by 3.2% this year. This comes after many utilities saw a 4.8% increase in 2022. Through 2029, the nation’s peak demand is projected to grow by 38 gigawatts. That would be like adding another California-sized state to our nation’s power grid.
Driving this surge are advancements in technology, including artificial intelligence, cryptocurrency and cloud computing, which rely on energy-intensive data centers. These facilities, often located in rural areas due to affordable land and fewer neighbors, require massive amounts of electricity.
According to the U.S. Department of Energy, data centers consume up to 50 times more energy per square foot than traditional commercial buildings. By 2030, these centers are expected to account for 9% of the nation’s electricity use, up from nearly 2% today. A single large data center may demand more than 100 megawatts of power, enough to supply 80,000 homes.
At the same time, baseload power—the always-available energy typically generated by coal and nuclear plants—is being retired at a rapid pace. More than 110 gigawatts of this reliable power are slated to disappear by 2033. As renewable energy sources like solar and wind grow, they cannot fully replace baseload generation due to their intermittent nature. Without sufficient baseload power, the risk of rolling brownouts and blackouts increases, a scenario experts warn could affect 19 states by 2028.
This growth in demand is unprecedented. A decade ago, a huge commercial project might boost a utility’s total load by 20 or 30 megawatts.
“Now, they’re getting requests for projects in the hundreds of megawatts,” says Stephanie Crawford, regulatory affairs director for the National Rural Electric Cooperative Association.
This growth places immense pressure to expand capacity and upgrade infrastructure.
To address these challenges, the efforts fall into two categories: increasing knowledge and building relationships. A generation ago, power supply discussions were fairly straightforward for utility directors, given the widespread availability of baseload generation. Today’s directors increasingly find themselves learning about sophisticated and challenging issues as they weigh decisions affecting operations and financial viability for years to come.
They must grapple with complex energy issues, from ensuring sufficient transmission capacity to understanding regulatory hurdles. Supply chain constraints also pose significant barriers, with delays for critical components like transformers stretching up to two years.
Relationship-building is equally crucial. Utilities must engage early and often with companies planning large energy projects to ensure alignment on costs, timelines and infrastructure needs. For instance, phased development of a data center can give them more time to prepare for peak loads. Partnerships to develop on-site generation assets may also alleviate transmission challenges.
While these tech companies are often willing to invest in infrastructure upgrades, their focus is on reliability rather than cost. Utilities must balance these demands with their obligation to maintain affordability and reliability for all consumers.
In addition to preparing for new projects, Stephanie notes the importance of leaders keeping their fingers on the pulse of their existing commercial accounts.
“Being proactive and reaching out to understand how a commercial account’s energy needs may be changing in the coming years will inform conversations and decisions about timing, rate design and other factors, even if they’re not making specific requests yet,” she says.
Stephanie says this improved communication helps utilities serve emerging needs while protecting reliability for all consumers.