Amid Booming AI Demand, Utilities Face Scrutiny Over Power Forecasts

Sat Nov 15 2025 09:24:31 GMT+0200 (Eastern European Standard Time)

Utilities project significant electricity demand increases tied to new data centers aimed at AI growth, igniting concerns among policymakers over the reliability and implications of these forecasts.

In light of rapidly growing electricity needs to support burgeoning AI data centers, utilities are predicting a surge in demand that raises concerns among lawmakers and regulators. Key issues include whether these forecasts accurately reflect real projects or are speculative, impacting utility bills for consumers. The situation has sparked debate on the need for better validation of data center projects and their energy requirements.

HARRISBURG, Pa. (AP) — Utilities are signaling an overwhelming increase in electricity demand, forecasting a need for two to three times more power within a few years, primarily driven by the ongoing expansion of data centers that support an increasingly AI-driven economy.

This dramatic rise in demand has spurred concerns among lawmakers and regulatory bodies about the reliability of these forecasts and whether they're based on actual, actionable projects or speculative ventures that might burden consumers with hefty costs for constructing unnecessary power plants and grid infrastructure.

Consumer advocates warn that in regions like the mid-Atlantic, where the electricity grid spans 13 states, ratepayers are already subsidizing the costs associated with data centers—many of which are not yet operational.

Joe Bowring, head of Monitoring Analytics, an independent market monitor in the mid-Atlantic area, expressed skepticism about the validity of these forecasts, noting that uncertainty remains over what is speculative versus real. Nobody really knows...what’s speculative, what’s double-counting, what’s real, what’s not, Bowring said.

Concerns Surrounding Demand Projections

The lack of a standardized approach across various grids and the complexities in determining project viability have made this an urgent issue for utilities and operators. Analysts point to two main causes for uncertainty: developers seeking grid connections often without solid plans, and issues of transparency when multiple developers submit requests in separate utility territories.

In September, a member of the Federal Energy Regulatory Commission urged the nation’s grid operators to improve how they assess the viability of electricity demand claims from projects. It highlights a collective urgency to enhance demand forecasting methods, which could lead to more informed decision-making and timely infrastructure development.

Legislative Actions and Consumer Protections

In Texas, lawmakers are reevaluating how requests for electricity are processed, particularly after a grid failure during a 2021 winter storm. Recently enacted laws now require data center developers to disclose their electricity requests across the state, ensuring they demonstrate serious financial commitments to projects.

As customers in Pennsylvania grapple with rising electricity bills attributed to increased demand from the tech sector, lawmakers like Rep. Danilo Burgos are advocating for better regulatory oversight to secure consumer interests against rising costs. Once they make their buck, whatever company...you don’t see no empathy towards the ratepayers, Burgos asserted.

The evolving landscape around data centers and energy needs showcases a balancing act between innovation and consumer protection, as stakeholders work to align interests amid rapid technological advancement.