NEW YORK--(BUSINESS WIRE)--#creditratingagency--KBRA releases research on the accelerating growth in U.S. data center electricity demand, examining the opportunities and challenges for public power utilities and the municipal governments that host these facilities.
While U.S. electricity consumption exhibited limited to no growth for most of the 21st century, it has been rising in recent years, largely due to data center load growth. These large, energy-intensive loads are the digital backbone of the expanding artificial intelligence (AI), cloud computing, and cryptocurrency industries. For municipal electric utilities, data centers represent a strong source of energy sales and revenue growth, as well as provide a considerable benefit to the local tax and economic base. However, depending on the size of the data center load relative to the available power supply, transmission access and capacity, and the utility’s existing customer base, the cost to serve data centers can be significant, presenting considerable challenges for public power. While this report is primarily focused on public power impacts, KBRA also notes credit implications for host municipal governments.
Key Takeaways
- After many years of lackluster growth, U.S. electricity consumption is on the rise.
- The U.S. Department of Energy (DOE) projects data center electricity usage to double or triple nationally by 2028.
- Data centers generate utility sales revenue and margin, as well as general governmental revenue in the form of property, utility, and income taxes.
- However, data center energy requirements that materially exceed a utility’s available power supply or transmission access may require costly infrastructure investments to meet electricity demand.
- The credit implications for affected public power utilities and host municipalities will depend on how well they manage the opportunities and challenges of serving these very large loads.
Click here to view the report.
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