Data‑centre economics heat up

U.S. utilities now say they may spend at least $1.4 trillion on grid and power-system upgrades through 2030, with data centers driving much of the new demand. (cbsnews.com) PowerLines said its review of 51 investor-owned utility earnings calls found five-year capital plans rose more than 21% from last year’s $1.1 trillion outlook. The group said utilities repeatedly cited data centers, load growth, storm hardening and aging equipment. (powerlines.org) The U.S. Department of Energy said data centers used about 4.4% of U.S. electricity in 2023 and could reach roughly 6.7% to 12% by 2028. That jump has turned warehouse-sized server buildings into a central planning issue for utilities and local governments. (energy.gov) In Virginia, the fight has moved from substations to the state budget. Lawmakers ended the regular General Assembly session without a budget after clashing over whether to keep a data-center sales-tax exemption worth about $1.6 billion a year. (rvamag.com) Virginia’s Senate backed ending the exemption, while House lawmakers favored keeping it or tying it to new conditions, according to VPM and Virginia Business. The dispute has centered on whether the state should keep subsidizing an industry that already dominates Northern Virginia’s “Data Center Alley.” (vpm.org) (virginiabusiness.com) Cities and counties are moving ahead even where no state tax fight exists. In Allentown, Pennsylvania, the Planning Commission on April 14 recommended zoning changes to govern where data centers can go and how they are reviewed. (wfmz.com) In Cochise County, Arizona, supervisors approved Ordinance 26-09 on April 7, creating the county’s first data-center rules. The ordinance requires special-use authorization in designated zones and sets standards for water use, infrastructure capacity, site design and long-term management. (cochise.az.gov) County officials said the Cochise ordinance does not approve any specific project. That distinction has become common as local governments try to write rules before developers file applications and before residents organize around a single site. (cochise.az.gov) (lehighvalleynews.com) Utilities and industry groups say the buildout supports artificial intelligence, cloud computing and broader economic growth. Consumer and affordability advocates say large capital plans often show up later in rate cases, after state regulators decide how much of the spending customers must cover. (cbsnews.com) (powerlines.org) The next fights will not be about whether data centers are coming. They will be about who pays for the wires, substations, tax breaks, water protections and zoning changes needed to host them. (cbsnews.com) (rvamag.com)