What should state policymakers do about data centers?

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State legislatures are writing data center rules faster than they can verify the demand forecasts underneath them. Fifteen states accounted for 80 percent of data center electricity demand in 2023, a single hyperscale campus can arrive as 15 to 20 percent of a utility's demand, and the transmission to serve it takes five to 15 years to build. On this episode of Volts, David Roberts works through Climate Cabinet's Taming Data Center Turmoil series with Saleem Chapman, who leads the group's electricity affordability policy work, on why Georgia's regulated utility, PJM's capacity market, and ERCOT's competitive market each left ratepayers holding the risk, and what a state can require before it approves a project, while the facility operates, and after the deal is done.

Chapters:

00:00 – Introduction

02:49 – How Climate Cabinet came to the data center fight

03:58 – Three things that make hyperscalers unlike past industrial loads

07:51 – Warning signals: forecast opacity, gas dependency, unconditional subsidies

13:44 – Siting near overburdened communities and the Memphis case

15:34 – State preemption versus local control

18:31 – The same failure pattern in Georgia, PJM, and ERCOT

23:52 – Why not just ban data centers outright

28:07 – The framework, and what to require before approval

34:54 – While operating: real cost pricing and on-call load flexibility

37:39 – Scenario-based planning and the utility incentive problem

39:37 – After the deal: new and matched clean energy

43:48 – Siting standards and performance-tied incentives

50:27 – Existing facilities and the threat to build elsewhere

55:41 – Which states are ahead, and step one for lawmakers