Electric Power Generation & Distribution NAICS 2211

Sep 22, 2025 - Electric Utilities Grapple with Data Center Growing Pains

• The tech industry’s thirst for electricity to power data centers for AI could increase costs for electric utilities as well as residential and commercial electricity customers, according to The New York Times. Data centers accounted for 4% of US electricity consumption in 2023, but some industry watchers suggest it could climb to 12% in three years. Residential rate payers in the US have seen their bills increase by 30% since 2020. While much of the increase was due to utilities hardening grids amid more intense weather events and routine maintenance, data center expansion is expected to drive costly improvements to the electric grid. Unless lawmakers and regulators compel tech companies to fund the upgrades, ordinary customers could see more rate hikes. While tech firms say they want to help fund grid expansion, including building their own electricity generation capacity, utilities could still face high upfront costs.
• In late August, the US government, through the Bureau of Ocean Energy Management (BOEM), ordered Danish firm Orsted to cease work on the Revolution Wind project off the coast of Maryland, according to The Wall Street Journal. The wind project began construction last year and was 80% complete at the time of the stoppage, with all foundations and 45 of 65 turbines installed. The BOEM said it needed more time to complete a review ordered by the Trump administration. Trump opposes wind power and suspended all new federal leases for wind projects soon after his inauguration. In early September, Orsted filed a lawsuit to challenge the stoppage. In mid-April 2025, the Trump administration made a similar move against Norway-based Equinor’s Empire Wind project off the New York Coast, but the order was lifted a month later.

• Renewable energy sources accounted for 91% of the 15 gigawatts (GW) of new electricity generation capacity that came online in the first five months of 2025, according to the Federal Energy Regulatory Commission (FERC) and reporting by Utility Dive. At 11.5 GW, solar held the largest share of new capacity additions, followed by wind (2.3 GW) and gas (1.3 GW). However, gas still accounts for the largest share of total electricity generation with 43%, followed by coal (15%), wind (11.8%), solar (11%), and nuclear (7.7%). Despite the Trump administration's favoring oil and gas and rescinding tax credits for renewables development and production, rising demand for electricity is expected to boost renewables. According to FERC, among 133 GW of "high probability" additions projected to be operational by 2028, 84% will come from solar and wind, and 15% from gas.
• Renewable energy industry insiders expect the tax and policy bill signed into law in early July by President Trump to reduce clean energy investments, according to The Wall Street Journal. The Biden-era Inflation Reduction Act created 30% tax credits for renewable energy projects, either on the development side with Investment Tax Credits (ITC) or for producing clean energy with Production Tax Credits (PTC). The credits were to remain available until 2032. The legislation signed in July sunsets the ITC and PTC for wind and solar projects five years early in 2027. The new law also requires projects to have higher levels of US-derived content and increases restrictions on content from foreign entities of concern (FEOC). Princeton University’s REPEAT Project estimates the new law will reduce US electricity and clean fuels production by $500 billion over the next decade.