Utilities, regulators, and the press are bracing for a data center electricity crunch. However, the Lawrence Berkeley National Laboratory (LBNL) released a report showing that 2024’s electricity consumption by data centers came in at the low end of previous expectations. That points to a challenge the U.S. can meet, provided the cost of serving data centers falls on the companies creating them.
U.S. data centers used 192 terawatt-hours in 2024, or 4.7% of the nation’s electricity. The report uses a model based on actual IT equipment shipments, which led the researchers to mark down recent chip deliveries and cut their 2030 shipment projection by as much as half. The report is not based on “top-down” estimates from data center developers or utility companies, which “are prone to exaggerated growth outlooks.” Utilities have reason to inflate the numbers because they earn returns on what they build. Data center developers file more interconnection requests than projects they’ll actually build in order to hold their places in line.
None of which makes the buildout small. LBNL still puts data centers at 649 TWh, or 11.8% of U.S. electricity, by 2030, with scenarios running from 9.5% to 15.3% of the U.S.’ total electricity use. But the sector accounts for only a third of projected load growth through 2030. The rest is electrification and reshored manufacturing.
A national growth rate also understates the impacts in areas popular for data centers, but overstates it for others. In a grid like PJM Interconnection, which serves the data center cluster around Northern Virginia, these facilities can drive a large share of local demand. However, data centers also contribute to the communities that host them: their taxes let Loudoun County lower its homeowner property tax rate every year from 2016 to 2025, from 1.14% to 0.81% of assessed value.
Serving that demand means building capacity, and someone has to pay the bill. LBNL’s central projection expects 148 gigawatts of interconnection capacity by 2030, roughly double what data centers actually draw, because operators reserve the extra for redundancy and maintenance. When a utility builds generation and transmission to serve them and folds the cost into the rate base, every customer in the territory pays unless data centers enter specific agreements with the utility company.
There is a cleaner arrangement: Some operators skip the grid and build their own generation. One option is consumer-regulated electricity, or CRE, which lets a large customer build privately financed, off-grid power outside utility rate regulation. A plant islanded from the grid, on the developer’s balance sheet, never enters the rate base; residential ratepayers don’t run any risk of paying for a developer’s private generation.
Make a data center pay for its own power, like any other industrial customer, and it stops being a problem for anyone else’s bill.