Grid Operators Race to Connect a Backlog of Power-Hungry Data Centers

Electric utilities across several regions say requests to connect large computing facilities to the grid now exceed anything in their planning history, forcing a redesign of the queues that decide which projects get power and when.

The requests are not small. A single large campus can draw as much electricity as a mid-sized city, and developers often file applications in several territories at once to keep their options open — inflating queues with projects that will never be built.

Grid operators are responding with stricter deposit requirements, milestone deadlines and, in some cases, penalties for withdrawn applications. The goal is to separate committed projects from speculative ones so that transmission upgrades — which can take the better part of a decade — are planned against demand that will actually materialize.

Developers, for their part, are moving toward sites with existing industrial infrastructure, signing long-term supply agreements with generators, and in a few cases funding substations themselves to jump the line.

The stakes extend beyond the technology industry. How regulators allocate scarce interconnection capacity will influence where the next decade of industrial investment lands — and which regions capture the jobs and tax base that come with it.