US public power sector weighs risks and rewards of data center customers

Data Centers increased fluctuation in electricity demand for public services

Public services are faced with power deficiencies and excessive construction risks

Pressure for modernized rules in long -term contracts with data centers

New York, October 2 (Reuters) -ABD Public Energy Services Data Centers see explosive electricity demand, some demands exceed the total energy currently used by all customers, CEOs and investors this week said this week.

Big Teh’s data center power demand has created the opportunity to increase income and investments to the country’s long -standing power industry at the Great Public Power Council Financial Conference in New York, but the record accumulation of energy intensive server warehouses comes with new risks.

Dan Sullivan, CEO of Oklahoma’s Grand River Dam Authority, said, “We see enlarged growth.” Authorized, mostly about 2,000 megawatts from data centers, and that public service is trying to connect to approximately 2,000 megawatt system, he said. “They will scaze or have the ability to do as fast as you allow them.”

General Manager Kirk Hudson, a panel debate, operates in the province of Washington Chelan Pud, about 200 megawatt system of public service system is about 1,400 megawatt connected to the system.

Hudson shows how Chelan Pud has significant excess hydroelectric, but keeps the rates low, providing system reliability and maintaining local control.

Public energy services, which are generally for 40 years of contracts with municipal customers, face unique challenges in adapting to the fast -moving data center market.

The proliferation of data centers – some are large enough to consume the same amount of electricity as a medium -sized US city – increasing potential power deficiencies or concerns about excessive construction.

Public energy services have the advantage of providing tax -exempt municipal bonds to finance the infrastructure, and how to configure the agreements for data centers to avoid trapped costs – the risk of establishing capacity for customers who move away.

PFM Financial Advisors Director John Murphy said, the question from HypersCalers and data center developers is beyond the public power – or public service market – beyond ever seen. ” “The risk of how these projects are financed will be the key to the director.”

Public power groups usually cannot enter the long -term data center power contracts, commonly used in the energy sector that does not purify the tax status of all portfolios. This leads to the regulation of short -term agreements that can complex the long -term infrastructure planning of public services.

“These rules need to be modernized,” said Javier Fernandez, CEO of the Omaha, Omaha. He continued: “I need to have a long -term contract with these data centers in order to protect the housing customers from ratio shock.”

Jason Pollack, General Manager of Government and Corporate Banking in Wells Fargo, said that public services are also struggling with uncertainty around costs and that the equipment had waiting times to create infrastructure. (Reporting by Laila Kearney in New York; Editing by Nia Williams)