The utility sector’s challenge to meet future data center demand may require new capacity including microgrids and/or distribution system upgrades. Whatever the means of supplying enough power for new AI-focused data centers, the grid side will require vast amounts of investment.
To handle that end, American Electric Power (AEP)-owned utility Indiana Michigan Power has filed a joint settlement on future data center load commitments with some of the nation’s biggest tech companies.
Indiana Michigan Power (I&M) joined with the Indiana Office of Utility Consumer Counselor, ratepayer advocate Citizens Action Coalition and Data Center Coalition on the settlement that requires new large load customers to make long-term financial commitments so that will ensure the costs of serving their customers are “reasonably recovered” from the customer.
Among the tech giants signing on to the Indiana agreement include Google, Amazon Web Services and Microsoft. Recently, parent company AEP revealed during an earnings update that it has close to 15 GW in future load commitment from data center customers.
Delivering 15 GW of new power generation capacity to meet both industrial and data center load growth will cost billions of dollars in infrastructure construction and new resource investment.
“The settlement filed with the Indiana Utility Regulatory Commission (IURC) recognizes the energy needs of new large customers and proposes additional commitments that these customers must meet when establishing electric service,” reads the release announcing the collaborative agreement with the tech companies. “These new requirements are important to balance the interest of the new customers with the interest of I&M’s existing customers.”
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