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Faster-than-Expected Data Center Load Growth May Cause Increased Regional Short-term Fossil Fuel Generation and Wholesale Electricity Prices

LCG, March 18, 2026--The EIA released a new "In-depth Analysis" of the potential impact of faster-than-expected near-term growth in data center power demand on power generation and wholesale prices on March 12. The analysis models the lower 48 states through 2027 and compares results to its base case scenario. Key takeaway from this sensitivity analysis is the potential increase in fossil fuels in some regions and potentially a significant increase in wholesale prices in ERCOT.

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Faster-than-Expected Data Center Load Growth May Cause Increased Regional Short-term Fossil Fuel Generation and Wholesale Electricity Prices

LCG, March 18, 2026--The EIA released a new "In-depth Analysis" of the potential impact of faster-than-expected near-term growth in data center power demand on power generation and wholesale prices on March 12. The analysis models the lower 48 states through 2027 and compares results to its base case scenario. Key takeaway from this sensitivity analysis is the potential increase in fossil fuels in some regions and potentially a significant increase in wholesale prices in ERCOT.

Read more

Industry News

Gradual Increase in Merchant Generation Proposed in Arizona

LCG, Sep. 30, 2002--The Arizona Corporation Commission, which regulates Arizona's utilities and power markets, put forth a plan last week suggesting that an increasing amount of power be supplied by long-term contracts bid by merchant suppliers and energy marketers to supply utilities' needs.

The percentage of utility Arizona Public Service's summer demand to be met by competitive bidding would be allowed to start at 30% next year, for a total of 1,951 megawatts. In addition, must-run power purchase agreements in areas with little surplus transmission could be privately negotiated.

According to an official with APS who was present at a hearing on Thursday, congestion on some transmission lines transmitting power from plants of Pinnacle West, the unregulated affiliate, would require that those plants be given top priority for such lines' use. Possible competitors of Pinnacle West disagreed with such a policy.

Price would be one of several criteria used in selecting bids, according to the ACC's plan. Other considerations cited were reliability, creditworthiness and system-wide benefits. By 2006, the ACC said, 2,898 megawatts of APS' capacity would be subject to competitive bid.
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