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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

Energy Legislation Could Reverse 70's-Era Law

LCG, Sept. 23, 2003--Owners of cogeneration plants that produce electricity as well as steam for manufacturing and industrial processes are lobbying for the preservation of the Public Utilities Regulatory Policies Act (Purpa), crafted in the '70s, that requires utilities to purchase cogenerated power.

Sen. Pete Domenici and Rep. Billy Tauzin are siding with a large group of utilities that want to see the end of Purpa, under which rates for cogenerated power are regulated. Oil refiners and chemical companies with cogeneration plants have acknowledged that in some instances, utilities may have paid more than necessary for power under Purpa, but they contend that the plants are efficient as intended, and that getting rid of the requirement will not necessarily lead to lower power prices for utilities and consumers.

The amendment developed by Domenici would not result in an across-the-board shift away from Purpa, but allow the Federal Energy Regulatory Commission to determine in which markets a competitive wholesale market could benefit energy purchasers. ExxonMobil, which supports Purpa, believes that both existing and future cogeneration plants could be stifled if the amendment is passed. Purpa was signed into law when foreign oil imports and energy supplies became a national concern.
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