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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

AEP Revises Settlement and Agrees to Retire Three Coal-fired Units

LCG, February 26, 2013--A revised settlement agreement between American Electric Power Company (AEP), the U.S. Environmental Protection Agency (EPA), and a coalition of environmental and citizen groups was announced yesterday that will retire three of AEP's coal-fired, electric generating units.

The revised settlement includes the closure of AEP's Tanners Creek Generating Station Unit 4 in Indiana, the Muskingum River Power Plant Unit 5 in Ohio, and the Big Sandy Power Plant Unit 2 in Kentucky, which have a combined generating capacity of 2,011 MW.

Other terms of the revised settlement include AEP paying a total of $6 million to Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont, plus $2.5 million to citizen groups in Indiana. AEP must also develop 50 MW of wind or solar generating capacity in 2013, plus 150 MW in Indiana or Michigan by 2015.

The revised settlement allows AEP to install a lower cost, sulfur dioxide emission control system at the Rockport coal plant in southern Indiana.

AEP, like other owners of coal-fired power plants, continues to evaluate costly compliance options in response to growing federal regulations, such as the utility mercury and air toxics standards (MATS), driven by the EPA. Uncertainty on near-term emission control project costs, plus future incremental costs to comply with new regulations that may arise, makes it increasingly attractive to retire older coal-fired plants and to invest in new plants fueled with low-cost natural gas.
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