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The data center scramble feeding off the AI boom is no longer just raising utility prices for nearby civilians — it’s rerouting their utilities entirely.
Bombshell new reporting by Fortune details the plight of residents in Lake Tahoe, on the border of California and Nevada, whose electrical supplier is cutting them off in order to supply more energy to nearby data centers.
According to the magazine, Nevada-based utility company NV Energy gave residents notice that they’ll stop providing power after May of 2027. That leaves California-based energy transmission company Liberty Utilities with a major gap in its supply chain, because NV Energy supplied 75 percent of its total power.
To understand exactly what’s going on, we have to untangle the mess of transmission lines and energy suppliers that makes up the US electrical grid. Taking a look on Open Infrastructure Map, an open source tool for mapping the world’s utility infrastructure, it’s clear NV Energy supplies the bulk of residents on both the California and Nevada side of Lake Tahoe. In all, Fortune reports the decision could leave as many as 49,000 residents in the dark — literally.
“It’s like we don’t exist,” Danielle Hughes, a Lake Tahoe resident and supervisor with the California Energy Commission’s Efficiency Division, told Fortune.
Because of the topsy-turvy web of energy concerns overseeing various chunks of the region, it would cost “hundreds of millions of dollars” to connect Liberty Utilities with a new energy provider on the California side, Liberty president Eric Schwarzrock told the magazine.
The data center boom is rapidly sucking Nevada’s power grid dry, with an estimated 22 percent of the state’s total electricity generation capacity going toward the behemoth computing centers in 2024. According to the Desert Research Institute, that figure could rise to as much as 35 percent by 2030 if current trends continue.
Responding to the outcry by local residents, a spokesperson for NV Energy told Fortune that the decision to uncouple from Lake Tahoe was a “planned transition for many years, not a reaction to recent developments.”
Given that residents now have less than a year to secure a new electrical supplier, though, it’s hard to imagine why the announcement was left for the last minute — and who will ultimately pay the price.
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