Several data‑centers in California, built for the AI era, stand idle because local utilities are unable to provide sufficient electricity, highlighting broader risks to the U.S. power grid as demand surges.
Shells of data‑centers in Santa Clara, California, remain unpowered because the municipal utility Silicon Valley Power (SVP) cannot meet their massive energy needs. The predicament comes as the state phases out reliable baseload sources like coal and natural gas, while expanding tech‑industry power demands and depending heavily on electricity imports.
According to the U.S. Energy Information Administration (EIA), data‑center expansion and on‑shore manufacturing are major drivers of rising power demand nationwide. California now ranks among the highest in the nation for electricity prices and energy import dependence.
Industry experts say the combination of premium power demands located near population hubs and constrained utility infrastructure means some data‑centers cannot physically be brought online on schedule. “There are portions of data‑center demand that need to be as close as possible to population centers… they can’t bring it online because there’s constraints on power.” — Bill Dougherty, executive VP for data‑center solutions.
The situation carries broader implications: increasing risks of power instability as states push aggressive climate‑and‑energy transitions. One commentator noted that tech‑industry commitments to phasing out fossil‑fuel‑based power have indirectly contributed to today’s supply shortfalls.
For policymakers, several issues stand out: whether infrastructure investment keeps pace with new demand; how grid reliability is balanced with emissions goals; and how states manage power import dependence during peak demand growth. The California case offers a cautionary example for other regions accelerating data‑center permitting alongside energy transitions.
