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Data Center World Power
September 21 - September 23, 2026
Gaylord Texan Resort & Convention CenterDallas, TX
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Data Center Digest: Why Data Centers Need New Utility Strategies Now
By Brian HolakShareshare

In the lead-up to Data Center World’s POWER event, we're giving you a preview of the key topics and discussions that will take center stage – and what makes them so critical.

Explosive data center demand, interconnection backlogs, and aging transmission lines are pushing the limits of the U.S. power grid in unprecedented ways. Let’s break down the scope of the challenge and why grid modernization, closer utility collaboration, and on-site generation are becoming must-have strategies for the data center industry.

A Growing Bottleneck

According to the U.S. Energy Information Administration, data centers are projected to drive more than 20% of the growth in electricity demand by 2030. Meanwhile, Deloitte estimates that, by 2035, power demand from AI data centers in the U.S. could grow more than thirtyfold, reaching 123GW. And a recent Department of Energy report paints an even bleaker picture, warning that blackouts could increase 100-fold by 2030 as power-hungry facilities increase grid volatility. Can the grid evolve fast enough to support this massive uptick in demand?

We’re already seeing the cracks. The PJM Interconnection – the nation’s largest grid operator – recently admitted it’s struggling to keep pace with AI data center demand. Similarly, Constellation Energy said it's feeling the pressure, reporting a 45% increase in usage from its existing data center customers since 2023. Xcel Energy warned it needs $22 billion in upgrades just to keep up with Colorado’s massive projected data center power demand by 2040 – and said it already has pending applications from data centers in need of 5.8GW of electricity. In Northern Virginia, the densest data center market, Dominion Energy has warned of multi-year delays in connecting new data center projects to the grid.

In response to grid strain, state lawmakers are beginning to enact stricter policies targeting data centers, including Texas’ much-buzzed-about Senate Bill 6 into law. The bill mandates that large energy consumers pay their share of interconnection costs and participate in long-term grid planning. It also places new reporting requirements on facilities using significant onsite generation.

The Road Ahead

While progress on grid modernization is being made, it's going to be a long and costly process. In the meantime, interconnection delays and regional grid limits continue to compound across the country. Amid this shifting landscape, a proactive approach to utility partnerships is more essential than ever. Companies that build stronger – and earlier – partnerships with utilities, champion smarter interconnection planning, and anticipate grid constraints are already at an advantage. Understanding capacity limits and regional market structures can mean the difference between on-time deployment and massive delays – or even full project cancellations.

That being said, companies can't always afford to wait. That’s why more data centers facing grid constraints are turning to behind-the-meter (BTM) configurations. In this model, data centers generate and consume their own on-site power, using the public grid only as a backup. According to AFCOM’s 2025 State of the Data Center report, 62% of operators are exploring on-site power generation, with 19% already implementing it. BTM setups offer several benefits, including enhanced energy resilience, faster speed-to-market by avoiding transmission delays, and improved energy efficiency by eliminating transmission losses.

Key Sessions at Data Center World POWER

Several sessions at the POWER event will unpack these dynamics in depth and offer expert advice for navigating them:

  • Keynote: Power Paradigm Shift: How Texas is Leading the Charge in Powering Digital Infrastructure to Support the AI Roadmap (Tuesday): Discover how Texas has become both a proving ground and a pressure point for developer-utility-regulator collaboration.

  • Gridlock or Greenlight? Utilities on Navigating the Power Bottleneck (Tuesday): Utility leaders share approaches for overcoming interconnection backlogs, managing regulatory hurdles, and unlocking capacity for hyperscale deployments.

  • The State of the Data Center & Energy Today (Tuesday): A big-picture view of how U.S. electric markets must evolve to meet AI-driven demand, informed by AFCOM research.

  • AI Meets the Grid: Modernizing Energy Infrastructure for High Density Demands (Wednesday): Utility and engineering experts discuss how transmission, smart grid upgrades, and collaborative planning can meet gigawatt-level demands.

  • Behind-the-Meter Playbook: Ownership, Operations & Utility Integration (Tuesday): Learn operator strategies for onsite generation, ownership models, and integration with utilities to boost speed, efficiency, and reliability.