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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

City of Davis Considers Leaving PG&E for SMUD

LCG, February 4, 2003-City officials of Davis, California are thinking about changing the city's utility from Pacific Gas and Electric Company to the Sacramento Municipal Utility District (SMUD).

Davis, an agricultural city of roughly 65,000, is located 15 miles west of Sacramento and is home to the University of California, Davis, which adds an additional 25,000 in student population.

City officials plan to talk with SMUD directors about the possibility of obtaining service through SMUD, although Davis has received electricity from PG&E for over 100 years.

City officials will likely commission a study regarding a switch and its possible benefits in terms of reliability and retail electricity prices. According to John DiStasio, SMUD assistant general manager for customer service, a study will take between six and nine months.

Several cities in California have looked elsewhere for power services lately; San Francisco has seen increased interest in public power and several initiatives were put forth last year.

PG&E Co. filed for bankruptcy in 2001 after discrepancies between wholesale power prices and retail caps pushed the utility into the red. PG&E is currently in bankruptcy court, awaiting the approval or denial of its plan to divide its assets among four companies, three of which would fall outside of state regulation.

SMUD was created in 1923, but 11 years of fundraising and 12 years of litigation with PG&E over transmission line costs prevented it from becoming an operating utility district until 1946. SMUD is community-owned and delivers electricity to over 530,000 customers in Sacramento County as well as some of Placer County.

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