As the governor looks to amp up Utah’s electricity production, state lawmakers are grappling with how to supply power to artificial intelligence data centers and other “large load” customers.
Two bills in the Utah Senate create new guidance for supplying energy to large load users like data centers, which house servers for artificial intelligence software like ChatGPT. One proposal that looks to work with Rocky Mountain Power, Utah’s largest utility, has made it through a Senate committee, while another considering a range of energy options awaits approval in the Senate Rules Committee.
Data centers can use as much energy as 200 households and possibly as much energy as an entire city, CNBC reported.
A single data center in Utah could use 1.4 gigawatts of power, Gov. Spencer Cox told The Salt Lake Tribune in December. “The entire state runs on four,” Cox said. “These AI data centers, their energy consumption is insatiable. It’s insane.”
Cox’s Operation Gigawatt aims to double Utah’s energy generation in the next decade to meet the state’s rising energy demands. Data centers, specifically, aren’t a priority, Cox said, as they “use a lot of resources and don’t create a lot of jobs.” But they are a reality, he added, and if Utah can increase its energy capacity “and that attracts AI data centers, I’m fine with that.”
SB132 deals directly with Rocky Mountain Power, which predominately runs on coal and natural gas, and would let the company contract directly with large load customers. The idea, said bill sponsor Tremonton Republican Sen. Scott Sandall, is to spare regular consumers the financial burden large loads might bring to the company. Otherwise, any additional costs associated with supplying large load customers might “spread across the existing rate base.”
“That becomes problematic for our residential customers in supplying a load that, quite honestly, [large load customers] are willing to pay more for,” Sandall told reporters Wednesday. “So what my bill file does is allows Rocky Mountain Power to step out of that regulated monopoly space and go into the competitive space and contract directly with these large loads.”
The bill also creates an “off-ramp” for customers who can’t agree on terms with Rocky Mountain Power to contract with another power company.
Senate Majority Leader Kirk Cullimore’s SB227, meanwhile, allows “alternative energy suppliers” — so, anyone but Rocky Mountain Power — to contract directly with large load customers.
A key distinction — and a key concern for some lawmakers and lobbyists — is the kind of energy allowed in each bill.
Sandall’s proposal, which passed out of committee earlier this month, specifies that large-load suppliers can supply energy “only through qualifying generation resources” — which, he said during the Feb. 5 committee hearing, does not include renewable sources like solar and wind if they are the only sources available.
An earlier version of the bill did not allow renewable resources at all; the substitute version currently on the Senate floor allows for solar and wind power, which the bill calls “intermittent energy source,” as long as they are not the primary source of power.
“If you’re waiting for the sun to shine, you can’t run a data center,” Sandall, the vice chair of the executive appropriations committee, said. “It’s got to have 24/7 power. … It has to be backed up with something for the base load.”
Sen. Nate Blouin, D–Salt Lake, questioned during the Senate Natural Resources, Agriculture, and Environment Committee hearing whether the restriction on renewable energy sources ran counter to Cox’s “all of the above” energy approach.
“From what I’m seeing here, it really prioritizes one resource above another,” Blouin said.
SB227 from Culliomore, R-Cottonwood Heights, is more energy agnostic. It does not specify an energy source, so long as it is “sufficient to reliably serve the expected demand of the contracted new large load customer” and “can be delivered when required by the alternative electrical service provider’s contracted new large load customers.”
Utah Clean Energy, a nonprofit advocacy group, said any bill that accounts for large loads “should ensure that companies can use whatever combination of clean resources that they want to use.”
“It is essential that as our state tries to bring online new resources for customers like data centers, that we keep all options on the table,” Utah Clean Energy Director of Government Relations Josh Craft said in a statement. “Solar, battery storage and energy efficiency can be deployed quickly and cost-effectively to help meet our growing energy demands. That’s better for air quality but also for our competitiveness for companies looking for power.”
SB227 is still in the rules committee and has not yet faced a debate in committee or on the floor. SB132 is on the Senate floor.
“There’s two bills and we’ll now work together; it’ll be interesting to see how they come out,” Senate President Stuart Adams told reporters Wednesday.
