Electric rates have been on a tear, spiking year over year of late, leading to public outcry and marathon public hearings.
With power-hungry data centers now on the Wyoming horizon — a collective 5.8 to 12.8 gigawatts have already been announced — people can’t help but fear the trend of spiking electrical rates will not only grow but grow on steroids.
Over the weekend, former state senator Anthony Bouchard channeled a lot of those fears and frustrations in one long Facebook post that attracted hundreds of comments.
“The new Casper AI center has the same electricity demand as a million homes,” he wrote. “There are two similar AI centers already being built in Cheyenne, now another is being built. There’s another one in Evanston … they will OWN all Wyoming Electric Companies.
“This is an electricity demand of 5 million homes for outside interests building these data centers — in a state that only has 280,000 homes,” Bouchard continued in the post. “Residential consumers will quickly become second fiddle.”
Recently announced data centers include an AI facility announced by Tallgrass and Crusoe in July for Cheyenne, which will start at 1.8 gigawatts and can scale to 10 gigawatts in all.
There’s also the 1.5-gigawatt data center Prometheus Hyperscale has announced near Casper and a 1-gigawatt data center near Evanston.
Related Companies also recently announced it’s building an up to 302-megawatt facility in Cheyenne, for a grand total of 12.8 gigawatts in new data center processing power in all announced so far.
That doesn’t include recent expansions announced by Microsoft or plans Meta has announced to build a data center in Cheyenne. Neither company has said how much power those facilities will use.
Opposition Rising Across Nation
Bouchard isn’t alone in these types of fears when it comes to power-hungry data and AI centers. Data centers are facing increasing opposition not just in Wyoming, but across the nation.
St. Charles, Missouri, for example, implemented a yearlong moratorium in August against building new data centers. Nearby St. Louis appears poised to follow suit with a similar moratorium after hundreds showed up at a town hall to speak out against a proposed $1.5 billion project that would transform a shuttered facility into two large data centers.
Saline Township in Michigan, meanwhile, rejected a data center project proposed by Related Digital, which would have transformed 250 acres of farmland, after staunch opposition from the community. Ultimately Saline Township had to reverse course after Related Digital and the landowners who would have sold their property for the project all filed suit, calling it a case of exclusionary zoning.
Want To Give Up Your Phone?
Data centers, meanwhile, are probably here to stay, Sen. Cale Case, R-Lander, told Cowboy State Daily.
“Everyone is using their phone so intensely,” he said. “That’s a computer in your hand. And, when you compare, computers 20 years ago, you went to your desk, and you turned it on. You might search for a couple of things.”
Now, though, people are incessantly searching for things all the time. And it’s not just a straight “Google” search anymore.
Artificial Intelligence is now serving up so-called “smart” answers to every query. Those requests take almost 10 times the ordinary computing power of a straight search.
Not only that, but companies are queuing up AI shopping assistants who can create personalized shopping lists as well as manage a budget. Some companies have opened up their entire catalog of goods to AI searches, the better to make product recommendations when people use AI to answer a problem-solving query.
Meanwhile, Mark Zuckerberg thinks that lonely Americans, who he said have just three friends on average and really want 15, will choose to bolster their friend count with AI chums.
Those are just a few of the current and future uses AI plans to provide consumers. Companies are also using AI for all sorts of internal tasks as well, from optimizing distribution networks to optimizing inventories based on point-of-sale data.
Protecting Regular Ratepayers
Given that most people don’t seem ready to give up their cellphones and iPads or really any of the endless array of electronic gadgets driving data and AI centers forward, making sure that regular consumers, particularly senior citizens, don’t play second fiddle to data centers and other large power users is something that particularly concerns AARP Wyoming’s Tom Lacock, associate state director for communications and state advocacy.
“Obviously, that’s a big deal for our members,” he said. “Because we see all of these double-digit rate increases going up year over year. And we represent a group that, unfortunately, doesn’t necessarily have the ability to go back to work or just go earn more money.”
Lacock has been heartened to hear all of the many stakeholders talking about how to deal with data centers in Wyoming agree that regular ratepayers need to be held harmless when new data centers come to call.
“They need to be the ones to pay for the infrastructure, including support to the grid,” Lacock said. “And the hope is to, once again, keep that residential customer held harmless.”
A Head Start?
While everyone seems to agree regular ratepayers must be held harmless, that doesn’t mean there’s a consensus on how to achieve that. It’s something lawmakers are talking about as another legislative session approaches.
It’s a huge topic for Wyoming, Case told Cowboy State Daily, one that he believes has broad implications for the state’s future.
“These things can use more power than entire cities in Wyoming,” Case said. “And, if you think about it, it took 100 years to get to the level of power demand that we have right now.”
To have 12.8 gigawatts of power — 12.8 times more than what the whole state already uses — suddenly show up is nothing less than “astounding,” Case said.
“It’s not just a Wyoming problem,” he added. “Utah is having the same issues. It’s a problem for the entire country.”
He believes Wyoming does have a bit of a head start on handling the issues.
“In Wyoming, we passed a law that says large loads cannot harm other customers,” Case said. “And it’s a law that, at first, was, well it’s still kind of optional, I suppose. But the commission is working on it and evolving it so that it’s a little bit more mandatory.”
A More Robust Electric Grid
Black Hills Energy actually started working on alternative ways to handle large load customers when Microsoft came knocking on Cheyenne’s door in the 2015 timeframe, according to Wyoming Office of Consumer Advocate Director, Anthony Ornelas.
“It was confidential then, but is very public now,” Ornelas told Cowboy State Daily. “At the time, it was a legitimate concern due to the estimated power usage. So we worked with the company, our office did, and developed what we call large power contracts, or LPCs.”
The service contract has been used for all of Cheyenne’s large data centers, Ornelas said.
“I believe they have seven, and soon to be eight, data centers now, in and around the Cheyenne area, and through the use of this LPC tariff, the company has been able to provide that service as a retail customer, and existing customers have been fully insulated from any detrimental rate impact from providing this service.”
In fact, Ornelas believes that ratepayers have seen net benefits.
“Customers have actually received a small benefit from that in terms of helping to pay for some embedded administrative and general costs and some facility and transmission upgrades that have been paid for by these data centers,” he said. “So there hasn’t been any detrimental impact to the other customers.”
That’s an assessment Cheyenne Mayor Patrick Collins agreed with.
“I would argue that we actually get a more robust electric system because of all the work they’re doing to improve our local electrical grid, the substations, and making sure that they have redundancies,” he said. “We’re going to see that in the reliability of our local electric service.”
Wyoming Exports 12 Times More Power Than It Uses
Wyoming is uniquely positioned when it comes to attracting data centers. Not only does it have a mild climate that makes cooling these centers less problematic, but it also exports at least 12 times as much power as it consumes, according to figures from Gov. Mark Gordon’s office.
Many feel it would be better if less of that power were exported and instead used within the Cowboy State.
“Wyoming has long been a powerhouse of American energy production,” Gordon’s spokeswoman Amy Edmonds told Cowboy State Daily.
Edmonds took issue with claims that data and AI centers will raise energy costs for Wyoming families, saying it’s “simply untrue.”
“The state’s innovative approach to large power contract service tariff agreements have been used as a model and help ensure costs for large load energy projects are not passed down to residential ratepayers,” she said. “Under President Trump’s America First energy and technology strategy to fast-track AI and data infrastructure in energy states, Wyoming is leading the way by embracing the future of technology while staying true to our energy roots.”
Bringing Their Own Power
As Case sees it, there are different types of data centers, and each requires different approaches to manage them the right way.
For example, bitcoin mining like any data center may need a ton of electricity, but they can get along well with what’s called interruptible load. That means they can agree to simply be kicked off the system if power demands spike. In that way, they’re not adding to the overall power generation load that a utility needs to create, but they’re helping to buy up surplus power at off-peak times, adding to the overall financial stability of the system.
The other type of data centers are the ones like Meta and Microsoft, which require absolutely certain, 24-7 power.
“But some of them provide their own generation,” Cale said. “And that’s probably a good thing, because you can work with them to back them off the network.”
In the case of the 1.8-gigawatt data center Tallgrass and Crusoe are building in Cheyenne, the plan is to provide their own power.
That’s also the case for Prometheus Hyperscale data centers in Evanston and Casper, according to founder and CEO Trenton Thornock. His projects include a 1-gigawatt facility in Evanston and an up to 1.5-gigawatt facility that will straddle the Natrona County and Converse County line.
“We’re going to tap an existing natural gas pipeline and run that through what’s called a fuel cell to generate power,” Thornock told Cowboy State Daily in an interview last week. “This is something that’s taken off in California, because they’re very power constrained out there.”
While that’s a higher cost for his facility, Thornock believes it makes sense in a power-constrained environment, where there are legitimate fears that data centers are going to spike residential electricity rates, and where waiting times for connecting to the grid are already years long.
“Our plan is not to connect to the local grid,” Thornock said. “We will have zero impact on the local grid or ratepayers. We will be sitting out there by ourselves in an island.”
With Peril Comes Opportunity
Having large data centers generate their own electricity is the approach Rep. Daniel Singh, R-Cheyenne, told Cowboy State Daily he prefers to see.
“I think it’s a danger to hook large entities like this up to our public utilities,” he said. “If they generate their own electricity, they can generate as much electricity as they want, just don’t attach it to anything that would somehow risk raising electricity prices for the average citizen.”
Singh added he’s been told stories about how people went out of their way, going to extremes to avoid using electricity, yet, at the end of the month, their rates were still spiking.
“I don’t think it’s fair that the regular citizen, the average Joe, would have to supplement the cost of electricity for big tech,” he said. “That’s wrong.”
But along with the perils, there are opportunities. The outsized demand for energy molecules — any and all energy molecules — can be an opportunity to bolster legacy energy sources like oil and gas and coal, Singh acknowledged.
“These (data centers) aren’t going to go away,” Singh said. “But I think we can win if we do it right.”
Part of that, in Singh’s opinion, is ensuring that the state fosters an environment where business can generate their own electricity, detached from the grid, if they want to.
“If we do this right, we could simultaneously protect our public utilities and help foster our extraction industry in a way that we shield ourselves from the future impacts of the boom-and-bust cycle, which has been a generational problem,” he said. “This could solve a generational problem if we do it right.”
But it can’t come at the expense of regular electricity customers.
“The legislature needs to take an aggressive stance in classifying data centers specifically as a different kind of customer for electricity,” Singh said. “To ensure that these data centers are generating their own electricity.”
Communities, too, have a whole host of questions they need to answer about data centers, he added.
“How will this affect noise pollution?” he said. “How will this affect your ability to see the night sky? How will this affect local traffic and the feel of your local community and neighborhood? These are all serious factors, and I think we need to address them.”
Renée Jean can be reached at renee@cowboystatedaily.com.
