Exelon Reports 80% Growth in Data Center Power Deals

Exelon has visible An 80% increase in the number of power supply deals coming from data entry operators is the latest sign that the IT industry is driving a surge in US power demand.

This growth has materialized since the start of the year and has sparked debate about the allocation of costs associated with expanding network infrastructure and increasing supply.

In Exelon’s territory, power demand from data center operators reached 11 GW in the third quarter, up from 6 GW in the second quarter, the company said in its third-quarter earnings report. Exelon has yet to create this capacity, which will be part of its investment plan, which amounts to $34.5 billion for the period until 2027.

Reuters, in a report on Exelon’s demand development, noted that the company is challenging the priority status granted by regulators to data center operators that locate their facilities on power plant sites – what is commonly known as colocation.

Currently, the Federal Energy Regulatory Commission allows operators of such data centers to connect directly to the power plant, bypassing interconnection procedures. That could lead to higher prices for other customers and negatively impact grid reliability, according to Exelon and its counterpart at American Electric Power.

“We’re not opposed to co-location,” Exelon CEO Calvin Butler said during the company’s third-quarter earnings call. “We simply believe that everyone should pay their fair share to use the network.”

Data centers have become perhaps the largest source of additional electricity demand in the United States as major technology companies race to push ahead with the development of artificial intelligence systems. They consume huge amounts of electricity, which must be available on demand.

This additional demand for reliable electricity has drawn attention to natural gas and nuclear power as baseload alternatives to Big Tech’s previous darlings, wind and solar. He also highlighted the limitations of the network, which cannot be overcome quickly.

Charles Kennedy for Oilprice.com

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