Trends and Challenges in Data Center Power Supply

This document is a client alert that discusses the intersection of data centers and power supply, focusing on the trends, challenges, and opportunities arising in this sector. It outlines how advancements in artificial intelligence are driving the demand for new data centers, which in turn increases the demand for electric power and affects power prices. The alert details the shift towards 'behind-the-fence' development configurations to bypass traditional power grid interconnections and highlights the evolving siting choices for data centers. The document also examines the legal and regulatory challenges associated with unprecedented power supply arrangements, including the Federal Energy Regulatory Commission's (FERC) review of a nuclear power plant's reconfiguration to directly power a data center. Furthermore, it notes the increasing political attention on grid reliability and the implications of data center growth on ratepayers. The alert emphasizes the need for strategic advice on optimizing power supply structures while minimizing regulatory burdens.