CNP.US: AI Eats Power, Texas Data Center's Waiting List Demand Rises 700%

Zhitong Finance learned that CNP.US discovered that requests from data center developers to connect to its Houston-area utility companies increased by 700% in a few months. On Monday, CNP's CEO Jason Wells said during a conference call with analysts that the waiting capacity of the Houston area utility companies for data centers increased from 1GW before the summer to 8GW now. The company confirmed by email that the planned development project is completely located near Houston, the largest city in Texas, and the facilities supporting artificial intelligence may be the main reason for this growth.

Wells said during the conference call: "We saw a fundamental shift in data center development all summer. While we recognize not all of this will be developed, we still believe it is one of the most tangible long-term growth stories in the industry."

The construction of data centers of some of the world's largest technology companies will accelerate the growth of electricity demand. The demand for electricity has been rising due to the population boom and electrification in Texas. Wells said that the peak demand of CNP's project for the Houston area utility may increase by more than 30% from about 22GW this year to 2030.

CNP operates one of the most stressed local grids in the country and has been under public and regulatory scrutiny after the extreme storm that hit Houston earlier this year, which caused power outages. The company is struggling to cope with the emergency as Hurricane Beryl cut off power to more than 2 million households and businesses in eastern Texas in July, leaving most of Houston without electricity for several days.

State regulators and the main grid operator in Texas are closely monitoring the infrastructure construction needed to support data centers and its impact on household utility bills. Officials said that the largest data center developers in the tech industry, known as hyperscale companies, will need to pay a larger share of these investments as they are driving more electricity demand growth.