Axios Live: Proliferating data centers draw focus to power supply and expense

WASHINGTON, D.C. — Diverse energy sources are vital to keeping costs down, policymakers said at a Feb. 25 Axios Live event.

The big picture: With the artificial intelligence explosion driving rapid data center expansion, the resulting energy demand is raising concerns about supply — and who will pay the bills.

Axios' Chuck McCutcheon and Ben Geman spoke with former Virginia Gov. Terry McAuliffe (D), co-chair of Natural Allies for a Clean Energy Future National Leadership Council; and Alex Fitzsimmons, acting undersecretary at the U.S. Department of Energy and director of its office of cybersecurity, energy security and emergency response.

Driving the news: The Trump administration has announced a "ratepayer protection pledge" that calls on Big Tech to cover its own electricity needs amid the data center boom.

• "The hyperscalers realize that if they want to be politically or economically sustainable in the long term, they have to do what President Trump said, which is bring your own power, and then some," Fitzsimmons told Geman.

Yes, but: The administration's announcement was short on specifics.

Virginia has found some strategies for data center expansion and expenses, McAuliffe told McCutcheon.

• "Loudoun County, Virginia, today, gets about $990 million in tax revenue from our data centers," McAuliffe said. "That is a third of Loudoun County's budget."

Diverse energy sources are essential, McAuliffe added.

• The Democratic Party "needs to get better on gas," he said. "We need more gas infrastructure in the country with AI data centers, [which are] going to require three times more energy."
• "So what do we do? I'm building turbines, I'm building wind farms, I'm putting solar in, but I've got to meet the demand today."

What's next: The Department of Energy announced a $26.5 billion loan to Southern Company, Georgia Power and Alabama Power, Fitzsimmons said.

• It is "the single largest loan that the Department of Energy has ever made … [and] the single largest loan the federal government has ever made outside of the financial crisis."
• "That loan is going to save ratepayers in Alabama and Georgia $7 billion" over its lifetime, Fitzsimmons told Geman.

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In a View From the Top conversation, NEMA president and CEO Debra Phillips and Deni Miller, ABB U.S. & Mexico distribution solutions business line leader and U.S. electrification business lead, discussed concerns about permitting bottlenecks with Axios publisher Nicholas Johnston.

• The electrical industry "is ready" to meet the moment, Phillips told Johnston, "but we can't do it alone."
• "We need our grid partners [and] we need our policy partners to create an environment where we can expand, grow, meet the growing demand for electricity — which we think is going to be 55% between now and 2050."