(Bloomberg) -- CenterPoint Energy Inc. has seen a 700% increase in requests from data center developers to connect to its Houston-area utility within months.
The Greater Houston’s utility’s queue from data centers now tops 8 gigawatts, up from 1 gigawatts before summer, CenterPoint Chief Executive Officer Jason Wells said on an earnings call with analysts Monday. The company confirmed via emailed responses that this planned development is located entirely around Houston, Texas’ largest city, and facilities supporting artificial intelligence are likely the leading cause of the increase.
“Over the summer, we have seen a fundamental shift in data center development,” Wells said on the call. “While we recognize that not all of this will be developed, it is yet another tailwind in what we continue to believe is one of the most tangible long-term growth stories in the industry.”
Data center construction from some of the world’s largest tech companies is poised to accelerate electricity-demand growth already on the rise from Texas’ population boom and increasing electrification. CenterPoint projects that peak demand on its Houston-area utility could increase by more than 30% by 2030 from this year’s high of about 22 gigawatts, Wells said.
CenterPoint, which operates one of the most stressed local power grids in the country, has come under public and regulatory scrutiny following outages related to extreme storms slamming Houston earlier this year. Hurricane Beryl cut power to more than 2 million East Texas homes and businesses in July, leaving much of Houston sweltering without power for days as the utility struggled with emergency response.
State regulators and the main Texas grid operator are closely watching the buildout of infrastructure needed to support data centers and its impact to household utility bills. Officials have said hyperscalers, the tech industry’s biggest data center developers, will need to pay for a bigger share of these investments as they are driving more of this power-demand growth.
©2024 Bloomberg L.P.