On the other hand, data center and utility infrastructure projects face a host of challenges. These include both physical constraints, such as equipment and labor shortages, as well as mounting public opposition driven by concerns about large-scale computing facilities’ impact on water supplies, the cost and reliability of power and natural gas supplies, and the quality of life in host communities.
The upshot is that even some data center development projects advanced enough to appear in utility load forecasts with a named hyperscaler attached are not certain to move forward.
Near Grand Rapids, Michigan, for example, a Microsoft data center touted by Consumers Energy faces an uncertain future amid local permitting delays. Another Microsoft-backed data center in Vineland, New Jersey, was recently hit with a $1 million fine for running dozens of gas-powered generators without the proper permits, and ordered to obtain them within 45 days or shut down.
A proposed Google data center that would interconnect in Xcel Energy’s Minnesota territory faces a court-ordered work stoppage to allow time for environmental review.
Last week, Oracle moved to protect itself financially from the delay or cancellation of Project Jupiter, a massive, 2.5-GW data center campus planned for Doña Ana County, New Mexico, after state regulators blocked a gas pipeline proposed to serve it.
Data center opposition “has reached a pitch I have never seen before in my 20-plus years in development,” Blake Nixon, president and CEO of Geronimo Power, told Utility Dive in an interview.
This spring, officials in Nobles County, Minnesota, shot down a proposal by Geronimo to build a 400 MW “data park” there, despite the company’s efforts at community outreach. Now, Nixon said his team is considering alternative sites in nearby communities.
“[Data centers] are running into physical problems that are manifesting as market problems, political problems, regulatory problems and ultimately problems down on the ground,” he said.
In May, Goldman Sachs said only 50%-60% of planned data center capacity will come online as expected in the next two years amid delays and cancellations.
And while the 36 GW of capacity added to the development pipeline in the first quarter of 2026 sounds impressive, that’s down 19% from the last quarter of 2025 as developers “continue to shift their focus to existing … pipelines in the face of an increasingly challenging development and regulatory environment,” Caitlin Connelly, a senior analyst with Wood Mackenzie, said in a July note.
Experts say these developments raise questions about just how much data center load will come online in the near term — injecting unwelcome uncertainty into utility planning cycles that must look years, even decades, into the future.
In the PJM Interconnection, real or perceived power scarcity is a major driver of both local opposition and top-down political backlash to the industry. The independent market monitor in July blamed data centers for 38% of charges at the most recent capacity auction.
The Democratic governors of Pennsylvania, Virginia and New Jersey have taken action in recent months to push regulators to require data centers to bring more generation and transmission capacity online.
These moves are not only in PJM states with Democratic governors. Power scarcity and cost concerns have triggered organized opposition and political backlash to data centers in places developers until recently believed were sympathetic to their cause, like Texasand Utah.
Texas Gov. Greg Abbott, R, successfully pushed for a sweeping pause on data center grid interconnections that threatens up to 20% of the total U.S. development pipeline, BloombergNEF said earlier this month.
Utilities and data centers are responding in several ways.
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