Utah’s burgeoning data center industry is grappling with significant power supply challenges, forcing developers to seek alternative energy solutions to keep pace with their growing demands. From cities like Eagle Mountain to rural Millard County, the state’s energy infrastructure is being stretched thin as artificial intelligence (AI) and other data-intensive industries expand at a rapid pace.
In Millard County, developers are already planning to build self-sustaining energy systems to power massive new data centers. Joule Capital Partners, for instance, is working on a 4,000-acre site that will rely on 69 natural gas-powered generators for each of its six planned buildings. This approach reflects a growing trend among developers who are sidestepping Utah’s primary electricity provider, Rocky Mountain Power, due to its inability to meet the industry’s increasing energy demands.
Mark McDougal, a managing partner of Joule’s project, explained the decision, stating, "We are so excited for other alternative energy sources like geothermal and solar and wind and someday, maybe even nuclear. But we can’t wait for that." Natural gas, he added, is a proven technology that can run reliably around the clock.
Nearby, Creekstone Energy has similar plans. CEO Ray Conley highlighted Millard County’s unique advantages, including its proximity to a natural gas pipeline and major transmission lines. "Having both of those in the same place", Conley said, "and not having a large metropolitan area that is competing for power is a very unique combo."
The strain on Utah’s energy grid is particularly evident in Eagle Mountain, a rapidly growing city home to data centers operated by tech giants such as Meta and Google. Google has even delayed its plans to build a new campus in the city because of power constraints. In response, local officials have explored innovative solutions, including the controversial idea of building small nuclear reactors.
"It means our city would become a radioactive storage site", said Joy Rasmussen, an Eagle Mountain resident who expressed concerns about the potential environmental and safety risks of nuclear development.
Despite these challenges, Eagle Mountain officials remain optimistic about the economic benefits of data centers. These facilities contribute significant tax revenue and create some construction, maintenance, and security jobs. However, the long-term employment impact tends to be limited, as data centers are not labor-intensive once operational.
Utah lawmakers have taken steps to address the power challenges associated with data centers. Last year, the Legislature passed SB 132, which allows private companies with energy demands of 100 megawatts or more to build their own power-generating facilities. The bill’s sponsor, Sen. Scott Sandall, explained the policy’s intent, stating, "It kind of un-handcuffs Rocky Mountain Power to provide these loads for data centers, for AI, for large manufacturers… those that are coming in, and quite frankly, changing the curve of power demand."
The legislation is aimed at reducing the impact of data centers on the state’s traditional grid and protecting everyday ratepayers from potential cost increases. Michele Beck, director of the Office of Consumer Services, praised the bill, calling it "one of the best ideas out there" for ensuring that power customers are not unfairly burdened.
While natural gas is viewed as a stopgap solution by data center developers, environmental advocates have raised concerns about its impact on Utah’s air quality. Logan Mitchell, a climate scientist and energy analyst for Utah Clean Energy, criticized the reliance on natural gas, saying, "Natural gas is an old greenwashing term. The fuel is methane, a potent greenhouse gas. Burning it produces carbon dioxide, nitrogen oxides, and other pollutants."
These emissions add to the air quality challenges already faced by the state, particularly along the Wasatch Front. Although recent efforts have improved wintertime inversion pollution, the influx of new data centers with their emissions-heavy power systems could undo much of that progress. "They’re eating into all of the progress we’ve made to reduce emissions from other sources", Mitchell warned.
Utah’s leaders are exploring long-term energy solutions to sustain the state’s growing data center industry while addressing environmental concerns. Gov. Spencer Cox has championed "Operation Gigawatt", an "all-of-the-above" energy strategy that includes nuclear power. However, small modular nuclear reactors, seen as a cleaner alternative to fossil fuels, are at least a decade away from becoming operational. In the meantime, renewable energy options such as wind and solar have taken a backseat in the state’s planning.
"People see renewable energy as the woke liberal energy, and we have to stick with fossil fuels and nuclear because that’s what conservatives want", said Ed Stafford, a professor of marketing at Utah State University. He called the politicization of energy development "a bad thing", emphasizing the need for cleaner, more affordable solutions.
For now, Utah’s data centers must navigate the precarious balance between meeting their energy needs and mitigating their environmental impact. As Conley noted, "Diversification reduces risk", but the path to a sustainable energy future for Utah remains uncertain. The state’s efforts to position itself as a tech leader will depend on its ability to reconcile these competing priorities effectively.
