Read the story: Oklahoma’s data center boom is about to hit the grid — and your power bill
Data centers are being drawn to Oklahoma by cheap land, tax breaks, and access to electricity. But as these projects scale up, they can put pressure on the electric grid. Utilities are warning that they’ll need major upgrades to keep up, and those costs could ultimately fall on everyday Oklahomans.
Frontier reporter Clifton Adcock has been tracking this boom for months, and his latest investigation breaks down what these facilities really demand, how state leaders are talking about it, and what the public isn’t being told about who pays for all this growth.
I sat down with Clifton to talk about his reporting, see what surprised him most, and look ahead at the questions he’ll be chasing next. Here’s a condensed version of our interview. For the full interview, listen to our podcast below.
The Frontier: For people who haven’t read the story yet, what’s the big takeaway?
Clifton: The big takeaway here is that, according to PSO and OG&E, the two biggest electrical utilities in the state that are regulated by the corporation commission, they are predicting that they are not going to be able to generate enough power in the next few years to meet the demand for electricity caused by these data centers.
And so they’re going to have to go out and either build or buy new generation resources or battery storage resources in order to meet that demand. And to do that currently, the plan has been to spread the costs out to build or buy those generation resources among all rate payers and so that would obviously impact residential customers’ bills.
The Frontier: What did you learn about the scale of these projects that surprised you?
Clifton: According to the electrical utilities, they’ve never seen so much demand for electrical load. A large customer 10 years ago would have been a 50-megawatt facility. Now they’re seeing regular 100-megawatt facilities – twice the amount of power required to get energy to this place. And you can even get up into gigawatt data centers in some cases, which is 1000 megawatts.
The Frontier: Do utility officials or state leaders see this boom as a good thing?
Clifton: A lot of what you’re getting from the state officials is sort of a mixed bag. It depends on where they fall politically on the issue. But from the governor’s office, you’re hearing that this is a good thing. A technological revolution is here, and we’re going to be part of it and try to latch onto that momentum.
Stitt will say that it’s not only going to create jobs, which the data centers themselves don’t create a ton of permanent jobs, but the capital investment to build these places is there and important. You’ll have electricians’ unions, you’ve got heating and cooling systems, and companies that work on those systems will all be benefiting from it. On the other hand, you have people concerned this is going to affect people’s electrical prices. And there’s other concerns, such as land use, so it’s sort of a mixed bag. You have some legislators who are more skeptical of it, for sure.
The Frontier: You mention in the story that the costs of upgrading the grid could end up on ratepayers. What should people understand about how that works?
Clifton: So the latest case with OG&E that came before the Corporation Commission is sort of the template that PSO is also using too. The OG&E case was decided by the Corporation Commission. They actually allowed for some cost recovery for these two new gas-fired units they’re wanting to build, but they rejected a lot of the plan that OG&E had. PSO’s is kind of the same thing.
Currently, data centers and these other large load customers get lumped in with commercial or industrial users. So what a large load tariff would do, is it would create its own rate class for large-load users, like data centers, and according to AARP and some of the folks who’ve advocated for this, they could put more of the cost of these upgrades on the cost causers, right so that so the data centers would be paying more for their own their own upgrades. Right now, the way it stands, it gets spread out among each of those classes, including residential. And residential users, because there’s more of them, often pay a bigger percentage of the costs of these things.
The Frontier: Looking ahead, what are the next big questions you want to keep reporting on?
Clifton: One area is definitely the unregulated utilities, such as Grand River Dam Authority, and some of the electrical co-ops, looking at how they’re going to be dealing with this. Another one is going to be the water issue. That’s a big issue at these town halls where they’re talking about data centers. Is the water going to be safe once it goes through the system and back into the environment? How much water do they actually use and don’t put back into the environment? Then there’s the tax incentive issues. If you notice with each one of these data centers that pop up, there’s also a TIF or a tax increment district that’s at the local level, in order to cap property taxes and help finance some of the construction. So I think each one of those is going to bear looking into, and we’re probably going to try to dig into each one of those topics and more as they come up.
Dylan Goforth helped launch The Frontier in 2015. He became Executive Editor in 2017. He covers politics and criminal justice.
Contact: dylan@readfrontier.com or 918-931-9405.
