Powering Growth: Utilities, Data Centers, and Energy Demand
Balch partners Ricky Cox and Leo Manuel discuss how rapidly growing electricity demand—driven by artificial intelligence, expanding data center development, and other large-load customers— is creating new challenges for utilities, and what utilities, data center developers, and other large-load energy customers should consider as they plan for the future.
Rapidly growing electricity demand—driven by artificial intelligence, expanding data center development, and other large-load customers—is creating new challenges for utilities and the companies driving that growth. After years of relatively flat load growth, utilities are planning for significant investments in generation and transmission infrastructure to meet increasing demand while maintaining reliable and affordable service. At the same time, utilities, data center developers, regulators, and other large-load energy users must work together to ensure the costs of serving new demand are allocated fairly while navigating a complex and evolving regulatory environment.
GET AHEAD OF THE CURRENT
In Balch & Bingham’s Get Ahead of the Current Video series, our attorneys share insight on the issues shaping the energy industry and other highly regulated sectors, along with the experience, perspective, and client-focused approach they bring to helping organizations prepare for what’s next.
Ricky Cox is a partner in the firm’s Gulfport, Mississippi office and member of the Energy Practice. He enjoys a diverse practice representing clients in a variety of utility and commercial matters. He focuses on state and federal energy regulation and rate proceedings; energy and utility litigation; and energy project development and transactions for regulated utilities and independent power producers, including renewable energy project development and sales agreements. In addition, Ricky regularly represents clients in water and sewer utility regulation, transactions, and litigation; business entity selection, formation, and operation; corporate finance; contract negotiation and administration; mergers and acquisitions; corporate compliance activities; securities matters; and real estate transactions.
Leo Manuel is a partner in the firm’s Gulfport, Mississippi office and member of the Energy Practice. Leo has a diverse legal practice in the areas of renewable energy development, public utility regulation, economic development, commercial litigation and transactions, and general corporate governance. Leo possesses twenty years of experience in very large and complex commercial and energy legal matters ranging from asset merger and acquisition to multi-billion-dollar project permitting and rate cases. Leo's experience and diverse knowledge base has been leveraged to create favorable outcomes in the courtroom, at the negotiation table, and in the regulatory hearing room.
EXTENDED TRANSCRIPT:
Leo: There is nothing that an energy company can run into that we have not done and have not done for decades.
Ricky: One challenge utility companies are facing today is the growth of large load customers, particularly data centers, AI data centers, hyperscalers, and the enormous appetite for electricity that they present. It really represents a unique challenge in a time where many utilities were anticipating relatively flat load growth. These large customers coming in in waves of enormous appetites for power are requiring companies to rethink their plans for load growth, their generation and transmission infrastructure capabilities. It is a very complex problem and these are very sophisticated customers that are coming into service areas all over the country and a lot of the ones that we represent and would like to represent.
Leo: And the way to face that is to ensure that the entities and the customers driving that growth are covering the costs associated with serving that growth so that all the existing customers are treated fairly and everyone can enjoy in the growth that promises to deliver.
Ricky: Every entity in state government from the executive branch to the legislative branch and the judicial branch are all having input plus federal regulators are having input. And the job for a lawyer like us, like at Balch, is to be able to navigate all of those complexities for whether it's the data center customer we're representing or an incumbent utility regulated utility we're representing to be able to navigate a fairly complex and dynamic industry.
Leo: Electric utilities facing load growth challenges today would need be to be methodical and to be patient. These customers are sophisticated however they need. They need to grow as much as the utility does and if you stick with it, you will find the right payer and you will get a deal that is good for everybody. And that is what's ultimately important. It's what your regulators will require. It's what your customers will require and it's ultimately what all your stakeholders will require.
Leo: Dealing with data center growth, Balch is uniquely prompted because we've been on both sides of the ledger. We've negotiated on behalf of large load customers. We've negotiated on contracts on behalf of utilities and we've done that in pretty much every sector of the country and that is the exact reason why Balch is keeping our clients ahead of the current.
Ricky: It’s in our DNA. It is in our DNA. We have been representing the electric utility industry since the law firm was founded. So there's hard to find a deeper set of expertise, more experienced set of lawyers, and really a legacy of service to the utility industry.
Leo: There is nothing that an energy company can run into that we have not done and have not done for decades and perhaps even close to a century. And the folks that are experts are experts in their discrete field and they were trained by the experts before them. So there really is no other firm that has the concentration and breadth and spectrum of expertise that energy companies require such that we're sort of tailor made for energy companies.
