Rising electricity demand driven by power-hungry data centers was top of mind as policymakers, advocates and researchers gathered in Denver on Tuesday to begin a conference on how the Western U.S. can strengthen and modernize its regional grid.

“Energy from all sources needs to be moved,” Colorado Gov. Jared Polis said in remarks that opened the two-day policy workshop on energy transmission hosted by the Western Governors’ Association at the Thompson Hotel. “We want a lower-cost grid, we want a more resilient and reliable grid, and transmission is absolutely critical to achieve that.”

The workshop is the second in a series of events in the WGA’s “Energy Superabundance” initiative, spearheaded by Utah Gov. Spencer Cox, who was named chair of the association in July. Founded in 1984 and headquartered in Denver, the bipartisan WGA facilitates regional policy development and collaboration between the chief executives of 22 Western states and U.S. territories.

Demand for electricity in the West is forecast to increase by more than 20% over the next decade, the Western Electricity Coordinating Council estimated in its most recent assessment of “resource adequacy.” That estimated demand growth has doubled over the last few years, and it’s more than quadruple the demand growth rate of 4.5% that the region saw between 2013 and 2022.

The vast majority of that demand growth is attributable to new and expanding data centers, which consume large amounts of power to serve artificial intelligence companies, cloud computing services and other related technologies.

“(Data centers) consume immense amounts of energy, can be constructed quickly, have different consumption patterns, and require changes or additions to infrastructure,” the WECC wrote in its 2024 assessment. “In some cases, large loads require a steady supply of power at all times, while in other cases, their demand can fluctuate, creating a need for large ramping capability.”

In the southwestern subregion that includes Arizona, home to the West’s largest concentration of data centers per capita, demand growth is projected at almost 35% by 2034, according to the WECC. Nationwide, a Carnegie Mellon University study published in July estimated that the demand surge could increase costs for residential ratepayers by 8% as electric utilities struggle to add enough generating capacity to keep up, with higher rate spikes in areas with high concentrations of data centers.

“If we want to meet demand growth and maintain reliability at lowest cost, we have to more than double our transmission system in the next 25 years,” Leah Rubin Shen, a managing director at trade group Advanced Energy United, said Tuesday during a panel on transmission needs.

Higher-capacity and more interconnected transmission grids allow loads to be “balanced” regionally as electricity usage and generation varies by time and place. But achieving those goals is especially challenging in the Western electricity market, which is made up of dozens of electricity providers, utilities and co-ops whose transmission infrastructure traverses vast geographical distances and is increasingly threatened by extreme weather conditions caused by climate change.

“The three keys of transmission — planning, paying and permitting — those are hard everywhere. I think they’re perhaps uniquely hard in the West,” Rubin Shen said. “It’s difficult to do all of those things out here.”

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