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Data centers can affect a community through three connected systems: the electricity grid that serves their large, often continuous loads; the water supplies used directly for cooling and indirectly to generate electricity; and the utility rates that determine who pays for new power and infrastructure. The scale of the effect depends on the facility’s location, design, resource needs, and the decisions made by utilities and regulators. National electricity forecasts show sector-wide growth, but do not prove that a particular facility will cause a local outage, water shortage, or increase in household bills.
How large is data-center electricity demand?
Data centers use electricity to run computing equipment and the supporting systems that keep it operating, including cooling. Their demand matters to the grid because an individual facility can be a large load concentrated in one place and may need power continuously. The effect is not determined by the national total alone: it depends on where a center connects, how much spare generation and network capacity is available there, and when new power resources and grid upgrades can be built.
The latest located national forecast is the Lawrence Berkeley National Laboratory (LBNL) 2025 Update, published June 18, 2026. It estimates that data centers could use 11.8% of total U.S. electricity by 2030, with a scenario range of 9.5% to 15.3%. These are projections, not a guaranteed outcome or a forecast for any particular state, utility, or community.
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|---|---|---|
| 2023 electricity use | About 4.4% of total U.S. electricity | LBNL’s 2024 report, as summarized by the U.S. Department of Energy (DOE), estimates use for 2023. |
| 2028 projection | About 6.7% to 12% of total U.S. electricity | This is the range in LBNL’s 2024 report, summarized by DOE; it is a projection for 2028, not a later measurement. |
| 2030 projection | 11.8%, with a 9.5% to 15.3% scenario range | LBNL’s 2025 Update, published June 18, 2026. The range reflects different scenarios. |
The figures show why planners are paying attention to data-center demand, but they cannot identify which grid will face a constraint. Forecasts can also change as computing workloads, including AI, grow or shift; as energy efficiency changes; and as generation and grid construction advance. The 2024 estimate is useful for understanding how the outlook has evolved, while the 2026 update is the more current national forecast.
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Will a new data center strain the local power grid?
It may create a planning challenge if the facility’s load exceeds capacity available at its proposed connection or if the necessary generation, transmission, or distribution upgrades cannot be delivered in time. DOE describes regional impacts associated with steep load increases and continuous-power needs. LBNL’s grid-planning work also identifies connection, planning, reliability, and affordability challenges associated with large loads. Neither point establishes that every proposed center will strain its local system.
A connection delay and a reliability failure are different things. A utility may need to study a proposed load, arrange new service, or complete upgrades before it can connect the facility. That delay is evidence of a planning or construction constraint, not proof that customers have experienced an outage. The sources summarized here do not establish that a specific data center caused a particular outage.
What determines the local grid effect?
- Available capacity: Whether the relevant utility and regional system have spare generation and enough transmission and distribution capacity at the point of connection.
- Incremental demand: The project’s expected peak load and annual electricity use, not simply its acreage or number of buildings.
- Infrastructure and timing: Which upgrades are required, who will build them, and whether they will be ready before the facility needs service.
- Operating flexibility: Whether the operator can shift or reduce demand at times of grid stress, and whether it plans on-site generation or storage.
These questions help distinguish a large but manageable new customer from one whose service depends on major additions to local or regional infrastructure. On-site generation or storage may affect how a project interacts with the grid, but a proposal should be assessed on its actual operating plans and utility studies rather than on the mere presence of equipment.
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How much water does a data center use?
There is no single defensible water-use figure for an unnamed data center. Direct facility use depends on its cooling system, local climate, workload, water source, and operating practices. An estimate for one facility cannot safely be applied to another without those details. To understand local effects, ask how much water the project expects to use, where the water will come from, and how the forecast compares with local supply and water stress.
There are two different pathways to consider: water used at the facility and water associated with the electricity it consumes. A data center may use water directly for cooling, while electricity generation can also require water. The indirect amount therefore depends partly on the facility’s power supply. Looking only at water used on the site can miss that second pathway; looking only at an electricity-related estimate can obscure the facility’s local withdrawals or consumption.
Withdrawal is not the same as consumption
Water withdrawal generally refers to water taken from a source; consumption refers to water that is not returned to that source in the same way or at the same time, such as water lost through evaporation. Those measures answer different questions about pressure on a watershed or supply system. If a project report gives only one measure, do not treat it as a complete account of both. Ask for the measure, time period, source, and whether the figure describes peak or annual use.
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Cooling choices involve trade-offs
Cooling design can shift impacts rather than eliminate them. UC Berkeley’s Center for Law, Energy & the Environment (CLEE), in a 2026 review focused on California, reports that more water-efficient cooling strategies can require more energy. That makes it important to consider the water and power effects together, rather than treating either resource in isolation. The right comparison depends on local hydrology, the electricity supply, the facility’s design, and the time periods used in its estimates.
The UC Berkeley report authors—Marie Grimm, Nell Green Nylen, and Michael Kiparsky—identify siting in areas with lower water stress, appropriate cooling-system selection, and recycled-water use as available levers for reducing a data center’s water use. Recycled water may reduce reliance on potable supplies, but whether it is available and suitable is a local question. Siting and design decisions can also involve trade-offs with grid capacity and other community needs.
Do data centers raise my electric bill?
Not automatically. A data center can prompt investment in electricity supply or grid infrastructure, but the existence of a project does not establish that household bills will rise. The outcome depends on the utility’s tariffs, how regulators allocate and approve costs, how costs are recovered, and whether the large customer pays for the share attributable to its service. Load flexibility may also affect the amount or timing of system investment needed.
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Costs can arise from different parts of the system, including power supply and network upgrades. The key question is not just whether the utility spends money, but which customers are assigned those costs and under what approved rules. A large-load tariff may include charges or commitments that affect the facility’s contribution. Cost-allocation decisions and provisions addressing unused or stranded infrastructure can also matter if a project changes plans or closes. The applicable tariff and regulatory decision—not a national electricity-use share—are what can show how a particular proposal is treated.
LBNL is studying emerging approaches to large-load cost allocation and rate design, including whether flexible demand can mitigate potential increases. The evidence summarized here does not settle the impact on any named utility’s current residential rates. A project-specific bill claim needs local documents and a clear explanation of how the estimated cost would reach residential customers.
How to assess a proposed data center in your community
Use the same project-specific questions for power, water, and cost. A proposal’s headline investment or national-sector forecast cannot substitute for load profiles, service agreements, water forecasts, and regulatory filings. The following checklist identifies the information that makes the likely local effects easier to evaluate.
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Power and grid capacity
- What are the facility’s projected peak demand and annual electricity use, and when will those loads come online?
- What capacity is available at the proposed grid connection, and what generation, transmission, or distribution upgrades are required?
- Who will fund, own, and maintain each upgrade, and what happens to the costs if the project is delayed, reduced, or canceled?
- Can the operator curtail or shift demand during periods of grid stress? Are on-site generation or storage part of the plan, and how will they operate?
- What do the utility’s load forecast, power-system studies, and construction schedule say about the project’s connection and service?
Rates and cost allocation
- Which customer class and tariff would apply to the facility? What minimum demand, contract commitment, or other charges would it face?
- What do the utility filing and regulator’s decision say about allocating new supply and network costs between the data center and other customers?
- Are there exit or stranded-asset provisions if the facility uses less capacity than expected or stops operating?
- Does the filing include a residential bill-impact analysis? If so, what assumptions connect the project’s costs to household rates?
Water and local conditions
- Will the facility use potable water, groundwater, surface water, or recycled water? Identify the source and the agency responsible for service.
- What are projected peak and annual withdrawals and consumption, and does the reporting distinguish between them?
- What cooling system is proposed, and how does its water use compare with its energy needs?
- How do the forecast and source relate to local drought exposure, watershed conditions, and available water-system capacity?
- Will water use be reported publicly after the facility opens, and which agency will monitor compliance?
Governance and follow-through
Ask whether the relevant documents are available for public review and whether permit conditions require ongoing monitoring and disclosure. Useful records include a utility service agreement and load profile, power-system studies, public utility commission filings, a water-service agreement, water-use forecasts and actual-use reports, the cooling design, and local drought or watershed information. Responsibility may be divided among the electric utility, water provider, regulators, and local permitting bodies, so identify which agency can answer each question.
What California’s water review does—and does not—show
California illustrates the difficulty of assessing facility-level water effects when reporting and governance are incomplete. UC Berkeley CLEE’s 2026 review found that existing California requirements had not produced a clear understanding of data-center water use and that local decision-makers lacked guidance. Its recommendations include better transparency, stronger local capacity, incentives for recycled water, and site-specific review of siting and design.
Those findings are specific to California; they should not be presented as a description of every state’s rules or every data center’s water use. They do show why a national water-intensity average is a weak substitute for facility-level figures and local water conditions. A credible assessment needs to connect the project’s design and reported use to the water source and the community’s capacity to supply it.
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