Data center slowdown fears are overblown, utility chiefs say

Utility chiefs see no slowdown ahead

Every utility CEO at the Edison Electric Institute's annual conference in Arizona said they anticipate no slowdown in electricity growth expectations from data centers.

Texas is the key battleground

Incoming Texas Governor Gina Hinojosa and incoming Senator James Talarico campaigned on addressing what they believe are affordability issues around data centers.

Governor Abbott already paused permits

Current Governor Greg Abbott has quietly put his own pause on data center permitting in Texas, a delay that has been underway for a few weeks.

Power lies with two agencies

The Public Utility Commission of Texas and the Texas Commission on Environmental Quality control data center permitting. PUCT chair Thomas Gleeson serves through September twenty twenty-nine.

TCEQ is the last stand

The Texas Commission on Environmental Quality, run by Brooke Paup, is largely the last stand for permitting new data center builds. Paup was appointed by Governor Abbott and serves through next year.

Buildouts will move, not stop

If data centers are blocked in Texas, they will likely be built in Louisiana, Oklahoma, or other states. Louisiana Governor Jeff Landry and Oklahoma are already recruiting companies.

Not all planned centers will happen

Some data centers were shelved before the election. Others may be canceled due to public pushback or because companies realize they have enough compute capacity.

Goldman Sachs sees modest risks

Goldman Sachs expects newly elected Democratic governors to impose moratoria on new data centers, but these will likely only impact projects not yet permitted, leaving most twenty twenty-seven construction unaffected.

AI spending boom continues

Goldman Sachs still sees spending on AI-related hardware coming in around one point four trillion dollars by the end of next year, meaning the spending boom will keep going.

Electricity demand has other drivers

While data centers drive electricity demand, electric cars, reshoring manufacturing, and electrification of everything will also grow the need for more gigawatts.

No CEO hinted at downturn

Not Exelon's Calvin Butler, not Entergy's Drew Marsh, and not Drew Maloney, head of EEI, hinted at any downturn in electricity growth estimates.

First Solar gets upgraded

William Blair upgraded First Solar to Outperform, believing new Congress and state governorships will benefit utility-scale solar. Texas is the largest builder of solar.

Barclays likes NiSource and Xcel

Barclays' Nicholas Campanella likes NiSource and Xcel Energy, saying political outcomes may drive investors to utilities with more stable and established data center policies.

Xcel works with Alphabet

Minnesota-based Xcel Energy operates in eight states and is working with Alphabet on a massive new data center. CEO Bob Frenzel is confident they can navigate it.

ExxonMobil seen as safe play

Bernstein analyst Bob Brackett likes ExxonMobil as a barbell play between natural gas and refined products. He has an Outperform rating and one hundred eighty six dollar target.

Expand Energy is gas behemoth

Expand Energy, the combination of Chesapeake Energy and Southwestern Energy, is a natural gas behemoth. Brackett has a one hundred thirty nine dollar target on the stock.

Cheniere breaks out on Europe demand

Piper Sandler's Craig Johnson likes Cheniere Energy, which recently broke out of a very big base. Cheniere exports massive quantities of U.S. natural gas to Europe and Asia.

One LNG tanker powers 100,000 homes

Just one tanker of LNG can produce a year's worth of power for over one hundred thousand average-sized European homes. Europe is stopping Russian LNG purchases next year.

“just one tanker of LNG can produce a year's worth of power for over 100,000 average-sized European homes”