Some data centers are building their own power plants. In Oklahoma, most want to plug into the grid
Oklahoma passed a law allowing data centers to build their own power plants, but most proposed projects in the state are opting to connect to the existing grid. Governor Kevin Stitt and utilities signed a pledge requiring data center developers to cover their own electricity costs and invest in infrastructure. State regulators are reviewing new tariffs for large energy consumers to prevent households from bearing grid connection costs.
Oklahoma passed Senate Bill 480 last year, which permits energy-intensive facilities, including data centers, to construct their own behind-the-meter power generation. The law, co-authored by Rep. Brad Boles, aimed to provide clarity and attract private investment while potentially easing pressure on the state's electric grid, which is part of the Southwest Power Pool territory.
Despite the new law, most data center projects announced or planned for Oklahoma are choosing to connect to the existing utility grid. Experts suggest this is due to the grid's reliability and the high costs and lengthy timelines associated with building private power plants. This trend aligns with the Ratepayer Protection Pledge signed by Gov. Kevin Stitt and Oklahoma electric utilities, which directs data center developers to either purchase substantial electricity, add power to the grid, or supply it on-site.
Examples of this include Google's three data centers in Muskogee and Stillwater, which have a deal with Oklahoma Gas & Electric and are building solar farms to add generation. Similarly, IREN's proposed Kiowa Data Center, the state's largest, plans to secure power through Public Service Company of Oklahoma. While the Chickasha Airport Industrial Park was mentioned as a potential site for a data center and power plant, and a manufacturing firm in Tulsa Port of Catoosa plans on-site power, most other large proposed data centers, such as the Luther Horizon Technology Park and Project Mustang in Claremore, intend to use local utilities. The law mandates natural gas as a component for behind-the-meter plants, a provision included to support Oklahoma's oil and gas industry.
According to Cleanview, fewer than 30 data centers are planned for Oklahoma as of early August, a contrast to hundreds in Texas. The state anticipates increased interest in behind-the-meter projects in the coming years as developers confront infrastructure delays and seek options to expedite buildouts, with some even considering unconventional power sources like used cruise ship or helicopter engines to bypass long lead times for new natural gas plants.