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 data centers in the state still plan to connect to the existing electric grid. This is due to the reliability and lower cost of grid power, as well as ongoing state efforts to protect ratepayers from shouldering infrastructure costs. The law was also intended to support the state's oil and gas industry.
Oklahoma has implemented a law, Senate Bill 480, allowing large energy consumers like data centers to build their own "behind-the-meter" power plants, bypassing traditional utilities. This legislation, co-authored by Rep. Brad Boles, R-Marlow, aimed to clarify state law, attract private investment, and ease strain on the electric grid, which is experiencing demand expected to outpace supply in the Southwest Power Pool’s territory. Despite this, most data center projects announced or planned for Oklahoma, including major players like Google and IREN, are opting to connect to the existing utility grid.
Experts like Joshua Rhodes from the University of Texas at Austin suggest that data center companies generally prefer not to be in the power business due to the high costs and lengthy timelines associated with building private power generation. Utilities like Oklahoma Gas & Electric (OG&E), represented by Chief Communications Officer Christi Woodworth, confirm that developers are largely interested in grid connections, citing Oklahoma's relatively low electricity costs and grid reliability. Google, for instance, has partnered with OG&E to power its three data centers in Muskogee and Stillwater, including building two solar farms to add to the grid.
The state is also working to protect household ratepayers. Governor Kevin Stitt and Oklahoma electric utilities signed a federal pledge to ensure data center developers pay their own way. Additionally, state regulators are reviewing large-load tariffs from utilities designed to prevent residential customers from subsidizing grid connection costs for large companies. The behind-the-meter law specifically requires natural gas as part of the data center power plants, reflecting Oklahoma's support for its oil and gas industry, though other sources like solar and wind can be used in conjunction.