SAN FRANCISCO, Jan 15, 2026, 08:32 PST
- Google says U.S. transmission delays are now its top obstacle to powering up new data centers
- A senior executive says some utilities are quoting more than a decade for interconnection studies
- The company is looking at “co-location” sites next to power plants to cut time off the queue
Google says the U.S. transmission system has become the biggest hurdle to bringing new data centers online, as grid connection waits stretch beyond a decade in some parts of the country. “Transmission barriers are the number one challenge we’re seeing on the grid,” Marsden Hanna, Google’s global head of sustainability and climate policy, said, adding one utility quoted “12 years to study the interconnection timeline.” Google is exploring “co-location” — placing some data centers next to power plants — to bypass parts of the queue, he said. (Reuters)
The timing is awkward for the industry. U.S. power consumption is expected to push past record highs in 2026 and 2027 as data centers tied to artificial intelligence and cryptocurrency add to demand, the Energy Information Administration said this week. The agency forecast total power demand rising to 4,256 billion kilowatt-hours in 2026 from a record 4,198 billion kWh in 2025. (Reuters)
That leaves Google and its peers chasing electricity in a system built for slower growth. New transmission lines take years to permit and build, and the grid is already crowded in places where data centers cluster. The result is a race between chip racks and pylons, and pylons are losing.
Hanna said the fix is not one thing. He pointed to permitting delays for new transmission and to technology that can squeeze more power through existing lines, alongside other steps. Even then, he said Google generally prefers to connect to the broader grid, not operate as an island.
Co-location is the workaround now under discussion. In plain terms, it means siting a large electricity user beside a generator so it can draw power directly, sometimes reducing the need for new transmission upgrades. It can cut wait time, but it also raises a rough question: who pays, and who gets bumped.
Regulators are already moving toward rules, at least in the mid-Atlantic PJM Interconnection region, where the U.S. energy regulator told PJM to set standards for large loads located next to power plants. FERC Chair Laura Swett called the order a “monumental step” for the AI era, while PJM said it was reviewing the decision. (Reuters)
Other Big Tech players are also trying to get ahead of public pushback over the costs of powering data centers. Microsoft on Tuesday rolled out an initiative that it said would curb water use at its U.S. data centers and limit the hit to the public from any surge in power prices, saying it will pay utility rates high enough to cover its own power costs. Microsoft Vice Chair and President Brad Smith called it “unfair and politically unrealistic” for the industry to ask the public to shoulder added electricity costs for AI. (Reuters)
In Louisiana, Earthjustice asked state utility regulators to investigate financing tied to Meta’s planned $27 billion data center project, arguing households and businesses could be left paying for infrastructure if Meta exits early. “If Meta ends the lease after four years,” Earthjustice attorney Susan Stevens Miller said, “almost none of the costs” would have been paid by the company by then. Meta and Blue Owl were not immediately available for comment, Reuters reported. (Reuters)
For Google, the near-term issue is speed. Data centers used to train and run AI systems draw heavy, steady power, and delays in the grid queue can slow when a company can add computing capacity — not a small problem when rivals are building quickly.
But the co-location path carries risk. It is politically sensitive in regions already worried about reliability and power bills, and new rules could limit how easily large customers bypass the shared grid or how the costs get spread. If regulators clamp down or utilities resist, Google could find itself back in the same line, just with a new kind of fight.
