Humberto Sanchez, Pluribus News//March 9, 2026//
Electricity demand spurs states to find a way to meet the moment
In this Feb. 14, 2017, file photo, a rooftop is covered with solar panels at the Brooklyn Navy Yard in New York. The Manhattan skyline is at top. (AP Photo/Mark Lennihan, File)
Humberto Sanchez, Pluribus News//March 9, 2026//
EDITOR’S NOTE: This story is part of a special State Affairs series highlighting energy policy dominating state legislative action this year. See the full list of stories here.
Key Points:
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States are seeking to meet surging electricity demand driven by data centers
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Policy solutions include boosting solar projects and streamlining energy project permitting
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States are also considering nuclear power as a long-term solution
States are casting a wide net in their efforts to meet a surging electricity demand being driven by the burgeoning data center infrastructure necessary for artificial intelligence.
The raft of policy solutions include measures to boost residential and larger solar projects; streamline the permitting process and reduce barriers to building energy projects; implement grid-enhancing technologies; establish virtual power plants; and incentivize nuclear and geothermal projects.
The goal is to tap into what is shaping up as a modern-day Industrial Revolution, in which data centers power artificial intelligence applications that leaders say could one day overhaul the economy.
Interior Secretary Doug Burgum, the former governor of North Dakota, said data centers were so important that they were equivalent to factories that produce knowledge.
“Every governor is going to want to be able to manufacture intelligence in their state, whether it’s to cure cancer, have top-notch research, have every school child have their own tutor,” Burgum said at the National Governors Association winter meeting in Washington, D.C. “It’s going to transform every job, every company in every industry. It absolutely is, and it’s coming at a rate that’s even faster than the PC revolution.”
Virginia-based consulting and technology services company ICF projects that U.S. electricity demand will increase by 25% from 2023 to 2030 and by 78% by 2050, primarily due to the development of data centers.
Data centers are large buildings that house computing and networking equipment. The networking systems support functions such as cloud computing, video streaming and artificial intelligence applications that are particularly energy-intensive. On average, a ChatGPT query consumes nearly 10 times as much electricity as a Google search, according to an analysis by Goldman Sachs.
States are considering several ways to help meet that demand.
At least eight states are pursuing policies to ramp up solar power because it is among the cheapest and fastest forms of electricity generation currently available.
“Since 2018, solar has consistently posted some of the shortest lead times for utility-scale projects, averaging 14–24 months across most US regions,” according to a report commissioned by the Business Council for Sustainable Energy, a coalition of the energy efficiency, natural gas and renewable energy industries.
In New York, Democratic Sen. Pete Harckham has introduced a dozen bills this session to advance solar generation.
“Solar energy is one of the most affordable energy sources available,” Harckham, chairman of the Senate Environmental Conservation Committee, said in a statement last month. “By streamlining the permitting and interconnection process, and strengthening programs that support solar installations, we can reduce project costs and deliver real savings to families, businesses, schools, and municipalities. That means more predictable energy bills and less exposure to volatile fossil fuel prices.”
One measure Harckham introduced would double the state’s distributed solar target to 20 gigawatts by 2035, implement reforms to expedite project deployment, and speed the interconnection process.
His other bills would increase the state’s residential solar tax credits for new installations; require localities with populations over 5,000 to adopt a residential automated solar permitting platform; and allow solar to be built over parking lots on state park land.
States are also looking to expedite the permitting process and remove hurdles to getting energy projects online more quickly.
A bill in Virginia would supersede local regulations and zoning that ban or limit ground-mounted solar projects. A measure in Oregon would expedite renewable energy projects that qualify for federal wind and solar tax credits, which are being phased out under the One Big Beautiful Bill Act.
The credits expire for projects that do not begin construction by July 4, 2026, or are not placed in service by Dec. 31, 2027.
The Oregon bill comes after Democratic Gov. Tina Kotek signed an executive order in October “to accelerate the pace of renewable wind and solar project development in the state of Oregon before the clock runs out on critical federal clean energy tax credits,” according to a release.
In New Jersey, lawmakers introduced legislation to establish the Office of Energy Generation Ombudsman within the Department of the Treasury to support energy producers. It includes provisions to streamline permitting and resolve disputes related to energy generation projects, with a focus on increasing electricity production statewide.
Similar measures to organize and coordinate the energy permitting process have been introduced in Maine and West Virginia.
Legislators in at least seven states have introduced legislation for so-called grid-enhancing technologies, a group of hardware or software tools that can be installed on an existing transmission line to increase efficiency and capacity.
Legislation introduced in Iowa would require public utilities and transmission companies to conduct and submit studies on the feasibility of implementing grid-enhancing technologies, including upgrading transmission wires to allow more electricity to flow, also known as reconductoring.
States are also looking at nuclear power as a longer-term solution. At least a dozen nuclear-related measures have been introduced this year, and at least one has been signed into law.
Those include bills introduced in Arizona and Colorado. In Indiana, legislation signed by Republican Gov. Mike Braun in February would streamline the nuclear permitting process by removing state-level oversight that supporters argue is redundant and duplicates federal regulations.
State environmental groups, including the Hoosier Environmental Council, opposed the bill, raising concerns that it would reduce safety regulations.
Indiana has been active in recent years seeking to put in place policies to help ramp up nuclear power to meet the emerging demand.
Last year, the state enacted incentives for the use of small modular reactors. It provides a 20% tax credit for costs related to developing small modular reactors, which are a type of advanced nuclear reactor with a significantly smaller footprint, lower costs and about one-third the generating capacity of traditional nuclear reactors.
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