U.S.

States Wage Energy War: Offer Tax Breaks to Win Power Plants Against Big Tech

States Wage Energy War: Offer Tax Breaks to Win Power Plants Against Big Tech
energy
legislation
infrastructure
Key Points
  • AI-driven data centers and federal manufacturing incentives have caused a 40% surge in power demand forecasts
  • 14 states now offer tax incentives or regulatory rollbacks to attract $27B in planned energy projects
  • Missouri and Kansas showcase competing strategies with consumer cost implications

The race to power America's digital future has states rewriting playbooks last updated during the 1970s energy crisis. Pennsylvania Governor Josh Shapiro's proposed Energy Reliability Office aims to bypass PJM Interconnection's 3-year approval queue, offering 15-year tax abatements for plants operational by 2028. This mirrors Texas' $10 billion energy fund created after 2021 blackouts, now financing six next-gen facilities.

Industry analysts warn of a speculative gold rushas natural gas projects dominate 83% of proposed developments. While Kansas' 2023 Energy Freedom Act enabled Evergy's 1,410MW gas plants, Missouri consumer advocates blocked similar legislation fearing $18/month rate hikes. Utilities are playing states like poker chips,claims Consumers Council attorney John Coffman.

Three critical insights emerge: First, states repealing construction work in progressbans (like 1976's Missouri law) shift $4B in project risks from shareholders to ratepayers. Second, regional grid operators report interconnection requests doubling since 2022, with 72% targeting data center corridors. Third, DOE projections show renewables lagging at 22% of new capacity despite federal incentives.

The Ohio Clean Energy Reform Act exemplifies market-driven approaches, capping utility ownership at 40% of new generation to spur independent solar farms. Meanwhile, Louisiana's Nuclear Portfolio Standard Credit could revive the 1,200MW River Bend Station by 2029. With FERC forecasting a 157GW national capacity shortfall by 2030, states face mounting pressure to balance reliability against consumer protections.