Getting power used to be easy.
Jason Carolan, chief innovation officer at U.S. data center developer Flexential, remembers that just a couple of years ago, his company could get access to electricity almost anywhere in the country within a year. “It wasn’t a big deal,” he told Latitude Media.
Now, though, things have changed. “We are selling our facilities two or three years in advance, because the demand is so high,” Carolan said. “And we’re asking our power partners to give us their roadmaps, which need to be five to seven years out.”
The competition is stiff, so Flexential is often in talks with multiple power providers at the same time, in an attempt to gauge which load request will pan out first.
The habit — logical from an individual company’s perspective — has become almost the industry standard for large load customers such as data centers. And at scale, it’s become a problem. As companies race to secure their place in the booming data center market, they’re flooding power providers with speculative, or “phantom,” load requests — many of which will never materialize.
As a result, utilities and grid operators are drowning in requests, and load queues are piling up so fast that they distort load growth forecasts and sow confusion throughout the industry.
“Everyone is struggling to isolate signal from noise,” said Peter Freed, Meta’s former director of energy strategy, adding that it’s not only the utilities that are inundated, but the tech companies themselves. “Tech companies are getting the same project bid into them multiple times, and it takes them a while to figure that out… to the point that their energy teams — which are some of the most creative forces in the market today — are so busy trying to isolate good quality opportunities from junk that they don’t have the space to do creative thinking.”
(Freed is also the founder of climate and energy consultancy group New Horizon, and recently published an op-ed in Utility Dive on how to reduce large load speculation.)
Unlike generation interconnection requests, load requests are not subject to standardized transparency requirements. And that means that the extent of the problem is hard to nail down — though industry insiders guess that some players are initiating dozens of requests at once.
Quantifying the problem
Brian Fitzsimons is the CEO of GridUnity, a company that provides interconnection lifecycle management software that power providers use to process these load connection requests and reduce load queues. One of his customers is one of the largest utilities in the U.S., and had nearly 30% of all applications submitted in 2024 canceled, Fitzsimons told Latitude Media.
Interconnection.fyi, a database that tracks interconnection queues, shows that 162 out of 521 public requests were withdrawn since 1996. The data, however, covers only the parts of the U.S. for which there’s public data available, like New York ISO and Chelan County Public Utility District; and even for those places it shows an incomplete picture, as many withdrawn or operational large load projects have been unpublished and don’t appear in public datasets anymore.
Everyone is struggling to isolate signal from noise…Tech companies are getting the same project bid into them multiple times, and it takes them a while to figure that out.
These “phantom” projects — or “vaporwatts,” as they’ve been dubbed by Tim Hughes, chief development officer at Stack Infrastructure in a Linkedin post — take up utilities’ resources and time, creating delays for all projects seeking connection, and inflating the country’s load growth predictions.
And, according to Long Lam, an associate at The Brattle Group, where he specializes in resource planning and electricity markets, the consequences of an extended lod queue could end up reverberating all the way down to household bills.
“You can imagine a case where a utility plans to expand its system based on a rosy outlook, and that outlook may not reflect the true intention of these large customers,” he said. “If the utility builds out its power system, upgrades its transmission network, and consequently incurs large costs to serve these potential customers, and these customers do not materialize, then somebody else is going to have to pay for those costs unless applicable tariff provisions are in place.”
The solution, according to both Fitzsimons and Freed, boils down to two critical factors: transparency and standardization.
Transparency
Before getting in any queue, people generally scan it to evaluate the wait and the potential reward: Does it make sense to stand in line for hours in front of a museum, or will the exhibit I want to see be closed by the time I get to the entrance? The same logic could apply to the load connection queue — but today the process is opaque.
Sharing details like which projects are in the queue, who owns them, where they’re located, and how large they are “will help the legitimate end users of the proposed projects evaluate developer credibility and project viability,” Freed wrote in his op-ed, which he co-authored with former FERC commissioner Allison Clements.
But often that information is not made public in part because of privacy concerns, Fitzsimons said. “Because it’s very competitive, a lot of people don’t want to say who [the projects] truly belong to, but there’s got to be a way to anonymize a project, while having transparency about the important data associated with [it],” he added.
Utilities and power providers could pair queue transparency with public tools to help developers assess their likelihood of getting a project done.
“Developers across the country lack the tools to identify optimal locations that have sufficient grid capacity to support their projects,” he said. “It would be ideal to provide public load hosting capacity maps, which developers can use to decide which locations are best.” These maps could be paired with a pre-application system with a “high-level cost estimation tool” providing quick feedback about the system’s capacity and timeline to serve a load, he added.
Meanwhile, regulations could require load customers to disclose all the connection requests they’ve been pursuing. Texas Senate Bill 6, for instance, which was introduced in the state senate in February, would require large-load customers to disclose whether they’ve been “queue shopping,” among other things.
Standardization of load queues
These potential transparency improvements are part of the wider push for standardization. Utilities and power providers are well aware of the issue, and are already looking for ways to improve the load connection process. But according to Freed, in most regions the process remains antiquated, and is more like “a million things getting thrown at people all the time.” And Fitzsimons has seen the same thing.
“Many transmission owners have been handling these processes using spreadsheets and project binders — I’m not kidding, you would be shocked,” Fitzsimons said. “That’s because in the U.S., we haven’t seen load growth in more than 30 years, and people were able to manage it using spreadsheets in a database. Now that the volume and complexity of requests have skyrocketed, you can’t do that anymore.”
There are two key pieces of standardization. The first, a regular and repeatable process for entering and exiting the queue, would eliminate potential bias.
But another key avenue for preventing opportunists — what industry insiders colorfully describe as “Joe’s garage” or “two people and a dog in a pickup truck” — from clogging the load queue are commercial and financial readiness screenings. A financial readiness “test” would include fees, commensurate to the project’s size, that are charged as the load requests advances to “get people to put chips on the table,” Fitzsimons said. Meanwhile, commercial readiness screening would evaluate the demonstrated ability of the customer to build a data center.
With its software, GridUnity is trying to implement these measures across the country, at least as far as fragmented regulations will allow. And Fitzsimons says he’s confident that it will be able to drive standardization across North America over the next three years.
But smoothing out the connection process will also come down to individual large load customers adopting their own measures. Flexential, for example, has started paying for substations upfront, Carolan said. This way “the power company gets their capital before they have to deploy,” he said. “I think it will be a common practice. I think it’s going to be asked more and more of the data centers.”
