Hyperscale Data Centers, Regulatory Institutions, And US Growth

In the January 2025 issue of Climate and Energy, NERA Senior Managing Director Jeff D. Makholm, Director Laura T. W. Olive, and Senior Analyst Emily Beiser offer a second installment in their ongoing series addressing critical issues surrounding data centers. This article delves into the outcomes of the 1 November 2024 Federal Energy Regulatory Commission (FERC) Technical Conference on "Co-Located Load" and highlights the significant regulatory and economic challenges in the data center industry.

The authors draw attention to how a split-decision FERC order the same day as the Technical Conference had the effect of erasing $12 billion in common equity value for nuclear plant owners, both active and shuttered, who hopefully anticipate the co-location of hyperscale data centers at their sites. FERC's decision underscores their urgent need to have a broader understanding and economic analysis of geography and investment risks associated with data centers, particularly