U.S. States Poised to Fuel the AI Boom with Reliable, Affordable Electricity
As artificial intelligence (AI) technology surges forward, the unsung hero powering this revolution is – electricity. Specifically, vast and reliable electrical grids capable of sustaining the massive energy demands of data centers, the nerve centers of AI advancement. According to a 2024 U.S. Department of Energy report, data centers already account for more than 4% of America’s electricity use, with projections suggesting a staggering increase to 12% by 2028. In practical terms, that means AI-driven infrastructure could soon demand nearly 20 times the annual power consumption of Chicago.
Rachel Peterson, Meta’s vice president of data centers, underscores the magnitude of this challenge, noting that facilities operate around the clock to support millions of users and require a resilient power supply. Meta’s ambitious efforts to harness 100% renewable energy for its vast data centers highlight a broader industry trend shifting towards sustainability amidst soaring demand.
Why Energy Infrastructure is Critical to the AI Economy
Economic development specialists emphasize that access to cheap, reliable electricity is a decisive factor when companies scout new sites. Tom Stringer from Grassi Advisors points to “deliverability of sites” as a primary bottleneck – with power adequacy topping the list. This is why states with strong grids and progressive energy policies are seeing a surge in major investments.
Recent announcements, such as Meta’s multi-state data center expansion along the nation’s largest interconnected grid and Google’s new Pennsylvania initiatives, signal escalating competition among states eager to position themselves as AI hubs.
Methodology: Evaluating States’ Electrical Competitiveness
CNBC’s annual “America’s Top States for Business” report incorporates energy data assessing two crucial metrics: grid reliability measured by average power outage durations, and electricity retail prices across sectors. Coupled with renewable energy integration rates, these factors paint a comprehensive picture of each state’s readiness to power next-generation technology.
The 10 States Leading the Charge in Powering AI Data Centers
1. Washington
- Largest Utility: Puget Sound Energy
- Average Outages: 2.53 hours/year (2023)
- Price: $10.16 per kWh (2024)
- Renewables: 10.2%, predominantly hydroelectric
While climactic shifts challenge Washington's hydro-reliant grid, its balanced pricing and growing clean energy initiatives maintain its role as a Northwest powerhouse.
2. New Mexico
- Power Outages: 2.82 hours/year
- Price: $9.30/kWh
- Renewable Energy: 59.6%, among the highest nationally
Boasting the nation's seventh-largest wind generation, New Mexico leverages solar and smart grid technologies to modernize its energy landscape and meet rising demand.
3. Montana
- Outages: 1.98 hours/year
- Price: $10.84/kWh
- Renewables: 25.1%
Montana stands at the forefront of a major transmission project that will link the Eastern and Western grids, enhancing resilience and power flow flexibility by 2032.
4. North Dakota
- Outages: 3.48 hours/year
- Price: $8.00/kWh, the nation’s lowest
- Renewables: 34.7%
Thanks to abundant coal, natural gas, and robust wind resources, North Dakota produces substantially more energy than it consumes, maintaining ultra-low costs.
5. Idaho
- Outages: 2.29 hours/year
- Price: $9.52/kWh
- Renewables: 29%, including hydro and geothermal
Home to Meta's 1-million-square-foot solar-powered data center, Idaho’s renewable mix and grid reliability make it a magnet for AI infrastructure investment.
6. South Dakota
- Outages: 1.28 hours/year, among the nation’s most reliable
- Price: $11.00/kWh
- Renewables: 62.5%, primarily wind
South Dakota has surpassed hydropower with wind energy supplying the majority of its electricity, marrying sustainability with supply dependability.
7. Utah
- Outages: 2.12 hours/year
- Price: $9.03/kWh
- Renewables: 32%, with a coal reduction trend
Utah’s unique energy policy aims to balance expanding power supplies while safeguarding affordability and quality of life — a human-centric approach to energy planning.
8. Wyoming
- Outages: 1.99 hours/year
- Price: $9.15/kWh
- Renewables: 24.8%, transitioning from coal dominance
Despite coal-fired power’s historic role, Wyoming is adapting by adding wind, hydroelectric, solar, and natural gas capacities to maintain low costs and supply surplus.
9. Iowa
- Outages: 1.75 hours/year
- Price: $9.43/kWh
- Renewables: 65.6%, the highest wind penetration
Iowa’s rapid transition from coal to wind power illustrates dynamic grid evolution, with solar farms stepping in as nuclear facilities retire.
10. Nebraska
- Outages: 1.21 hours/year, nation’s most reliable
- Price: $9.19/kWh
- Renewables: 33.6%
With a fully publicly-owned electricity system, Nebraska emphasizes reliability and affordability. Recent legislation addresses the impact of energy-intensive cryptocurrency mining on grid stability.
Broader Implications and Challenges Ahead
The rapid electrification of AI data centers poses complex questions beyond capacity and cost. As more states race to attract tech giants, balancing grid sustainability, equitable access, and climate impact remains crucial. Public-private partnerships, regulatory foresight, and innovative technologies such as energy storage and smart grids will be pivotal to meeting future demand.
Moreover, as this surge in demand coincides with extreme weather events and changing climate patterns, resilience initiatives—from hardening infrastructure to diversifying power sources—will increasingly define competitive advantage.
Editor’s Note
The growth of AI and data centers is irreversibly intertwined with the energy landscape of America. While the promise of new technologies excites, understanding the critical role of reliable, affordable, and clean electricity is paramount. These 10 states currently stand at the forefront, but future progress depends on continuous innovation in energy policy and infrastructure. How will states balance economic growth with environmental stewardship and grid stability amid surging electric loads? The answer will shape the next chapter of America’s technological leadership.
