LAS VEGAS (FOX5) — Right now, northern Nevada is considered prime real estate for data center developers. But all those centers need a whole lot of power, and at this point, there aren’t enough transmission lines to go around.
In fact, in 2027, NV Energy will stop providing electricity to the utility serving South Lake Tahoe – and that has some residents and business owners fearing for their future. But could NV energy really pull the plug on all those people in favor of powering data centers? FOX5 Investigates wanted to find out.
Our producers, like many members of the public, learned about the potential issue on social media.
“We have major news right now. Nearly 50,000 people in the Lake Tahoe area are now being told to find a new electricity utility provider because the current one says it has to redirect that power to data centers. Can’t make this up,” says social media journalist Aaron Parnas in a recent post.
Parnas has more than half a million subscribers and even more followers on various platforms. He tells us he started hearing from people shortly after an article appeared in Fortune magazine.
“So I actually was tipped off about this story from residents in the South Tahoe region. They actually emailed me and they kind of told me about it,” he said.
The article describes what could happen in May of 2027 at the end of NV Energy’s contract with Liberty Utilities – the electric provider for the city of South Lake Tahoe.
Nevada Energy tells FOX5 it’s been planning for this transition since 2009, but Parnas says people are still worried.
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“I do think people are freaked out about it. I mean, listen, when has any American been assuaged by an electricity company or utility company saying, oh, it’s going to be okay, don’t worry about it, right?”
But that’s exactly what NV Energy is saying.
In a statement to FOX5, the power company writes: “From the beginning, it has been understood that Liberty Utilities would eventually secure its own transmission access and energy supply so it could serve customers independently.”
Liberty tells us it’s already “forming new partnerships to replace the supplemental power previously provided by NV Energy.”
It assures customers they will not be left without service, but Parnas and his followers remain skeptical.
“Like, whenever a utility company tells you that, it’s cause for concern in a way.”
But NV Energy is resolute, writing: “To be clear, NV Energy is not cutting power. Until liberty obtains its own transmission access, NV Energy will continue to serve liberty as it does today, ensuring reliability for customers throughout the process.”
Michael Brown served as the Executive Director of the Nevada Office of Economic Development under former Governor Steve Sisolak. He’s now a fellow at the Lincey Institute at UNLV.
Brown tells FOX5 that infrastructure simply hasn’t kept pace with the technology, so people’s concerns may be somewhat justified.
“We’re looking at facilities with 400, 500, 600 megawatts of power and above. Nevada doesn’t generate that much power. We don’t have that capacity. We are still transmission-constrained.“
And he says, removing those constraints will take time.
“Because electrical demand has been effectively static until the last few years, with the data centers. And now they’re projecting this rapid growth. And public utilities commissions and utilities, they’re not built for that kind of change.”
NV Energy tells us the upcoming Greenlink lines will have a huge impact on its transmission capabilities. They’ll enable it to serve more residential and business customers while still meeting rising data center needs. FOX5 Investigates did reach out to the city of South Lake Tahoe for its reaction to reports of potential power problems — but we have not yet received any comment.
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