Silicon Valley vacation land needs a new energy provider, just as artificial intelligence is driving up prices

It’s no secret that AI data centers have been putting pressure on the network. But Silicon Valley has been relatively insulated from all of that, thanks to rising land and energy prices that have pushed mega projects elsewhere.

However, the tech elite may soon taste a crisis of power. The Bay Area vacation spot, Lake Tahoe, has less than a year to find a new energy supplier.

By May 2027, Liberty Utilities’ agreement with NV Energy will expire. NV Energy’s power will be redirected elsewhere in Nevada, where data centers are thriving.

Both Liberty Utilities and NV Energy said the wind operation had been planned for a long time. NV Energy said the data centers were not responsible. But it’s hard to see how they don’t play a role. NV Energy alone has orders for more than 22 gigawatts of load, which a Bloomberg report indicates is more than 40 times what Lake Tahoe uses at its peak.

If data centers don’t exist, it’s easy to see a world in which Liberty Utilities and NV Energy renew their contract. But with data center customers willing to pay whatever it took for electricity, it was inevitable that traditional customers in Lake Tahoe would be left out in the cold.

The timing couldn’t be worse. Energy markets are tough environments these days, under pressure from rising demand and supply shortages, exacerbated by the Trump administration’s decision to attack Iran.

Lake Tahoe’s conditions are exacerbated by the fact that its power lines share more connections with Nevada’s grid than those in California. This means the community must either find another energy provider from within NV Energy’s territory or from elsewhere in the West.

Given that NV Energy has already prioritized data centers over the mountain town, Lake Tahoe residents — and second home owners — will likely have to look to another regional energy producer.

This won’t be easy either. In one state, in Utah, the County Commission recently approved the development of a 40,000-acre data center that could consume up to 9 gigawatts of electricity when completed. Today, the entire state of Utah uses about 4 gigawatts. Demand on this scale will almost certainly drive prices up across the region.

The confluence of these factors means Lake Tahoe will likely pay more for electricity next year than it does today. Local residents will be hardest hit, but people who own second homes in the area, many of them from Silicon Valley, may feel the pinch as well.

The injustice of the AI ​​energy crisis is that the people who suffer the most have had little say in the technology or its rollout. Lake Tahoe’s energy dilemma shows that that is starting to change, although perhaps not enough to make a difference.