Tens of Thousands of Lake Tahoe Residents Stand To Lose Electrical Service as Nearby Data Center Syphons Energy

As AI becomes more and more popular around the world, many municipalities are losing their open spaces to the massive data centers needed to run the systems.

And while there has been countless information shared about just how bad these data centers are for our environment, thanks to the amount of natural resources they use, and the way the large (often multiple-acre) campuses displace local wildlife and lead to deforestation, the people who live in these neighborhoods suffer, too.

Take for example tens of thousands of people who call Lake Tahoe home. They say that they were informed that local data centers now require so much electricity that their utility provider will no longer be able to keep them on the grid. Instead, they will have to find a new way to access the power lines.

This news not only leaves almost 50,000 people in the dark, but it could raise the price of the utility for them and the rest of the people who call Nevada home. Here's what we know so far.

An estimated 49,000 Lake Tahoe residents are going to lose access to NV Energy. Fortune magazine says that the cutoff will come sometime in the middle of 2027. This will impact Liberty Utilities, the local energy company that carries electricity to the region.

That's because NV Energy needs to divert more power to the region's data centers. Further complicating the situation is the fact that the California customers receive their energy from NV Energy, but pay California electric rates.

However, the region uses NV Energy's power lines for transmission. As such, there's no one regulator running the show here, which means the Lake Tahoe residents don't have a specific place to turn to get help.

And Fortune says it's not exactly like it's easy for Liberty Utilities to establish its own transmission lines in the region to bring electricity from the state of California in because it would require hundreds of millions of dollars and have negative impacts on the land.

While unique, the problem facing Lake Tahoe residents isn't exactly a new one. Nevada has quickly become a hub for data centers in the U.S., and in 2024, Fortune says that its resource plan stated that 75 percent of the state's projected energy growth would come from data centers.

As of that same year, data centers accounted for 22 percent of the state's total energy usage. However, NV Energy says that its decision to strip Liberty Utilities' access to transmission lines wasn't a new one.

While the increase in data centers in the area certainly gave them reason to, a spokesperson for the Nevada-based company said that there had been a planned transition away from the utility provider for many years.

Although that information probably provides little comfort for Lake Tahoe residents who are literally watching the clock run out on their access to reliable electricity, and while there are some other promising alternatives on the horizon, there is no concrete plan in place.