Amazon Accuses Berkshire's Utility Arm Of Starving Data Centers Of Power, Sparks Fresh Grid Worries

• U.S. data centers will require 22% more grid power by the end of 2025 than they did one year earlier, as per an S&P Global report.
• Amazon reportedly stated that PacifiCorp provided insufficient power for one data campus, no power for a second campus, and made no significant progress toward supplying power to the other two.
• Last month, PJM Interconnection, which manages North America’s largest power grid, urged the Federal Energy Regulatory Commission to review Exelon’s power supply agreement with Amazon.

Amazon reportedly filed a complaint last week against Berkshire Hathaway-owned PacifiCorp for failing to provide sufficient electricity to its four new data centers.

According to a Bloomberg news report citing a complaint to the Public Utility Commission of Oregon, the Portland, Oregon-based utility breached obligations dating back to 2021 to provide sufficient power for the projects.

Amazon reportedly stated that PacifiCorp provided insufficient power for one data campus, no power for a second campus, and “has refused to even complete its own standard contracting process for the third and fourth Data Center Campuses.”

Retail sentiment on Stocktwits about Berkshire Class B shares was in the ‘neutral’ territory at the time of writing.

Berkshire's utility businesses posted a 9% decline in operating earnings in the third quarter amid wildfire-related costs and higher spending on natural gas pipelines.

Utilities Struggle To Keep Up With Booming Demand

Amazon’s complaint raised fresh concerns about the U.S. utilities' ability to quickly ramp up infrastructure to keep pace with the rapid rise of data centers used to facilitate cloud computing, streaming services, and a wide range of AI applications. U.S. data centers will require 22% more grid power by the end of 2025 than they did one year earlier, and will need nearly three times as much in 2030, according to a report by the S&P Global.

The data centers are also attracting regulatory scrutiny over their potential impact on customer bills. Last month, PJM Interconnection, which manages North America’s largest power grid, urged the Federal Energy Regulatory Commission to review Exelon’s power supply agreement with Amazon.

What Routes Are The Tech Giants Taking To Ensure Power Supply?

To ensure a stable power supply all day for their giant data center complexes, increasingly reducing reliance on traditional grid connections by pursuing a mix of on-site generation, private microgrids, direct power purchase agreements with renewable producers, as well as emerging tech solutions such as small modular nuclear reactors and fuel cells.

Last month, utility firm NextEra and Google announced they had signed an agreement to restart the Duane Arnold nuclear power plant in Iowa to power the tech giant’s cloud infrastructure. Last year, Microsoft struck a deal with Constellation Energy to restart the Three Mile Island nuclear power plant in Pennsylvania. At the same time, fuel cell maker Bloom Energy is powering Oracle’s data centers.

Also See: Goldman Sachs CEO Predicts M&A Boom On 'Tremendous Backlog' As Regulatory Tide Turns: 'CEOs Are Unleashed'

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