10 U.S. state power grids best positioned for AI data center boom

If there is one thing the U.S. needs to lead the artificial intelligence revolution, it’s electricity. Insane amounts of it.

A 2024 report commissioned by the U.S. Department of Energy found that data centers — the backbone of artificial intelligence — already accounted for more than 4% of U.S. electricity use, and the report said that could grow to 12% by 2028. That would be 580 billion kilowatt hours, or nearly 20 times the annual power consumption of the city of Chicago.

“Data centers run 24/7, and need to be able to support the needs of our users,” said Rachel Peterson, vice president of data centers for Meta. The parent of Facebook, Instagram and WhatsApp has announced a massive push into AI.

“We use a lot of power. We need to make sure we have a robust grid,” she said.

Meta is not alone, say economic development experts.

“The big issues right now are deliverability of sites,” said Tom Stringer, a principal and leader of the site selection and incentives practice at Grassi Advisors in New York. “And maybe the biggest component of that is adequate power.”

The deals keep coming. On Tuesday, Google announced it would spend $25 billion to develop data centers along the nation’s largest multi-state grid, an electricity region covering 13 states in all. Meanwhile. CoreWeave announced a $6 billion AI data center project in Pennsylvania.

CNBC considers each state’s electrical grid in our annual competitiveness study, America’s Top States for Business. Under the study’s methodology, we use U.S. Department of Energy data on grid reliability — the duration of power outages per year — as well as the retail price of electricity.

With a wealth of inexpensive, reliable electricity, these states are the best equipped to power the AI revolution, and everything else.

The power grid in Washington — and across the Pacific Northwest — faces no shortage of challenges. While demand grows, climate change is intensifying the storms that batter the area every year and threatening the consistency of hydroelectric power, an important source for the region. But so far, the state is meeting the demand at a reasonable price.

Largest electric utility: Puget Sound Energy

Power outages statewide: 2.53 hours/year (2023)

Average retail price of electricity (all sectors): 10.16¢/kWh (2024)

Power from renewable sources: 10.2%

New Mexico is the seventh largest generator of wind energy, according to the Energy Department, and it is seeking to increase the use of other alternative sources like solar power to meet relentless demand. The state is also seeking to modernize its grid with tools like smart meters that will help the state better coordinate supply and demand.

Largest electric utility: Public Service Company of New Mexico

Power outages statewide: 2.82 hours/year

Average retail price of electricity (all sectors): 9.30¢/kWh

Power from renewable sources: 59.6%

Montana is home to the Western end of the North Plains Connector, a 420-mile, 525-kilovolt-transmission line that will connect the Eastern and Western U.S. electrical grids for the first time. The $3.2 billion project, funded in part by the Bipartisan Infrastructure Law of 2021, aims to make the grid more resilient and responsive to demand, with the ability to move electricity in either direction between Montana and North Dakota. The project is in the permitting phase, with construction expected to begin in 2028, and electricity expected to begin flowing in 2032.

Largest electric utility: NorthWestern Energy

Power outages statewide: 1.98 hours/year

Average retail price of electricity (all sectors): 10.84¢/kWh

Power from renewable sources: 25.1%

North Dakotans enjoy the cheapest electricity of any state — roughly 30% cheaper than in neighboring Minnesota. One reason, the U.S. Department of Energy says, is that the state has abundant supplies of coal and natural gas, and a small population. That allows the state to produce far more energy than it consumes. But the state also boasts the most abundant wind energy resources in the nation, and it is rich in other renewable sources like biomass. In all, North Dakota generates…