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July 31, 2026 - Rising electricity demand from AI infrastructure is reshaping competition for generation assets that many companies had previously planned to retire. In West Virginia, American Electric Power has agreed to acquire the 710-megawatt Longview coal plant after outbidding a data centre developer for the facility.
Longview deal reflects scramble for firm power
As first reported by Financial Times, American Electric Power, one of the largest utilities in the U.S., agreed to buy the Longview coal plant after what a person familiar with the matter described as a competitive bidding process. The company narrowly beat a well-known data centre developer, and the transaction value was not disclosed.
The contest for Longview highlights how coal assets are drawing renewed attention as electricity demand rises. Consultancy ICF says U.S. power demand will increase by 39 percent by 2035, while the International Energy Agency says coal's share of U.S. electricity generation, though down sharply from its 2007 peak, has risen 1.5 percent since January 2025.
AEP chief financial officer Trevor Mihalik told the FT the company fought aggressively for control of Longview after losing other bidding contests for non-coal power assets in the region. He said earlier management teams had wanted to shut coal plants, but added that West Virginia remains deeply tied to coal.
The utility also has a permit to build a 1,200MW gas plant at the site, though it is unclear whether or when that project will move forward. AEP says it bought Longview to serve growing demand in PJM, the regional grid covering 13 states and Washington, DC, where it has 18 gigawatts of contracted data centres.
State policy and local concerns shape expansion
Longview is one of the youngest coal plants in the U.S., completed in 2011 at a cost of $2 billion. It was once promoted as one of the country's cleanest and most efficient coal plants, but mechanical problems, cheap shale gas and tighter environmental rules pushed it into bankruptcy in 2013, and it later fell into Chapter 11 again in 2020 with more than $350 million in debt.
The plant's history mirrors the broader decline of coal, even as some utilities such as Xcel and Duke postpone closures and the Trump administration tries to support the sector by delaying plant retirements and backing more than $1 billion in coal and export infrastructure. Recent sales of coal plants have mostly involved distressed assets going to private equity rather than utilities adding new coal generation.
West Virginia lawmakers are also trying to capture more AI-related investment. House Bill 2014 allows data centres to build their own power grids and limits the ability of local governments to reject projects on zoning, noise and environmental grounds, while Google recently bought land in Putnam County for a multibillion-dollar data centre development.
The competing bidder for Longview had considered removing the plant from the grid to power its AI facility directly, a move that would have cut supply equivalent to about 355,000 homes and likely triggered opposition from PJM and consumer advocates. Governor Patrick Morrisey has pledged to triple West Virginia's generation capacity to 50GW by 2050, but some residents and lawmakers remain cautious about the effects of large projects on power prices and water resources.
Our earlier article on Big Tech’s AI investment surge outlined how Google, Amazon, Microsoft and Meta have poured more than $1tn into data centres, advanced chips and the power infrastructure needed to run them. We noted that while cloud and advertising growth has started to benefit, free cash flow has come under heavy pressure as the build-out accelerates and long-term commitments keep rising.
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