October 8, 2026 - Rapid growth in artificial intelligence and other digital services is pushing utilities to consider a different way to manage electricity demand: asking data centers to adjust their power use when the grid is under the greatest strain.

The approach, known as demand response, allows facilities to temporarily reduce consumption or move certain computing tasks to less demanding hours. Reuters reports that these arrangements remain largely limited to pilot projects and individual agreements. reuters.com

The potential benefits are substantial. Duke University researchers estimate that greater data-center flexibility could save the electricity system between $40 billion and $150 billion over the next decade through avoided construction, operating and fuel costs. Those figures represent modeled outcomes rather than guaranteed savings. American Public Power Association

The Electric Power Research Institute projects that data centers could account for 9% to 17% of U.S. electricity consumption by 2030, compared with approximately 4% to 5% today. Its analysis identifies access to power as an increasingly important factor in where new facilities are developed. esca.epri.com

For the coal industry, the connection is grid planning. Where coal-fired plants remain part of the generating fleet, reducing sharp demand peaks could help utilities manage available capacity more effectively. However, flexibility alone does not establish whether an individual coal plant should remain operating; that depends on local demand, available generation and reliability requirements.

Expanding these programs will require data centers to protect customer services while adjusting electricity use. Utilities will also need pricing arrangements and connection procedures that reward dependable participation.