Marketplace All-in-One The little-known regulatory bodies that can make or break AI data centers
Dec 11, 2025
Scott Brennan, Director at NYU's Center on Technology Policy and author of a vital report, explores the emerging role of public utilities commissions (PUCs) in AI data centers. He reveals how these often-overlooked regulators are pivotal in deciding the feasibility and rates for data center infrastructure. Discussing the public’s growing concerns over environmental impacts and strain on energy grids, Brennan highlights the balancing act between advancing AI technology and the associated costs. His insights shed light on a crucial intersection of regulation and innovation.
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PUCs Can Make Or Break Data Centers
- Public utilities commissions (PUCs) control planning, permitting, and rate decisions that directly affect data center development.
- PUC approvals can determine whether massive data centers can connect to the grid and exist at all.
Rates Shape Who Bears Grid Costs
- Utilities can embed provisions in rates to recover infrastructure costs from data centers.
- Those provisions include direct payments and mandatory contract lengths to ensure cost recovery.
Permitting Equals Gatekeeping
- In some states PUCs must approve major upgrades to connect data centers, giving them de facto control over expansion.
- Connecting a new data center can require upgrades comparable to building a new city, triggering PUC oversight.