Silicon Valley’s vacationland needs a new energy provider just as AI is driving prices up

Silicon Valley’s vacationland needs a new energy provider just as AI is driving prices up Tim De Chant 11:14 AM PDT · May 15, 2026 It’s no secret that AI data centers have been straining the grid. But Silicon Valley has been relatively insulated from it all, thanks to high land and power prices that have pushed hyperscaler projects elsewhere.  The tech elite might soon get a taste of the power crunch, though. The Bay Area’s vacationland, Lake Tahoe, has less than a year to find a new energy supplier. By May 2027, Liberty Utilities’ agreement with NV Energy will come to an end. NV Energy’s power will be redirected elsewhere in Nevada, where data centers have been booming. Both Liberty Utilities and NV Energy have said the wind down has been long planned; and NV Energy said data centers aren’t to blame. But it’s hard to see how they don’t play a role. NV Energy alone has requests for more than 22 gigawatts of load, which as a Bloomberg report points out, is more than 40 times what Lake Tahoe uses at its peak.  If data centers weren’t in play, it’s easy to see a world in which Liberty Utilities and NV Energy renew their contract. But with data center customers willing to pay whatever it takes to get electricity, it was inevitable that traditional customers in Lake Tahoe would be left out in the cold. The timing couldn’t be worse. Energy markets are harsh environments these days, squeezed by surging demand and tightened supplies made worse by the Trump administration’s decision to attack Iran. Lake Tahoe’s circumstances are compounded by the fact that its power lines share more connections with Nevada’s grid than California’s. That means the community must either find another power provider from within NV Energy’s territory or elsewhere in the West.  Given that NV Energy has already prioritized data centers over the mountain town, it’s likely that Lake Tahoe residents — and second-home owners — will have to find for another regional power producer. That won’t be easy, either. One state over, in Utah, a county commission recently approved a 40,000-acre data center development that could consume up to 9 gigawatts of electricity when completed. Today, the entire state of Utah uses about 4 gigawatts. Demand at that scale is almost certain to drive prices up throughout the region. The confluence of those factors means that Lake Tahoe will likely pay more for electricity next year than it does today. Locals will get hit the hardest, but people who own second homes in the area, many of whom are from Silicon Valley, might feel the pinch, too.  The injustice of the AI energy crunch is that the people who suffer the most have had very little say in the technology or its rollout. Lake Tahoe’s power predicament shows that’s starting to change, though probably not enough to make a difference. When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence. Tim De Chant Senior Reporter, Climate Tim De Chant is a senior climate reporter at TechCrunch. He has written for a wide range of publications, including Wired magazine, the Chicago Tribune, Ars Technica, The Wire China, and NOVA Next, where he was founding editor. De Chant is also a lecturer in MIT’s Graduate Program in Science Writing, and he was awarded a Knight Science Journalism Fellowship at MIT in 2018, during which time he studied climate technologies and explored new business models for journalism. He received his PhD in environmental science, policy, and management from the University of California, Berkeley, and his BA degree in environmental studies, English, and biology from St. Olaf College. You can contact or verify outreach from Tim by emailing tim.dechant@techcrunch.com. May 27 Athens, Greece StrictlyVC Athens is up next. Hear unfiltered insights straight from Europe’s tech leaders and connect with the people shaping what’s ahead. Lock in your spot before it’s gone. Most Popular How to turn off Instagram’s new Instants feature and retract photos you accidentally shared Aisha Malik Musk’s xAI is running nearly 50 gas turbines unchecked at its Mississippi data center Tim De Chant Spotify launches a Wrapped-style recap of your entire listening history Ivan Mehta AI voice startup Vapi hits $500M valuation after winning Amazon Ring over 40 rivals Jagmeet Singh Amazon launches 30-minute delivery across the US Sarah Perez So you’ve heard these AI terms and nodded along; let’s fix that Natasha Lomas Romain Dillet Kyle Wiggers Lucas Ropek Fintech startup Parker files for bankruptcy Anthony Ha X LinkedIn Facebook Instagram youTube Mastodon Threads Bluesky TechCrunchStaffContact UsAdvertiseCrunchboard JobsSite Map Terms of ServicePrivacy PolicyRSS Terms of UseCode of Conduct AnthropicSAPSamsungMarc LoreTechCrunch DisruptTech LayoffsChatGPT © 2026 TechCrunch Media LLC.