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TL;DR
A data center announcement is a request for electricity, not a commitment to build. In most American power markets, a developer can join the waiting line to connect a large facility to the grid at little or no cost, without owning the land, financing the project, or signing a customer. The announced figure and the built figure are two different numbers.
The gap between the two is enormous and measurable. ERCOT, the organization that runs the Texas power grid, reported roughly 445 gigawatts of large-load connection applications through 2033 in its April 2026 update. About 9 gigawatts of that has clearance to switch on, and the most electricity these facilities have ever actually drawn at one time is under 4 gigawatts.
The sorting is happening now, and it is being paid for by ordinary electricity customers. PJM’s independent market monitor calculated that planning for forecast data center demand rather than operating data center demand added about $6.2 billion to a single capacity auction. Twenty-three states have now approved rules making large power users pay for the capacity they reserve.
A company announces a new data center campus.
The number attached to it is enormous.
Two gigawatts. Ten billion dollars. A county most readers have never heard of.
A week later, another one. Most of those announcements will never become a building.
That claim comes straight from the public filings.
The organizations that run America’s power grids publish, every month, exactly how much electricity has been requested and exactly how much is flowing.
The two numbers sit about a hundred times apart, and almost nobody outside the sector reads the second one.
Learning to read it separates the buildings that are going up from the ones that exist only on a spreadsheet.
It also explains a fight underway right now in utility hearings across most American states, over who pays for the buildings that never arrive.
Texas has requests for 445 gigawatts and a grid that has never delivered 86
A gigawatt is a unit of electrical power.
One gigawatt is roughly the output of a large nuclear reactor, and it is about enough to supply 800,000 American homes.
In its April 2026 monthly report, ERCOT listed large-load connection applications totalling 445.8 gigawatts through 2033.
Large load is the grid operator’s term for any single facility drawing enough electricity to matter to the system, and in Texas close to 90 percent of these applications are data centers.
Set that against what the Texas grid has ever actually done. Its all-time record, on the hottest afternoon in its history, is about 85.5 gigawatts.
The requests are more than five times everything the state has ever consumed at a single moment, including every home, hospital, refinery, and air conditioner at once.
At the end of 2024 the same queue held 63 gigawatts. It has grown roughly sevenfold in eighteen months.
Nothing about that growth curve describes construction. It describes paperwork.
If you read the 445 gigawatts as a forecast of what Texas is about to build, you have misread a waiting list as a schedule.
Most of the requests have never been studied
Here is the detail that does not travel into the headlines.
Of those applications, ERCOT reported that 321 gigawatts had no studies submitted.
An interconnection study is the engineering work that establishes whether the local grid can physically carry the load and what equipment would have to be added.
It costs money and takes months, and it is the first point at which a project has to prove it is serious.
Roughly seven out of every ten gigawatts in the Texas queue had not reached that first checkpoint.
This is possible because joining the line has historically been close to free. A developer can file requests at five sites in three states while intending to build at one.
Every one of those filings enters a public database, and the database gets reported as demand.
Texas regulators approved a new review process in June 2026 called Batch Zero. Its stated purpose is to sort the serious projects from the speculative and duplicate ones.
ERCOT expected roughly 100 gigawatts of the 450 to survive that sort.
When a headline reports a national or state pipeline figure, it is almost always counting requests at this stage. You are reading a number that no engineer has yet checked.
Nine gigawatts cleared, under four actually drawing power
The other end of the pipeline is published too, and it is much smaller.
As of ERCOT’s March 2026 update, 9,042 megawatts (or 9.0 gigawatts) of large load had received Approval to Energize.
That is the clearance a facility needs before it can legally start pulling electricity from the grid.
Among the projects that hold it, the most ERCOT has ever seen them draw at once is 3,883 megawatts (or 3.9 gigawatts).
Roughly 9 gigawatts cleared. Under 4 gigawatts running. Against 445 gigawatts requested.
That final ratio is about one percent, and the intuitive explanation for it is wrong. The obvious reading is that 441 gigawatts of real projects are stuck in a slow queue.
The filings tell a different story. Most gigawatts were never tied to projects with land, financing, or customers, making the queue more of a list of options than a backlog of buildings.
Read it as a delayed pipeline and you will spend the next three years waiting for capacity that was never coming.
Ohio asked for a deposit and two thirds of the demand walked away
The clearest evidence for that reading comes from a single American utility, and it is the closest thing this sector has to a controlled experiment.
American Electric Power’s Ohio utility supplies electricity to central Ohio, including Columbus.
In March 2023 it stopped accepting new data center connection requests entirely.
It had received more than 30 gigawatts of applications. Demand across its whole Ohio customer base has never risen above about 10.5 gigawatts. The requests were roughly three times everything the utility had ever supplied to everyone.
The freeze lasted 28 months. It ended in July 2025, when Ohio’s utility regulator approved a new billing arrangement for data centers drawing more than 25 megawatts. The terms were straightforward.
Sign a twelve-year contract and pay for at least 85 percent of the capacity you reserved whether or not you use it.
The pipeline then fell from about 30 gigawatts to about 13 gigawatts. In a later progress report to the regulator, the utility put its signed data center contracts at roughly 5.7 gigawatts.
AEP’s own explanation was that the arrangement removed the most speculative and uncertain projects, the ones that had never submitted a load study.
Two-thirds of the demand disappeared the moment somebody attached a price to reserving it.
That story has a contested half, and it belongs here.
The Ohio Manufacturers’ Association represents large industrial electricity customers in the state.
In February 2026 it asked regulators to investigate the utility’s forecasting. Its argument runs in three parts.
The 30-gigawatt figure was never a real planning forecast. The utility has not reduced what it reports to the regional grid operator about future demand.
And Ohio businesses and households may be paying today for demand that may never appear.
Both sides are on the public record. Neither has won yet.
What the episode establishes, regardless of who wins, is the mechanism. A queue that is free to join fills with requests that were never going to be built, and the announced number tells you more about the entry price than about demand.
The buildings that do exist are 99 percent full
At this point, the natural conclusion is that the whole thing is inflated.
The finished buildings say otherwise, and holding both facts at once is the sector's actual state.
CBRE, the commercial property firm that tracks the data center market, reported that vacancy across primary North American markets fell to 1.4 percent at the end of 2025.
That figure came in a year when supply in those markets grew 36 percent to 9,432 megawatts.
In Northern Virginia, the largest data center market on earth, vacancy reached 0.3 percent in the first quarter of 2026.
Preleasing tells the same story. Somewhere in the mid-70 percent range of capacity currently under construction has already been committed to a customer, against a historical norm of 40 to 50 percent.
CBRE’s data center lead has described tenants signing leases for buildings that will not be delivered for three or four years.
So the announcements are mostly fiction, and the finished space is scarcer than it has ever been.
Both hold at once, for the same reason. Real capacity is genuinely hard to produce.
That makes it valuable. And that makes it worth announcing far more of it than anyone can deliver.
If you take the phantom queue as proof that AI demand is fake, you have drawn the wrong conclusion from the right number.
Malaysia signed contracts for 5.9 gigawatts and used 405 megawatts
The same gap opens wherever the data center boom lands, well outside the reach of American grid rules.
Malaysia’s southern state of Johor became Southeast Asia’s fastest-growing data center market, on the strength of cheap land and power next door to Singapore.
As of December 2024, 38 Malaysian data center projects had signed electricity supply contracts with the country’s main utility, Tenaga Nasional Berhad, for 5.9 gigawatts of maximum demand.
Their actual draw at the time was 405 megawatts.
The contracted figure came to about 43 percent of the utility’s total supply. The real draw was about 3 percent.
Malaysian officials have since said publicly that they want data centers to use 85 percent of the demand they declare, which is a polite way of naming the same problem Ohio priced.
Take any country’s pipeline figure as a picture of what has been built, and you will be off by roughly a factor of ten.
Why this could show up on your electricity bill
The sorting has a price, and it lands on ordinary electricity customers.
Power grids have to be planned years ahead. Generators, substations, and high-voltage lines take three to five years to build, so grid operators commit to buying capacity long before the demand shows up.
When the forecast is inflated by requests that will never become buildings, that extra capacity still gets bought. The cost goes into the rates everybody pays.
PJM manages the power grid across 13 states, from Illinois to Virginia, and runs an annual auction to secure capacity.
Its independent market monitor ran the comparison directly.
Planning for forecast data center demand, rather than only the demand from data centers already operating, raised the cost of one auction by about $6.2 billion. That is an increase of 61.4 percent.
That is the price of planning for the announcements.
The response has been fast, and it is happening in public. The Smart Electric Power Alliance counts 77 large-load tariffs pending or in place across 36 states.
The Edison Electric Institute counted 23 states with at least one approved as of May 2026.
These rules all do what Ohio’s did. Sign a long contract. Post collateral. Pay for most of the capacity you reserve whether you use it or not.
Virginia’s version covers customers drawing 25 megawatts or more and takes effect in January 2027.
Every one of those rules was decided in a proceeding that anyone could read, comment on, and attend.
The number that settles the argument
There is a loud public argument about whether the AI buildout is a real industrial expansion or a bubble.
Most of it runs on announcement figures, because those are the numbers that make news.
The filings offer a better instrument. Two numbers, both published monthly and free: how much electricity has been requested and how much is flowing.
The first measures enthusiasm and the price of a place in line. The second measures existing buildings, with machines inside them drawing power.
Watch the second one. If it climbs steadily over the next three years, the buildout was real, and the queue was noise around it. If it stays flat while the requests keep growing, the story was mostly paperwork.
The answer will surface first in a grid operator’s monthly report, and in a utility commission docket in your own state, long before it reaches a headline.
For an argument this big, that is an unusually open place for the evidence to sit.
When you see a data center announced near you, what would you want to know before believing it?
As always, you clear the fog and display what’s really making the noise. Enjoy your work so much.