The AI Power Bottleneck: When Transmission Lines Become a Battlefield
Data centers are driving a $50 billion transmission buildout across America, but landowners, local governments, and state regulators are mobilizing to block the lines - creating the first major infrastructure clash of the AI era.
Artificial intelligence’s hunger for electricity has triggered the most aggressive expansion of high-voltage transmission infrastructure in a generation, but organized resistance from property owners and state regulators is threatening to choke off the power supply before a single new data center comes online.
Utility companies are projecting transmission spending will double to nearly $50 billion annually by 2028, up from $25 billion in 2019, according to multiple industry forecasts. Data center electricity consumption climbed from 58 terawatt hours in 2014 to 176 TWh in 2023 and is estimated to reach between 325 to 580 TWh by 2028, according to Lawrence Berkeley National Laboratory. The math is brutal: transmission infrastructure needed to bring renewable capacity to Data Centers can take over a decade to build, while data center construction timelines run one to two years.
The collision is most visible in rural America, where utilities are deploying eminent domain to seize land for transmission corridors. In Maryland, PSEG has floated using eminent domain to take farmland for a transmission line serving data centers; after farmers organized to block land surveyors – and some were accused of threatening surveyors with guns and dogs – the company asked a federal judge to send in U.S. marshals, according to NBC News. The judge declined.
The Maryland Piedmont Reliability Project, a 67-mile transmission line across three counties, has triggered more than a year of escalating conflict, with landowners staking signs declaring “No eminent domain for corporate gain” and local officials from all three counties opposing the project, NBC reported. Lisa Gaver, a seventh-generation farmer, wants no part of what landowners call an “extension cord” for data centers in Northern Virginia 50 miles away.
The $22 Billion Midwest Battle
The largest regulatory fight centers on the Midcontinent Independent System Operator’s Tranche 2.1 portfolio – a $22 billion package of 24 transmission projects, including a 3,631-mile, 765-kilovolt backbone, that five state utility commissions say overstates benefits and unfairly shifts costs, according to Utility Dive.
MISO estimated low-end benefits of $38.3 billion over 20 years, but after a consultant for utility commissions from Arkansas, Louisiana, Mississippi, Montana and North Dakota “corrected” MISO’s assumptions, the benefits were pegged at just $4.3 billion to $7.2 billion – significantly less than the $22 billion cost, the complaint states.
| Assessment | 20-Year Benefits | Cost | Verdict |
|---|---|---|---|
| MISO estimate | $38.3B (low-end) | $22B | Justified |
| State consultant | $4.3B – $7.2B | $22B | Unjustified |
In the Midwest grid territory, utility regulators in North Dakota, Montana, Arkansas, Mississippi and Louisiana are urging federal regulators to block the package; the Indiana-based Midcontinent Independent System Operator told federal regulators the lines are necessary to address growing demand from manufacturing and data centers, according to multiple reports.
The Federal Energy Regulatory Commission will decide the matter, but timing is uncertain. MISO warned that critical reliability and load interconnection processes dependent on Tranche 2.1 would be delayed if the complaint succeeds; MISO’s fast-track review for 26.5 GW relies on the portfolio, according to filings.
Pennsylvania Landowners vs. Big Tech
In Pennsylvania’s Luzerne County, John Zola learned in late 2024 that PPL Electric planned to build a 500-kilovolt line through his 40-acre apple orchard; 240-foot metal towers would reach 10 times as high as century-old apple trees, the Associated Press reported this week.
“They don’t look at whose lives they are destroying, whose property they are destroying.”
– John Zola, Pennsylvania landowner
Pennsylvania’s state consumer advocate is protesting a $1.7 billion proposed line spanning more than 200 miles from West Virginia across half the state, questioning whether cheaper alternatives exist and whether the data center demand will materialize, according to state filings.
In Texas Hill Country, the Hill Country Preservation Coalition has organized against construction of 765-kilovolt lines – the highest voltage used in the United States – that Texas regulators commissioned to cross the state; the coalition is pressing regulators to adopt a different path following existing highway corridors, local reports indicate.
The Property Rights Argument
Eminent domain allows utilities to seize private land for transmission lines that often benefit regional or national energy grids rather than serving local needs; Missouri landowners have raised concerns that these projects primarily benefit corporate interests, with little regard for private property rights or local communities, according to the Missouri Farm Bureau.
Opponents cite three categories of harm: transmission lines are intruding on the sanctity of private land and threatening long-lasting harm to sensitive public lands, farms, property values and pristine waterways – all for electricity that opponents say does not benefit them, multiple sources report.
The World Health Organization classifies extremely low frequency electromagnetic fields as possibly carcinogenic to humans based on limited evidence showing an association with childhood leukemia, but scientific studies have not consistently shown whether exposure to any source of EMF increases cancer risk, according to the EPA. A magnetic field measuring 57.5 milligauss beside a 230-kilovolt transmission line measures just 7.1 milligauss at 100 feet and 1.8 milligauss at 200 feet, the National Institute of Environmental Health Sciences notes.
The Cost Shift Question
Transmission companies are spending billions of dollars building out grids for data centers, costs which filter down to residential customers, NPR reported in January. In February 2025, Dominion proposed its first base-rate increase since 1992, adding about $8.51 per month in 2026 and $2.00 per month in 2027 for a typical household, according to the Belfer Center for Science and International Affairs.
Utilities contend that any new transmission line – even those driven primarily by data centers – benefits everyone by adding capacity to the grid, but transmission projects have always faced challenges and yearslong permitting processes, industry observers note.
Dominion Energy plans to invest $50 billion between 2025-2029 to support data center growth in Virginia, the Institute for Energy Research reported. Virginia’s data centers consumed about 34 million megawatt hours in 2023, 35% higher than Texas and more than three times California’s consumption; approximately 80% of Virginia’s data centers are located in Loudoun County.
Geopolitics Meets Grid Politics
The transmission conflict intersects with national AI strategy. Morgan Stanley Research forecasts U.S. data center demand could reach 74 GW by 2028, with a projected shortfall of about 49 GW in available power access, according to Morgan Stanley. Large technology companies are likely to commit more than $1 trillion of spending in just the 2025-2026 period.
- A 2025 Schneider Electric survey found U.S. data center developers cited power procurement and grid access as the largest bottlenecks – ahead of chips and land
- Meeting AI-related load demands often requires massive transmission upgrades, which can take five to ten years to permit and build
- Voter anxiety about rising electricity costs helped propel gubernatorial victories in New Jersey and Virginia, with affordability shaping this year’s midterms as states compete for AI investment
Speed-to-power has become the central principle driving data center investment in the near term; Virginia, already the world’s largest data center market, is on track for enormous growth over the next five years and could host 20 GW or more of capacity by 2030, despite severely constrained power supply, according to a Center for Strategic and International Studies analysis.
What to Watch
FERC will rule on the MISO Tranche 2.1 complaint in coming months, setting precedent for how transmission costs are allocated when data centers drive demand. FERC is poised to take final action on rules governing large load interconnection this spring, according to the Niskanen Center. The Maryland Piedmont case will test whether federal courts will authorize U.S. marshals to enforce utility access to contested private land.
Permitting reform legislation remains stalled in Congress. This election year may revive conversations around permitting reform on both sides of the aisle, one of the most consequential but long-stalled levers for accelerating transmission buildout. Nine states will elect new public utility commissioners this year, giving voters a choice in who regulates their rates and which investments are worth making.
The immediate question: whether organized local resistance can delay transmission construction long enough to force hyperscalers toward behind-the-meter generation solutions – or whether eminent domain authority will override property rights to meet what the federal government now frames as national security infrastructure.