Wyoming is caught between a tech boom and regulatory gridlock. State officials lack a clear legal framework for companies that want to build their own power plants to feed massive AI data centers, leaving billion-dollar projects in limbo while traditional utilities resist competition.

Why Are Data Centers Demanding So Much Power?

AI data centers consume staggering amounts of electricity. One subsidiary of the Anschutz Corporation, for example, has proposed building 3,200 megawatts of natural gas-powered generation and 1,000 megawatts of solar capacity, which would equal 33 percent of Wyoming's total generating capacity, all to power just one or two data centers in southern Wyoming. To put that in perspective, one megawatt supplies electricity to roughly 750 homes.

The problem is speed. Traditional utilities like Rocky Mountain Power, according to industry complaints, move slowly when it comes to connecting large new customers. The trona mining and soda ash industry, which also demands massive power supplies, has reported waits of up to seven years for utility upgrades. "Seven years is a de facto no," said Jody Levin, an industry spokeswoman, when describing the timeline utilities offered for power expansion.

What's the Proposed Solution, and Why Is It Controversial?

Developers propose building standalone power plants that serve only data center customers, keeping them separate from the regular utility grid. This approach would protect residential and small business customers from rate increases while allowing data centers to get power quickly. The idea sounds practical, but it challenges the traditional utility business model, where regulated monopolies serve all customers in their territory and use smaller customers' steady demand to keep rates affordable.

Utilities argue that third-party power generators will eventually need backup from the main grid if something goes wrong, creating hidden costs and reliability risks. They also warn that losing large industrial customers to private power deals could destabilize their ability to serve everyone else affordably.

The Wyoming Public Service Commission recently rejected Anschutz's request to declare its direct power-to-customer project exempt from utility regulation. Commission Chairman Mike Robinson noted that the company had no facilities, no generation, and no customers yet, making the request premature. However, Deputy Chairman Chris Petrie disagreed, arguing that the delay was unreasonable given the substantial investment already made and the intense public interest in data center development.

How Are States Currently Handling Data Center Power?

Wyoming is not alone in wrestling with this issue. Across the United States, data centers currently source about 40 percent of their electricity from natural gas and 24 percent from wind and solar energy, according to the International Energy Agency. However, there is no official national standard for regulating data center power sources, leaving each state to develop its own approach.

Some states have found creative solutions. Cheyenne Light, Fuel and Power, a subsidiary of Black Hills Energy, uses a state-sanctioned tariff that allows it to buy electricity on the open market specifically for data center customers, isolating them from regular customers so their demand doesn't drive up rates for everyone else. Wyoming granted Rocky Mountain Power a similar tariff tool, but the utility has not yet used it.

Other companies are taking matters into their own hands. Prometheus Hyperscale, a data center developer, has proposed building its own power generation, mostly through natural gas, stating on its website that "we will generate what we need without the need to draw from the public utility grid".

What Options Do Large Businesses Have Right Now?

• Self-Generation: Large businesses in Wyoming are legally allowed to generate their own electricity, a strategy trona and soda ash operators have used for years, often supplementing utility power with coal-fired generators.
• Open-Market Tariffs: Some utilities offer tariffs that allow data centers to purchase power on the open market rather than relying solely on utility-supplied electricity, keeping them separate from regular customer rates.
• Third-Party Contracts: Companies can contract with third parties to build power generation, though the legal status of this approach remains murky, especially when it involves nuclear microreactors.
• Cooperative Arrangements: Customer-owned cooperatives, which are not regulated by the Wyoming Public Service Commission, are exploring options similar to the tariffs granted to larger utilities.

What Is Wyoming Doing to Resolve This?

Governor Mark Gordon signed Executive Order 2026-03, "Data Centers the Wyoming Way," in June, declaring that data center development is vital to national security and economic development. The order directs state agencies to coordinate under a new "Wyoming Data Center Development Framework" and outlines principles to ensure Wyoming remains competitive while protecting ratepayers, natural resources, and local communities.

However, the executive order does not prescribe specific regulatory policies. The Wyoming Legislature is considering several approaches to the issue, though details remain limited. Meanwhile, the Wyoming Public Service Commission is drafting new rules for "non-utility generator" businesses, but the effort has been delayed in the past, and some industry watchers worry the final rules may be too narrow to accommodate the variety of power-generation models developers want to pursue.

The regulatory uncertainty is costly. Large-load power demand requests have been on hold for years, even before the data center industry arrived, slowing economic development across multiple sectors. Until Wyoming clarifies its legal framework, companies will continue to operate in a gray zone, unable to commit capital to projects worth billions of dollars.