SMUD is staring down a sudden stampede of data center developers, enough that the utility pulled its board into a special informational meeting this week just to get everyone on the same page. The surge in interest, part of a nationwide land rush for AI-scale computing campuses, has Sacramento's power provider asking the uncomfortable question: can the local grid, permitting process and neighborhood rules actually handle another wave of mega-users?
What SMUD disclosed
Staff told SMUD's board that a rush of data center developers has been knocking on the utility's door, and laid out a briefing on the technical, land use and community issues that come with them, as reported by the Sacramento Business Journal. The session was billed as informational, not a vote, meant to give directors a clearer sense of what it would mean if large, compute-heavy facilities actually plant roots in the region.
Why power is the bottleneck
Data centers are notorious power hogs, and AI workloads are cranking that appetite up sharply. The International Energy Agency projects that global data center electricity use will more than double by 2030, which effectively puts utilities in the driver's seat for where these facilities can realistically go. That outlook is a big reason SMUD and other local providers are drilling into details like delivery timelines, on-site generation and major grid upgrades as developers line up for service, according to the International Energy Agency.
Local footprint and deals
SMUD is not new to heavyweight power customers. Board documents show that staff have already negotiated custom electric service agreements with large operators in recent years, including talks involving NTT. Sacramento is also home to active data center campuses, with Prime Data Centers touting McClellan Park and SMUD's reliability as selling points, which means any fresh wave of projects would plug into an ecosystem that exists but is already constrained (SMUD, Prime Data Centers).
Nationwide land rush complicates planning
This is not just a Sacramento story. Across the country, developers and real estate players are scrambling to secure "powered land" - sites that already have entitlements and power lined up - because speed to market is the new currency in the AI era. Industry coverage shows that these powered land deals, long interconnection queues and eye-watering prices for the best parcels are reshaping how data center projects get done and putting utilities like SMUD at the center of zoning fights and grid-capacity debates (Bisnow).
What to watch next
For now, SMUD is stressing that this week's meeting was just a briefing, and the utility's calendar already has committee updates queued up on AI and infrastructure as it refreshes its long-range plans. That sets the stage for more public discussions about how big a role data centers should play in the utility's future mix and under what conditions (SMUD).
Community groups, city planners and SMUD leadership will be watching to see which of today's inquiries turn into formal applications, and how the utility weighs that new load against other goals in its board calendar. Developers, elected officials and residents alike will be combing through future SMUD packets and any interconnection filings for clues about timing and cost. Whether Sacramento turns into a full-fledged AI compute hub will depend on how fast the grid can be upgraded, how much buy-in local neighborhoods are willing to give and whether developers can lock down both the land and the megawatts they are chasing.
