Utilities to discuss best practices for data center customer engagement at DTECH Data Centers and AI
Few entities have as clear a view into the challenges and opportunities of data center growth as regulated utilities.
They’re required to serve the customer – in this case, the data center developer – but there’s something of a learning curve when that customer comes knocking with lofty expectations and an ask of hundreds of megawatts, if not more.
“The business model of a data center is drastically different than a utility model,” explained Scott Scharli, Director of Strategic Energy Management at Salt River Project (SRP).
Scharli said colocation developers will plan for worst-case scenarios to make sure their customers have enough compute—peak load on the hottest day, with headroom—then ask utilities to build for that scenario. But the load almost never materializes in the timeframe the customer forecasted, he said. This leads to utilities potentially overbuilding infrastructure and generation assets.
To mitigate the financial risk that comes with potential stranded assets, Salt River Project is implementing a minimum demand charge and long-term collateral requirement—set to take effect in November. It’s not unlike what other utilities are doing–designed to ensure customers have more skin in the game.
These are the types of learnings that come out of years of navigating these working relationships. And to data centers’ credit, Scharli says these customers are learning and adapting to utility planning processes. They are even beefing up their expertise with former utility employees.
Scharli is one of several speakers that will be part of the panel, “Data Center Playbook: Best Practices for Data Center Customer Engagement” at DTECH Data Centers and AI next month in San Jose.
Data centers are the types of customers who stretch utilities to be better from a customer service perspective, Scharli said. But transparency and managing expectations are both critical for a successful partnership.
“The engagement is absolutely key to making this work,” he said.
Jason Willard, Director of Business Development at Georgia Power, also knows a thing or two about data center customer engagement.
Data Center customers prioritize not just reliability and capacity, but also sustainability, speed and flexibility, said Willard, who will be joining Scharli and others on the panel. He said they want utilities to be agile partners who provide timely solutions, offer access to renewable energy and bring innovative ideas to the table.
“Data center projects are inherently complex, involving numerous variables that must be carefully managed,” said Willard.
There are five foundational elements Willard said both sides must align on to ensure project success: land, power, capital, team and equipment. Securing the right site early can prevent delays and support long-term growth. Similarly, ensuring reliable and scalable power, clarifying financial responsibilities, assembling strong cross-functional teams, and aligning on infrastructure and equipment needs all contribute to a smooth partnership.
Strong engagement practices—like transparent communication, shared planning, and proactive problem-solving—can make all the difference.
“Regular meetings, transparent reporting, and collaborative decision-making can help mitigate potential issues and enhance the overall relationship,” said Willard.
Early-stage decisions are where long-term success takes root, he added.
“Data Center Playbook: Best Practices for Data Center Customer Engagement” is scheduled for 2:30 – 3:15 p.m. PST on Wednesday, May 28. DTECH Data Centers and AI is being held at the Signia Hotel in San Jose, California. Click here for more information and how to register.
Originally published in Factor This Power Engineering.
