Power Is the New Zoning
For most of the last two decades, the first question in site selection was about land. Is there a site? Is it entitled? Can we build what we need to build on it?
Those questions have not gone away; however, there is a new one sitting in front of it now, and a lot of developers and economic development teams are not asking it early enough. Can the electric utility deliver the power this project needs, on a timeline that works? The short answer, for a growing number of sites, is no.
The data center buildout has changed the math across most of the country. AI infrastructure alone is driving electricity demand at a scale the grid was not designed to absorb quickly. According to the Department of Energy, U.S. data center power consumption could double by 2028. That demand is not evenly distributed, but it is showing up in utility queues in ways that affect projects that have nothing to do with data centers. Industrial developers, manufacturers, mixed-use projects with significant energy loads are all competing for interconnection capacity in queues that did not exist at this scale five years ago.
The practical consequence is that a site can be shovel-ready in every traditional sense (clear title, entitlements in hand, infrastructure at the curb) and still be years away from receiving the power the project requires. Utilities are quoting interconnection timelines of 18 months to four years in markets where the queue is backed up. That is not a permitting problem or a political problem; it is a capital problem. A project that cannot receive power on schedule cannot be financed on the terms the pro forma assumed.
The underwriting implication follows directly. Power availability and timeline need to be in the due diligence model before you are deep into a deal. The site visit, the phase one, the title work: all of it is happening now, in most transactions, before anyone has picked up the phone and asked the utility a direct question about queue position and delivery timeline. That has to change.
This is not unique to large industrial projects. Healthcare facilities, multi-tenant commercial, mixed-use residential with significant common area loads, really any project where power reliability is operationally critical needs to treat utility capacity as a site selection variable, not a construction detail.
Some communities are pre-negotiating utility agreements as part of their site readiness packages, so a developer can show up and know the power timeline is solved. Communities where this conversation happens after a letter of intent is signed run the risk of losing the deal.
Power is not just a construction detail; it is a critical site selection criterion. We all need to start treating it like one.
By Chuck Peters
Advisor, ExecutivePulse | Chair, Government Affairs Committee, Erie Regional Chamber | Board Member, Infinite Erie & Ben Franklin Technology Development Authority, | Managing Partner, Altair Holdings.