Posted: August 28, 2026, 11:51 am

Data Center Load

If we are being honest, we are getting data center fatigue on these pages. That said, it’s hard to ignore what has been the biggest driver in electricity in the past year and probably into the future. This week Utility Dive ran an opinion piece by Brandon Owens- founder of AIxEnergy.io. It touched on a topic that we’ve covered before, the loss of large loads.

When it comes to large hyper scaler data centers, the majority of the conversation is about where the electricity is going to come from, where to locate, and who is paying for it. While it doesn’t make the public discussion/outrage, utilities serving data centers are well aware that large loads like this can suddenly come offline. While a lot of conversation and planning revolves around these loads being able to curtail when called upon, what happens when they just drop off? While not the first time this has happened, but one morning in late July, a sensor noticed some anomalies in transmission. Since each of these facilities house hundreds of millions to billions in gear, as might be expected, the owners and operators are very cognizant of anything that might cause harm-such as a spike in voltage. Because of this, these centers are quick to either turn off or switch to back up power as they enter protection mode, essentially removing themselves from the grid. When that happened in late July, 3% of the load on PJM just vanished. As we’ve touched on before, electricity is the commodity that for the most part needs to be created and consumed at the same time. One of the key jobs of RTO grid operators like PJM is to make sure that equilibrium is continuous.

Returning to the opinion piece, it read more like good journalism reporting on an event. Perhaps we missed the opinion part or missed the message, so we will add our own. These kinds of events are not going away. As data centers continue to ironically process outrage clicks, we should assume they are here to stay and can become a large reliability issue for some utilities or an RTO. Too little load is an issue just like too little generation, and if there are not plans for instant outages, the cascading effects could be felt. This possibility needs to be added to planning phases of data centers, and might actually be more relevant than some of the current debate topics.

Data Center Back Up?

So picking up where we left off, this week a Scottish company Aggreko filed to go public through a US IPO. Aggreko is a module supplier of power supply and temperature control systems, something along the line of Generac, with the exception that most of their gear is rental. In the filings to IPO, companies are required to disclose data that might be held as a private company. These disclosures and financials become part of the prospectus. Anyway, in the filings, Aggreko revealed that 19% of their revenue is coming from AI data centers, which doesn’t sound all that impressive, but this has historically been an oil and gas play. In some cases, Aggreko gear is being used to power off the grid data centers as they wait to get RTO interconnection completed. While we will have to wait for the published prospectus, it’s fair to assume that the growth in data center business is fueling the capital raise. It will be interesting to see if there are comments about a growing business to address some of the above concerns.

Natural Gas Market Commentary

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Near-term heat continued to provide near-term support to near-term natural gas futures this week. The September 2026 contract firmed into expiration on Thursday to roll off the board at $2.907 per MMBtu. While this is not a noteworthy expiration price on the surface, it was the highest for any September contract since 2022, and the first NYMEX settlement to come in above the corresponding month in 2025 since February.

The market seems to be focused on lingering hot weather across the South and forecasts for widespread heat to start September. This has kept power generation demand elevated throughout August, with even higher demand likely next week. Although power burn for the summer has lagged 2025 on average, recent weeks have seen consumption from this sector come in above year-ago levels.

That dynamic has helped offset growing production and sagging LNG exports, keeping storage growth at bay. The past two weeks have seen builds of 16 and 15 Bcf, respectively, which has worked to narrow the surplus to the five-year average. However, inventories still carry a healthy cushion and remain on track to finish the summer at ample levels heading into the heating season. As a result, any bullish sentiment has remained largely confined to the front of the curve. As September rallied by about 10% from its monthly low into expiration, the Winter 2026-27 strip remained on the mat near multi-year lows.

If heat lingers longer than expected or cold shows up early, it will likely get the attention of the winter strip. But for now, volatility in spot markets and nearby futures has not been enough to drum up much bullish interest in winter gas.