{"id":114297,"date":"2025-07-07T20:51:55","date_gmt":"2025-07-08T00:51:55","guid":{"rendered":"https:\/\/www.citizen.org\/?post_type=news&p=114297"},"modified":"2025-07-29T20:53:01","modified_gmt":"2025-07-30T00:53:01","slug":"blackstones-ai-power-grab-faces-federal-scrutiny","status":"publish","type":"news","link":"https:\/\/www.citizen.org\/news\/blackstones-ai-power-grab-faces-federal-scrutiny\/","title":{"rendered":"Blackstone\u2019s AI Power Grab Faces Federal Scrutiny"},"content":{"rendered":"

This article appeared in the July\/August 2025 edition of Public Citizen News. Download the full edition here<\/a>.<\/strong><\/em><\/p>\n

The future of artificial intelligence might hinge not just on chips and code, but on who controls the power to keep it all running. In Virginia, where hulking data centers loom like sealed fortresses on former farmland, a regulatory battle over a single gas-fired power plant hints at an approaching storm over energy monopolies, and the price our climate will be forced to pay for AI\u2019s rapid development.\u00a0<\/span><\/p>\n

Earlier this year, Public Citizen challenged a move by the private equity firm Blackstone to acquire an 800 megawatt gas-fired power plant just outside of Washington, D.C. The plant, located in Virginia\u2019s Loudoun County, sits close to numerous power-hungry data centers, making it a potentially profitable acquisition for the massive private equity firm.<\/span><\/p>\n

The acquisition is also part of a disturbing trend for energy customers across the country: large private equity firms have been purchasing land, data center companies, and power plants near major data center hubs to set themselves up to profit from a boom in AI usage that could create a run on energy across the United States.<\/span><\/p>\n

The $1 billion proposal by Ares Management to sell the 800 MW Potomac Energy Center in Loudoun County, Va., to Blackstone raises concerns about anti-competitive practices by the world\u2019s largest investment management company. (Blackstone\u2019s CEO, Stephen A. Schwarzman, is a close confidant of President Trump and made $1 billion just last year alone.)<\/span><\/p>\n

In Virginia \u2014 home to more than 25% of the entire data center capacity of the United States \u2014 Blackstone controls as much as 1,000 MW of the data center load.<\/span><\/p>\n

In its attempt to take control of the gas power plant, Blackstone omitted its role in the data-center boom in a filing with the Federal Energy Regulatory Commission (FERC).<\/span><\/p>\n

\u201cBlackstone’s lawyers have argued that FERC has no current authority to assess an applicant’s control over data centers,\u201d Tyson Slocum, director of Public Citizen\u2019s Energy Program <\/span>told a subcommittee of the U.S. House of Representatives Committee on Oversight and Government Reform in April<\/span><\/a>. \u201cThen last summer, FERC was caught off guard when 30% of Virginia’s data centers suddenly went offline with a resulting surge in electricity nearly causing a blackout.\u201d<\/span><\/p>\n

Projections of exactly how much power will be required to meet the future needs of AI are wildly scattered.\u00a0 At the April hearing, Slocum emphasized that forecasts of massive infrastructure investment\u2014spurred by surging data-center growth\u2014risks leaving consumers and taxpayers burdened with energy capacity beyond what will be needed to power AI. He warned of repeating the pattern seen in the early 2000s, when electricity forecasts severely overestimated actual demand due to unanticipated efficiency gains.<\/span><\/p>\n

\u201cEnergy use per computation has decreased by 20% every year since 2010,\u201d said Slocum. \u201cThere are ample opportunities to require or encourage data centers developing generative AI to pursue energy demand management programs, limiting the need for expensive new energy generation infrastructure.\u201d<\/span><\/p>\n

\u201cI’m very concerned that President Trump’s decision to use emergency powers to usurp state and local laws will force taxpayers and ratepayers to cover the cost of hastily implemented energy infrastructure,\u201d added Slocum. \u201cFederal energy regulators seem to lack adequate authority to ensure that the demand for data center energy will not disrupt the current demand by homes and businesses.\u201d<\/span><\/p>\n

As part of Public Citizen\u2019s filing with FERC, Slocum asserts that Blackstone\u2019s application to FERC omits critical data, including the private equity firm\u2019s substantial ownership of the data centers.<\/span><\/p>\n

Over the past year, two alarming grid disruptions\u2014in July 2024 and in February 2025\u2014triggered a sudden shutdown of 1,500\u202fMW and 1,800\u202fMW of data<\/span>\u2011<\/span>center load, respectively.<\/span><\/p>\n

\u201cThese disturbances nearly triggered cascading blackouts in PJM\u2019s \u2018data<\/span>\u2011<\/span>center alley\u2019 around Loudoun and Fairfax counties,\u201d said Slocum. \u201cIf Blackstone were to own the power plants providing energy to these data centers, the risk of anti<\/span>\u2011<\/span>competitive and abuse of consumer protections is very real.\u201d<\/span><\/p>\n

Hypothetically, Blackstone could manipulate energy markets, shifting its significant control of regional data center load away from its longtime consumers and moving it to power data centers.<\/span><\/p>\n

In its filings with FERC, Blackstone doesn\u2019t deny owning significant data center capacity in Virginia. But the private equity firm has neither confirmed exactly which data centers it owns, nor stated the load size in megawatts of such facilities, let alone divulged whether it is in the process of building additional data center capacity in the region.<\/span><\/p>\n

In May, the company announced it would buy TXNM Energy, a monopoly utility in New Mexico and Texas with 800,000 customers whose only option is to buy electricity from the utility. The company already has controlling interests in the utilities FirstEnergy and Northern Indiana Public Service Company, and owns a huge fleet of fossil fuel power plants across the country, along with 7,000 miles of Tallgrass Energy\u2019s pipelines.\u00a0<\/span><\/p>\n

\u201cData centers consume so much energy because they’re filled with millions of microprocessors that are doing millions of computations each minute,\u201d said Slocum. \u201cAs the use of AI expands, data centers should have to improve the energy efficiency of these facilities and of these microprocessors. There are ways we can ensure an AI future doesn\u2019t accelerate climate change or drive up energy prices for consumers, but we need the companies to take measured steps today to ensure those protections.\u201d<\/span><\/p>\n ","protected":false},"featured_media":0,"parent":0,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"class_list":["post-114297","news","type-news","status-publish","hentry","tax_topic-climate-energy","tax_topic-public-citizen-news","tax_news-featured-articles"],"acf":[],"yoast_head":"\nBlackstone\u2019s AI Power Grab Faces Federal Scrutiny - Public Citizen<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.citizen.org\/news\/blackstones-ai-power-grab-faces-federal-scrutiny\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Blackstone\u2019s AI Power Grab Faces Federal Scrutiny - Public Citizen\" \/>\n<meta property=\"og:description\" content=\"This article appeared in the July\/August 2025 edition of Public Citizen News. 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