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Data Center and Power Plant Colocation
Brendan KellyMay 7, 2025 9:00:00 AM2 min read

Analysis: Where to Colocate a Data Center with an Underutilized Power Plant

Analysis: Where to Colocate a Data Center with an Underutilized Power Plant
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How Regulatory Data Becomes Actionable Intelligence

Organizations can leverage energy regulatory data to identify complex business risks and opportunities. However, these insights often remain hidden within dense and disconnected sources, posing a major barrier to utilizing this information to better understand complex issues.

One of the energy industry’s biggest questions is how utilities can meet growing energy demand from data centers. Here’s how to use the power of regulatory intelligence to gain insights on this topic from publicly available data, including a rate case, an integrated resource plan and utility earnings calls.

The Starting Point: Pipeline Rate Case Analysis

An analysis of Kinder Morgan’s recent rate case settlement for the Southern Natural Gas pipeline identifies a business risk: certain customers might cancel their service contracts due to underutilization. Among the potentially at-risk parties was Calhoun Generating Facility, a generating station that was recently acquired by Alabama Power.

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Connecting the Dots: Alabama Power's Strategic Plans

To understand the implications fully, additional context about Alabama Power's operations and strategy provide further insights. An analysis of Alabama Power's earnings call transcripts and their integrated resource plan highlights the following:

  • Alabama Power has significant ambitions to expand service to data centers
  • The company has already signed contracts to support 1,000 MW of data center capacity
  • These contracts include a notable 200 MW agreement with Meta

This creates an interesting scenario within Alabama Power's operations:

  • On one hand, the company owns Calhoun Generating Facility, a generating station so underutilized that it might cancel its natural gas service contract with Southern Natural Gas
  • On the other hand, the company has significant demand for power generation to serve its growing data center customer base

A Potential Solution

By connecting these seemingly disparate pieces of information across multiple data sources, the analysis produces a potential opportunity: Alabama Power could consider colocating a data center with the Calhoun generating station. This approach could:

  • Help meet Alabama Power's growing demand to serve data center customers
  • Shore up the at-risk Southern Natural Gas pipeline contract by ensuring consistent gas utilization
  • Transform an underutilized asset into a strategic advantage

The Power of HData Regulatory AI

By combining purpose-built AI with a centralized regulatory library, HData’s regulatory intelligence platform helps you systematically analyze information across rate case filings, integrated resource plans and your own uploaded documents. 

Learn More

For more information on available and upcoming data sources in the HData platform, Intelligence features and AI capabilities, request a demo.

 

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Brendan Kelly
Brendan Kelly is a seasoned energy professional with more than three decades of commodities experience, including as a physical gas marketer at J.P. Morgan and Mercuria. He is an HData account executive based in New York.

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