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Trend Watch: The Next Energy Constraint Isn’t Supply. It’s Delivery.

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The largest buildout in a generation is stalling at the connection point. That’s where the supplier opportunity is

Jamie R. Van Doren

This is the second in a three-part Trend Watch series on what’s actually changing in energy. Part one covered the largest power customers in the country walking away from the utility model. This installment covers what stopped them anyway.

On August 3, the governor of Texas told the data center industry to stop.

Less than a year after branding his state the epicenter of AI development, Greg Abbott ordered a halt to data center approvals. No new connections to the Texas grid until the Public Utility Commission of Texas and ERCOT audit what’s already sitting in the queue. Developers now have to disclose the tax breaks they’re receiving, how much power they’ll draw and generate, how much water they’ll use and how they’ll cool the facility, what they’re doing to limit the effect on the people who live nearby, and who actually owns the building.

His instruction to regulators wasn’t subtle. Any project that fails the process has to be denied.

The number behind the order explains it. ERCOT’s interconnection queue holds roughly 474 gigawatts of requests. That’s more than five times the state’s all-time record peak demand. Around 90 percent of it is data centers.

Texas wasn’t even first. New York paused approvals for large data centers in July, for up to a year, while it writes new rules. ERCOT has already postponed the first round of classification notices under its new large-load process and goes back to state regulators on August 20 for more time.

They Solved Supply. It Didn’t Help.

Last month we covered the largest power consumers in the country deciding they could no longer wait for the grid. Microsoft restarting Three Mile Island. Meta buying the entire output of an Illinois nuclear plant. They looked at utility timelines, decided the math didn’t work, and went and bought the megawatts themselves.

It worked, on paper. Meta’s Illinois output starts in 2027. Three Mile Island targets 2028.

Those are contracts, not electrons. The buildings meant to use that power still have to be permitted, connected, cooled, and backed up. Some of them can’t be.

That’s the constraint hiding inside the energy conversation, and it isn’t generation. It’s delivery. Getting electricity from where it’s made to where it’s needed, through equipment that exists, into a building that can shed the heat, backed by something that turns on when the grid can’t.

Each of those is a separate point of failure. Each of them is somebody’s contract.

The Wall Is Made of Equipment and Permission

Start with the hardware. GE Vernova closed the second quarter with 116 gigawatts of gas turbine orders and slot reservations, up from 100 three months earlier, and is now booking 2031 delivery slots. Siemens and Mitsubishi are four to five years out too. That isn’t a shortage of demand, capital, or willingness to build. There’s a shortage of the physical objects that move and convert electricity, and of the factories that make them.

Then permission. Interconnection studies, transmission planning, environmental review, local zoning. A transmission line in this country still takes ten to fifteen years to permit and build. The Texas order didn’t create that friction. It formalized it.

Then heat. A gigawatt-scale computing facility is, in engineering terms, a very large space heater with a business model attached. It’s a determining constraint on where the project can go at all, which is why water use showed up in a grid reliability order.

And then behavior. Grid planners historically treated large industrial loads as steady and predictable. AI compute isn’t.

On July 10, 2024, a lightning arrestor failed on a 230 kV line in northern Virginia. Auto-reclose settings turned that into six faults in 82 seconds, and roughly 1,500 megawatts of data center load came off the system at once. Those facilities are built to protect themselves from voltage disturbances. NERC formed a task force.

Three weeks ago it happened again at double the scale. On July 22, a line fault in Ashburn pushed more than three gigawatts onto backup power, about three percent of PJM’s demand. Dominion was clear it hadn’t shed those customers. Their own protection systems did. The disturbance registered as far west as Chicago.

Nothing was short of power. The load moved faster than the system could respond, because equipment inside private buildings decided it should.

The Grid Is Already Borrowing From Private Buildings

In May, the Department of Energy issued an emergency order under Section 202(c) of the Federal Power Act authorizing PJM to deploy backup generation resources at data centers and other major facilities across the Mid-Atlantic. In late July, a comparable order covering the Southwest Power Pool allowed operators to call up idle backup generation across 17 states, in territory home to about 20 million people. In early July, PJM issued the first emergency backup-generator warning in its history.

These orders usually get read as a story about how close the grid is running to the edge. That’s true. It’s also not the most useful part.

The useful part is where that reserve capacity actually lives. It lives in private buildings. It’s the generator set behind a data center, the switchgear in a hospital basement, the controls package that decides what happens in the four seconds after utility power drops. Federal reliability policy now quietly assumes all of that equipment exists, works, has fuel, and answers when called.


Somebody specified that equipment. Somebody installed it, integrated the controls, negotiated the fuel contract, ran the load bank test, and shows up when it fails. Those are supplier relationships, and the reliability of the American grid is now leaning on them.

Ohio Is Already Paying For This

None of this is happening somewhere else. Ohio sits inside PJM, the grid operator covering thirteen states, and PJM’s capacity market is the clearest scoreboard we have for whether delivery is keeping up.

It isn’t. PJM has now missed its own reliability requirement in two consecutive capacity auctions, the first time in its history the entire region has come up short. July’s auction fell 6,831 megawatts short and cleared at the federally approved cap of $325 per megawatt-day, for $16.4 billion. PJM says it will ask federal regulators in September for a special backstop procurement. In the prior auction, nearly 5,100 megawatts of the increase in forecast peak load came from data centers.

Closer to home, the numbers are contested. Regulators approved an increase to AEP Ohio’s transmission rider in March that added about $7.90 a month for a typical household, though offsetting decreases elsewhere on the bill left the average net change closer to twenty cents. Under AEP Ohio’s large-load tariff, data centers must pay for at least 85 percent of the capacity they reserve whether they use it or not. The Ohio Manufacturers’ Association has appealed that tariff to the Ohio Supreme Court, and a bill in the legislature would extend it statewide.

If you operate a facility in Ohio, this is already in your budget. If you sell to companies that operate facilities in Ohio, this is already in theirs.

Delivery Is a Procurement Category

This is the part most people miss.

You don’t have to generate electricity to sell into the energy buildout. The work is in everything that stands between a megawatt and a running operation.

Electrical contracting at industrial scale. Substation and switchgear work. Mechanical, HVAC, and thermal management. Water treatment and cooling systems. Civil and site construction. Controls, instrumentation, and automation. Backup generation, load bank testing, and commissioning. Fuel supply and emergency logistics. Operational technology cybersecurity, a different discipline from IT security. Environmental and permitting consulting. Ongoing operations and maintenance.

Some of that work has already started. In Virginia, owners are retuning facility control systems so sites ride through brief faults instead of dropping offline, and federal regulators have told NERC to write mandatory standards for large computing loads by year end. All of it has to be engineered, installed, tested, and documented, site by site.

For an MBE, the question isn’t “Are we an energy company?” Almost none of these firms are. The question is “Do we work on the systems that make power usable?” For a surprising number of businesses in our network, the honest answer is yes, and has been for years, in buildings nobody called an energy project.

The New Rules Are Also a New Opening

Look again at what Texas is asking developers to submit. Tax breaks. Power use and generation. Water use and cooling. Efforts to reduce the impact on nearby residents. Facility ownership.

Three of those are engineering questions. Two aren’t.

Community impact and ownership disclosure are social license questions, and they just landed inside a grid connection application. That happened because the politics moved. On July 18, a group called HumansFirst coordinated 142 protests across 42 states against the data center buildout. A June Reuters/Ipsos poll found only about a third of Americans approve of the current pace of construction, and just 14 percent would want a facility in their own community.

For a buyer assembling a project team under that kind of scrutiny, a supplier base that’s local, certified, documented, and visibly connected to the community stops being a values statement and starts being part of the filing.

No regulator has said anything about supplier inclusion. But when reviewers start asking who benefits from a project and who owns it, the answers get easier for buyers who can point to real local firms doing real scopes of work. That’s a case OMSDC’s members are unusually well positioned to help make, and almost nobody is framing it that way yet.

What To Do About It

For MBEs:

Rewrite your capability statement in the language of this market. Not “general contracting” but substation civil work. Not “IT services” but OT security assessment for industrial control systems. Buyers in this sector search for specific scopes, and generic language reads as no experience. Then get clear about which scopes you can carry alone and which require teaming. The pursuit pod model from our Growth Under Pressure white paper applies directly. One firm rarely covers a delivery scope. Three often can.

For corporate members:

Your supplier bench is about to be tested by demand you probably didn’t forecast. Waiting for a formal RFP means competing for what’s left. Start the qualification conversations before the constraint becomes an emergency, and look hard at the maintenance, backup, and commissioning categories. Those are the ones that quietly determine whether your operation stays up the next time a fault ripples through the system.

The Takeaway

For a century, the hard question in energy was how to make more of it. That question got solved. What they found on the other side was a second wall, built out of transformers, permits, cooling towers, interconnection queues, and public patience.

The next decade of energy work isn’t going to be dominated by the companies that produce power. It’s going to be dominated by the ones that deliver it, cool it, back it up, secure it, and keep it running when the margin gets thin.

That’s not an energy industry. That’s a construction, trades, engineering, logistics, and services industry, and it’s the one our members are already in.

Next month we close the series with what gets built next, and with a company right here in Ohio that’s already building it.

Until then, the question to sit with is this. If the biggest buyers in the country can own the power and still not be able to use it, who do you think they’re going to call?

Trend Watch: The Biggest Energy Customers Aren’t Waiting for the Grid Anymore

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Why the private energy buildout is creating a supplier opportunity that everyone else is missing.

This is the first in a three-part Trend Watch series on what’s actually changing in energy, beyond the daily headlines about policy fights and AI demand. The argument across these three pieces: the energy economy is being rebuilt from the ground up. I believe the supplier opportunity is bigger than anyone is talking about.

What Changed?

In September 2024, Microsoft signed a 20-year power purchase agreement with Constellation Energy to restart Unit 1 of Three Mile Island. Yes, that Three Mile Island. The plant had been shut down since 2019, mothballed after it couldn’t compete with cheaper natural gas. Now, Constellation will spend $1.6 billion to bring it back online, targeting 2028. The facility has been renamed the Crane Clean Energy Center. Every megawatt it generates, all 835 of them, will go to one company – Microsoft.

This is not how the energy business is supposed to work.

For roughly a century, the model was simple. Utilities built power plants. Customers, including very large ones, bought electricity from those utilities at regulated rates. Even the biggest industrial users were, fundamentally, retail buyers. They negotiated terms. They didn’t commission their own reactors.

But that model is breaking. In any other timeline, the Microsoft deal would be considered an outlier. It’s quietly becoming the new template.

In 2025, Amazon Web Services signed a 17-year agreement with Talen Energy to take 1.92 gigawatts directly from the Susquehanna nuclear plant in Pennsylvania. Google signed a fleet agreement with Kairos Power to deploy small modular reactors by 2030, alongside separate geothermal deals with Fervo Energy. Amazon has invested $500 million in small modular reactor development of its own. Meta signed a 20-year deal with Constellation for the entire output of the Clinton Clean Energy Center in Illinois — 1.1 gigawatts beginning in June 2027. And Meta has also disclosed an even larger 6.6 gigawatt nuclear procurement strategy to support its “Prometheus” AI data center project. For context, that’s more electricity than the peak demand of the city of Chicago. Going to one company. For one project.

Stack those announcements together and you can see the pattern. The largest power consumers in the country are no longer waiting for utilities to build what they need. They’re commissioning their own infrastructure, signing private agreements with generators, and in some cases buying entire plants. They’re exiting the consumer side of the utility model and building their own energy fiefdoms instead.

That shift is the single most important thing happening in American energy right now. And almost no one is framing it that way.

Why Does It Matter?

Most of the mainstream energy conversation is, understandably, still focused on supply and demand. How much power will the grid need? Where will it come from? Can renewables scale fast enough? Will gas plants get permitted? Those questions matter. They’re also a generation behind the actual story.

The actual story is more profound, with much bigger implications for all of us. So, what happens when the biggest customers stop relying on the utility companies? Three things.

First, the financing model changes. A traditional utility raises capital based on regulated returns and recovers costs through rate base over decades. A hyperscaler buying a nuclear plant is doing a different kind of math. They have the balance sheet to underwrite the entire project against their own consumption. That makes some projects pencil out that wouldn’t have otherwise. It also concentrates risk in a way the system hasn’t ever had to plan for.

Second, the procurement model changes. When Microsoft signs a 20-year power purchase agreement, they’re not just buying electrons. They’re buying all the infrastructure and any new capacity. They also have a direct stake in site selection, permitting timelines, construction quality, fuel logistics, cybersecurity, and the ongoing operations. Decisions that used to live inside a regulated utility, that were invisible to most, now live inside a procurement function at a tech company. This is the upside, the potential payout, for companies nimble enough and in-the-know. Those procurement teams are sourcing differently, and they’re sourcing fast.

Third, the supplier model changes. This is the part that matters most for OMSDC’s community. And it’s the part the trade press has barely started to cover. A century-old utility has an established supplier bench. They’ve worked with the same engineering firms, the same EPC contractors, the same equipment vendors, for decades. It’s difficult for someone new to get a toe in the door. But when a tech company decides to build its own energy infrastructure, that bench doesn’t transfer automatically. The supplier ecosystem has to be rebuilt for a new kind of customer, with new requirements, on a new (faster) timeline.

That’s the opening. That’s your foot in the door.

The Supplier Ecosystem Most People Haven’t Mapped

When a hyperscaler commits to a multi-billion-dollar energy project, they need more than a generator. They’re doing an entire buildout. Each layer of that buildout is a supplier opportunity, and most of them are categories where our minority-owned businesses already have real capability.

Site selection and acquisition. Permitting and regulatory work. Civil and structural construction. Heavy electrical contracting at industrial scale. Mechanical, HVAC, and cooling systems. Controls and automation. Fuel and logistics for backup and bridging power. Cybersecurity for operational technology (which is a different discipline from IT security). Workforce. Ongoing operations and maintenance. Site security. Environmental compliance. Communications infrastructure.

Each of these is a category. Each category is hiring. And because the projects are moving faster than typical utility timelines, the supplier benches are forming right now. Not in 2030.

There’s a simple test for whether a market is still open. Ask whether the major buyers have settled on their preferred suppliers yet. For hyperscaler energy projects, the answer is likely, mostly no. Microsoft, Amazon, Meta, and Google are all building these supplier relationships in real time, right now. The companies that get in the door now are establishing track records that will matter for the next 20 years of buildout. OMSDC and NMSDC need to be at the forefront of helping to knock on those doors.

Because the companies that wait until the RFPs are published are likely to be competing for second-tier work after the primary benches are locked in.

Why This Is Happening Now

It’s worth understanding why this shift is occurring, because the explanation tells you whether this is a moment or a movement.

The short answer is that the utility model simply cannot deliver what the largest customers need on the timelines they require. Not anymore. Especially with our ageing infrastructure and lack of investment in that infrastructure.

A new transmission line in the United States takes 10 to 15 years to permit and build. Connecting a new data center to the grid in many markets takes three to seven years. The largest hyperscalers are planning capacity expansions on 18 to 36 month cycles, driven by AI training and inference demand that didn’t even exist five years ago. Waiting for the grid to catch up is not an option. The perceived economics of being late to AI are orders of magnitude larger than the cost of building your own power.

Add to that the carbon commitments these companies have made. Microsoft has pledged to be carbon negative by 2030. Google and Amazon have similar targets. Buying generic grid power, which still includes substantial fossil generation in most regions, doesn’t get them to those goals. Signing direct deals for nuclear, geothermal, or behind-the-meter renewable generation does. While the current Administration has been anti-Green, the carbon commitment is still a policy lever. The infrastructure deal is how these companies can execute on their commitment.

Finally, regulatory uncertainty is pushing in the same direction. With the current federal posture pulling back on parts of the clean energy agenda, hyperscalers cannot count on policy to deliver the energy mix they’ve committed to. So they’re building it themselves.

None of these forces are temporary. The economics of AI compute, the carbon commitments, and the regulatory volatility are all multi-decade phenomena. This is a movement, not a moment.

What Should You Do?

For smaller MBEs:

If your business touches any part of the energy buildout, even tangentially, this is the year to position. That includes electrical contracting, HVAC and mechanical work, civil construction, trucking and fuel logistics, security services, environmental consulting, IT and OT cybersecurity, facilities maintenance, and specialty trades. Get your certifications current. Get your capability statement specific to the energy and data center sector, even if most of your work has been in other industries.

The biggest mistake here would be assuming you need to be an “energy company” to participate. You don’t. The hyperscalers are buying the same services any large industrial project would need, from suppliers who can deliver on infrastructure timelines.

For larger MBEs:

Map your capabilities against the supplier categories above and identify where you can compete for primary work, where you can compete as a tier-two partner under a larger prime, and where teaming with another MBE would expand your range. The pursuit pod model from our recent Growth Under Pressure white paper applies directly here. A single MBE may not have the breadth to bid a full energy project. Three MBEs together often can.

Also begin the conversations with hyperscaler procurement teams now, before the formal RFP process opens. These companies are sourcing relationally as well as transactionally. The firms that are known, that have shown up, that have documented their capabilities and references in the right way, will be the firms that get called.

For corporate members:

If you operate in or around the energy, manufacturing, or technology sectors, your supplier base is about to be tested by buildout demand you may not have forecast. The same shortage of qualified labor and qualified suppliers that’s driving hyperscaler decisions is going to affect every adjacent industry. Now is the time to expand your supplier bench, not after the constraint becomes a crisis.

For procurement teams specifically: the suppliers who serve hyperscaler projects effectively will become the most sought-after firms in the country over the next decade. Being in those relationships early is a competitive advantage. Being in those relationships through OMSDC’s network is a way to find capable firms before they’re booked.

The Takeaway

For most of the last century, the question of who supplied energy was answered by who held the utility franchise. That question is being reopened. The largest customers in the country have decided they can no longer wait for the grid to deliver what they need, when they need it, in the form they need it.

That decision creates a new energy economy with new buyers, new contracts, and new supplier relationships forming in real time. The companies that recognize what’s happening will help build it. The companies that don’t will read about it in five years and wonder how they missed the opening.

Next month, we’ll cover the constraint that’s becoming a bigger problem than the power itself, and the supplier opportunity hiding inside it.

Until then, the question to sit with is simple. If the biggest energy customers in the country are no longer waiting for the grid, what are you waiting for?