Data center boom presents evolving opportunities for US gas utilities

The opening for gas utility operators to serve data centers has transformed over the past six months as the energy-hungry facilities struggle to overcome power supply bottlenecks and achieve speed to market.

Gas utilities continue to line up deals to supply on-site power generation at data centers, according to a review of recent earnings calls. But the companies now see scope to develop transmission and storage assets not only to serve data centers directly, but to supply a growing portfolio of gas-fired power plants needed to meet surging power demand.

US power supply bottlenecks are only getting worse, according to Dan Thompson, senior director at 451 Research from S&P Global Energy Horizons. Data center developers had largely exhausted locations with sufficient available electric power capacity by 2024 and now face growing opposition to their projects, he said.

Meanwhile, utility power provided to hyperscale, leased and crypto-mining data centers is set to hit 82.9 gigawatts in 2026 and more than double to 183 GW by 2030, 451 Research projected in its latest US-focused Datacenter Services & Infrastructure Market Monitor & Forecast.

"The amount of power that's being asked for, and then the time frame that it's hoped to be delivered, has just reached such a pace that the utilities — if they ever could keep up — can't keep up anymore," Thompson told Platts, part of S&P Global Energy. "It's just gotten out of hand, frankly."

Inflection point for behind-the-meter solutions

Against that backdrop, data center developers continue to seek behind-the-meter solutions, creating opportunities for gas utilities to ship fuel to colocated generation facilities.

451 Research has tracked more than 100 behind-the-meter power generation projects linked to data center developments. Among those projects, six operational data centers are currently tapping about 1 GW of on-site gas-fired generation capacity.

"There's a very small number that are doing this today," Thompson said. "There are a good amount that are under construction currently, though."

Washington Gas Light Co. on March 6 announced an interconnection project to a 24-megawatt data center development in its Maryland service territory. The project marked its first such deal and came nearly two years after the AltaGas Ltd. subsidiary first touted the opportunity to supply data centers from its distribution system.

The project also underscored a view within the sector that gas utilities are likely to work with small and medium-sized data centers, while gas transmission companies supply hyperscale facilities.

AltaGas-owned gas utilities have completed engineering and design studies for other data center interconnections in Maryland, Virginia and Michigan, AltaGas President and CEO Vern Yu said on March 6 during the company's fourth-quarter 2025 earnings call.

Columbia Gas of Virginia Inc. has fielded more than 40 inquiries about supplying data centers, Lloyd Yates, president and CEO of parent company NiSource Inc., said on Feb. 11 during the company's fourth-quarter 2025 earnings call. As of Feb. 13, Enbridge Inc.'s gas transmission segment was entertaining more than 50 data center opportunities totaling up to 10 billion cubic feet per day of gas demand, according to company President and CEO Greg Ebel, who added he expects to start sanctioning projects in 2026.

Many inquiries will not materialize into real demand, Thompson said. But he expects the landscape of behind-the-meter projects to look very different by the start of 2027.

Buckeye State buzz

In recent earnings calls, several gas utility operators highlighted data center opportunities in Ohio. The state has many draws, including a political and regulatory climate supportive of data center projects, in-state gas supply and transmission project opportunities, Chesapeake Utilities Corp. Chairman, President and CEO Jeff Householder said on Feb. 26. Chesapeake's transmission subsidiary Aspire Energy Express LLC was exploring additional gas transportation deals with Ohio data centers, he said. Aspire announced a deal in July 2025 to build a pipeline to a gas fuel cell facility colocated at a Central Ohio data center.

Chesapeake was also leveraging its Marlin Gas Services LLC business to truck compressed natural gas to a data center development north of Columbus, Ohio, Householder said.

Columbia Gas of Ohio Inc. planned to further explore data center opportunities following passage of Ohio Senate Bill 103, NiSource CFO Shawn Anderson said. The legislation, which took effect March 20, establishes a framework for gas utilities to contract with large load customers.

Asked about the potential to move more gas out of Pennsylvania shale fields to Ohio data centers, Seneca Resources Co. LLC President Justin Loweth said the prospects for large greenfield transmission projects remain "pretty challenged." Seneca is National Fuel Gas Co.'s upstream arm.

However, brownfield pipeline developments like National Fuel Supply Corp.'s Tioga Pathway project can help Marcellus and Utica gas supplies reach premium markets, Loweth said on Jan. 29 during National Fuel's fourth-quarter 2025 earnings call. Some very large interstate pipelines also have "real opportunities" to ease bottlenecks by investing in minor modernizations or compression additions, he said.

Transmission and storage potential

Analysts have lately been seeking guidance on infrastructure investment opportunities in other states expected to see substantial data center growth.

Asked about serving future data centers, Southwest Gas Corp. President Justin Brown said the company's Great Basin Transmission Co. expansion in northern Nevada could potentially accommodate more capacity than currently planned once design project details are finalized.

"I think we feel confident that there's demand there and interest that people would take that," Brown said on Feb. 25.

Southwest Gas received interest in 1.76 Bcf of new capacity. It ultimately settled on an 800-million-cubic-foot expansion to accommodate shippers prepared to offtake by the end of 2028, according to Brown.

After announcing a potential 5-Bcf expansion of its Mist natural gas storage facility in Oregon, Northwest Natural Holding Co. President and CEO Justin Palfreyman touched on the potential to further develop storage assets to support behind-the-meter projects.

Palfreyman did not announce any specific additional projects, but said there are reservoirs that Northwest Natural could develop for storage.

"We do believe there is strong customer demand for this," he said on Feb. 27 during the company's fourth-quarter 2025 earnings call. "Just what you're seeing in the broader energy constraints in the Pacific Northwest region, with one major interstate pipe serving the region, gas storage is uniquely valuable here."

Enbridge is looking across its gas utility footprint in Ontario, the Great Lakes region and Utah for more storage, Michele Harradence, president of the company's gas distribution and storage division, said on the company's earnings call in response to a question about developing storage for data centers.

Piggyback on new power generation

In some cases, gas utilities noted indirect opportunities to serve data centers by building new arteries to power plants that will serve the facilities.

Duke Energy Corp. in February announced an 18% increase to its five-year capital plan as it prepares to serve at least 4.5 GW of data center demand and build 7.5 GW of gas-fired generation through 2031. Part of that capex increase will flow through Duke's gas utility business, targeting "fuel security infrastructure to support future combined-cycle plants in the Carolinas," Duke CFO Brian Savoy said on Feb. 10.

Piedmont Natural Gas Co. Inc. will build pipelines to serve a 1,365-MW combined-cycle plant in Anderson County, South Carolina, and its Buck combustion turbine project in North Carolina, Duke told Platts. Piedmont is also evaluating a liquefied natural gas project to support future gas plants in the Carolinas, it said.

Enbridge saw potential for its US and Canadian gas utilities to supply up to 5 Bcf per day of incremental gas demand from power generators, Ebel said. Enbridge plans to invest about $3 billion per year into its gas distribution segment to support new connections and power demand, he said.

Spire Inc. President and CEO Scott Doyle on Feb. 3 said his company's large load opportunity lies chiefly in serving new gas-fired generation and coal plant conversions. The company can quickly ramp up capacity to serve generators by adding compression to its Spire STL Pipeline LLC and MoGas Pipeline LLC systems, Doyle previously told Platts.

Clarity on large load potential

Gas utilities have sometimes grouped data centers, power plants and advanced manufacturing facilities together when discussing large load opportunities, making it unclear which categories within business development pipelines are advancing.

UGI Corp. President and CEO Bob Flexon on Feb. 5 said a small group of previously disclosed negotiations to ship gas to large load customers in Pennsylvania was moving forward, and he hoped to make an announcement by September.

Flexon said he was encouraged by a recent proposal by the White House and 13 state governors in the PJM Interconnection region for PJM to hold an emergency auction geared toward developing power generation resources to serve data centers.

In November 2025, Tulsa-based One Gas Inc. outlined a plan to serve new power generation and data centers through system enhancement projects modeled after an Austin, Texas, project. It also said it has lined up opportunities to serve about 1.5 GW of new utility-scale generation across Kansas, Oklahoma and Texas.

On Feb. 19, the company announced it will invest about $120 million to ship over 100 Bcf of gas annually to Western Farmers Electric Cooperative in southeastern Oklahoma. In competing for these deals with midstream operators, the gas utility regulatory structure has provided an edge, according to One Gas President and COO Curtis Dinan.

"It's very transparent by being able to look at our tariffs," Dinan said. "In many ways, just that transparency gives us a competitive advantage."