‘We have no leverage’: Lake Tahoe’s power supplier is ditching 49,000 residents for AI data centers, and no single regulator can stop it

NV Energy, a Nevada utility that has supplied most of Lake Tahoe’s electricity for decades, has told Liberty Utilities, the small California company that serves the region, that it will stop providing power after May 2027. The reason is that NV Energy needs the capacity for data centers. This leaves 49,000 Lake Tahoe residents without a clear plan for their energy future.

The Sierra Nevada region, home to ski resorts, lakeside casinos, and around 25 to 28 million visitors each year, is now facing an energy shortage driven by the AI boom. Northern Nevada has become one of the fastest-growing data center corridors in the country, with Google, Apple, and Microsoft either building or planning facilities near the Tahoe-Reno Industrial Center east of Reno.

According to Fortune, the Desert Research Institute found that 12 data center projects in Northern Nevada could drive 5,900 megawatts of new demand by 2033. Data centers already used 22% of Nevada’s electricity in 2024, and that share could rise to 35% by 2030. According to Sierra Club expert testimony filed with Nevada regulators, about 75% of major project load growth in NV Energy’s own 2024 resource plan comes from data centers.

The regulatory gap between California and Nevada is leaving Tahoe customers exposed

What makes this crisis especially hard to fix is that no single regulator oversees the entire chain from power generation to customer bills. Liberty is a California utility, and its rates are approved by the California Public Utilities Commission (CPUC). But Liberty’s grid sits inside NV Energy’s territory, connects to NV Energy at 38 points, and relies entirely on Nevada transmission lines.

Building a direct connection to California’s grid would require a new transmission line over the Sierra Nevada mountains. Liberty President Eric Schwarzrock said that would cost “hundreds of millions of dollars” and cause major land impacts. 

The CPUC can approve Liberty’s rates and procurement plans, but it cannot order NV Energy to keep selling wholesale power or control how Nevada plans for data centers – that authority belongs to the Federal Energy Regulatory Commission. This is not an isolated issue, either – communities near major water sources fighting data center expansion have raised similar concerns about infrastructure strain across the country.

In March 2026, Liberty asked the CPUC to approve an expedited process for finding replacement energy starting June 1, 2027. In that filing, Liberty said NV Energy cited data centers in the Tahoe-Reno area and transmission constraints as reasons for ending service. Community advocate Patrice Hughes and the Sierra Club’s Tahoe Area Group want the CPUC to reject that approach and instead open a full public proceeding.

“You need to open a full proceeding and do a transparent process and understand what we look like in California policy, and what the long-term game is,” Hughes said. She added that even regulators are still sorting through the legal limits: “They’re basically trying to decide what to do right now, or even what they legally can do.”

Rates were already rising before this supply crisis arrived. In its 2025 rate case, Liberty originally sought a 19.1% revenue increase – about $37.51 more per month for the average residential customer. The CPUC approved a smaller increase of 11.4%. 

Hughes argues that the deeper problem is how costs get distributed in a region where visitor demand, second homes, ski resorts, and development projects drive infrastructure needs that permanent residents end up paying for. Beyond electricity costs, experts have also warned about the enormous heat output data centers release into surrounding communities, adding another layer to the environmental concerns locals face.

“We’re the cost of being redistributed onto a declining community, and that is a crisis,” Hughes said. She noted that Tahoe is often treated as a wealthy vacation-home market, even though its year-round population includes low-income communities and essential workers.

“Even though we have low-income communities in both South Lake Tahoe and North Lake Tahoe, Kings Beach, both the Energy Commission and the California Public Utility Commission do not include us in any of their socioeconomic plans,” she said.

NV Energy is currently building Greenlink West, a $4.2 billion transmission line expected to come online in May 2027. Schwarzrock said Liberty would be “first in the waiting line” when Greenlink opens, giving it access to more energy providers, but that timeline lines up exactly with the contract deadline, leaving almost no room for error. 

Schwarzrock said Liberty plans to bid the replacement contract to “anybody and everybody,” focusing first on meeting California’s renewable energy rules. Hughes is not optimistic about the long-term picture. “Short term, you can commonly get good deals, but it’s unstable,” she said. “The short-term deal gets you through. But then you’re in the Western market, competing against PG&E, Southern California Edison, data centers, and mining companies. We’re 49,000 customers. We have no leverage.”