It's widely known that AI data centers are putting significant pressure on the electrical grid. However, Silicon Valley has largely avoided these issues, thanks to high land and energy costs that have pushed large-scale computing projects elsewhere. That may soon change for the tech elite. Lake Tahoe, the Bay Area’s premier vacation destination, now has less than a year to secure a new energy provider. By May 2027, Liberty Utilities’ agreement with NV Energy will expire. NV Energy plans to redirect its power to other parts of Nevada, where data center development is booming.

Both Liberty Utilities and NV Energy have stated that this wind-down was long anticipated. NV Energy has also denied that data centers are to blame. Still, it’s hard to ignore their role. NV Energy alone is fielding requests for over 22 gigawatts of load—more than 40 times Lake Tahoe’s peak usage, as a Bloomberg report highlights. If data centers weren’t in the picture, it’s likely that Liberty Utilities and NV Energy would simply renew their contract. But with data center operators willing to pay virtually any price for electricity, it was inevitable that traditional customers in Lake Tahoe would be left out in the cold.

The timing couldn’t be worse. Energy markets are currently harsh, squeezed by surging demand and tightened supplies, made even worse by the Trump administration’s decision to attack Iran. Lake Tahoe’s situation is compounded by the fact that its power lines are more connected to Nevada’s grid than California’s. This means the community must either find another provider within NV Energy’s territory or elsewhere in the West. Given that NV Energy has already prioritized data centers over this mountain town, it’s likely that Lake Tahoe residents—and second-home owners—will have to search for another regional power producer.

That won’t be easy either. In neighboring Utah, a county commission recently approved a 40,000-acre data center development that could consume up to 9 gigawatts of electricity when completed. For context, the entire state of Utah currently uses about 4 gigawatts. Demand at that scale is almost certain to drive prices up throughout the region. The combination of these factors means that Lake Tahoe will likely pay more for electricity next year than it does today. Locals will be hit hardest, but people who own second homes in the area—many from Silicon Valley—might also feel the pinch.

The injustice of the AI energy crunch is that those who suffer the most have had little say in the technology or its rollout. Lake Tahoe’s power predicament shows that this is starting to change, though probably not enough to make a real difference.