This month, Liberty Utilities learned it has less than a year to find a new electricity source for 49,000 residents it serves in Lake Tahoe, Nevada. The company buys 75% of its power from NV Energy, which recently chose to divert its power to serving newly built data centers in the area. A good deal of blame has been heaped on those facilities for putting the local utility in such a bind. But in the case of Lake Tahoe, it’s not data centers that are failing the local community, it’s our centralized power system — one that businesses and residents no longer need to fully rely on.
Across the country, utilities and grid operators are wrestling with a growing appetite for electricity inside a system that is underprepared and undersourced, operating under the assumption that more centralized infrastructure is the answer. The challenges Tahoe faces are more extreme than those of less isolated areas, but at the core, every region is facing the constraints of a centralized grid that wasn't designed for modern energy demands.
Most of our transmission and distribution infrastructure was built for a 20th-century economy: electric lights, traditional manufacturing, and residential heating and cooling. This equipment is now aging at exactly the time when energy demand is heating up. In Lake Tahoe, the two major transmission lines serving the North Shore are among the oldest electric lines in California; the need to upgrade them was identified as far back as the 1980s. The rest of the country is no better off: Overall, the American Society of Civil Engineers gives the U.S. electrical grid a D+ rating.
This system served us in an era when there was predictable load growth measured in low single digits per year. But data centers — along with electrification and the reshoring of manufacturing industries — has supercharged that growth and accelerated the need to reshape our grid. Investor-owned utilities are planning $1.4 trillion in capital spending over the next five years in an effort to catch up. Even if every dollar gets spent on time and on budget, the new infrastructure will arrive years after the demand. In the meantime, the system absorbs the stress by raising rates, lengthening interconnection queues, and making choices like the one made for Lake Tahoe.
Liberty's situation is instructive in another way, too: It shows what happens when onsite energy — solar, storage, and other distributed energy resources — is treated as a side program by utilities instead of a strategic priority.
Liberty has not ignored local and regional clean energy. It offers net metering, runs a Solar Incentive Program (SIP), and has two utility-scale solar facilities in Nevada that together supply a meaningful share of its annual customer energy needs. But the scale tells the real story.
The SIP was authorized at $420,000 annually and is currently focused on underserved communities, affordable housing, entities serving low-income residents, food banks, shelters, and Title 1 public schools. That is good policy.
However, this SIP is not a scalable distributed energy strategy for the full customer base. Residential customers are told plainly that Liberty does not offer incentives or rebates for home solar arrays and doesn’t explicitly mention programs for businesses. And until very recently, Liberty was still operating with an aging metering fleet, much of it manually read, with meters averaging roughly 30 years old.
That matters because you cannot manage what you cannot see. A grid trying to integrate more customer-sited generation, flexible load, storage, and real-time energy decisions needs better visibility than monthly manual reads.
So the issue is not that Liberty did nothing, the issue is that the tools, incentives, and infrastructure were not built for the distributed energy reality that is now arriving fast.
Had Liberty, and all of its utility peers, spent the last decade actively building local generation capacity and supporting commercial and residential customers to generate and store their own power, its exposure to the NV Energy arrangement would look different today. Not eliminated, but meaningfully reduced.
Every kilowatt-hour produced locally does not need to cross the Nevada desert. Every business or building with storage is a node that stays lit during public safety power shutoff events, which are going to increase in frequency and duration as wildfire risks rise. Every distributed asset on the grid is a capacity that the utility doesn't have to procure, transmit, or defend in a rate case.
The utility didn't create the dependency on NV Energy; that's a structural inheritance. But the distributed alternative existed, the economics were real and the need was visible. It just wasn't the priority, particularly due to the guaranteed rate of return commercial structure, where utilities are guaranteed a rate of return on every dollar spent. This incentivizes building high-cost infrastructure.
That gap between what was available and what was built is the same gap facing utilities and businesses across the country. And unlike a transmission line over the Sierra, closing it doesn't require hundreds of millions of dollars or an act of federal regulators. It requires a decision.
What is striking, and underreported, is who has already started solving for this. The same data centers driving load growth are now moving toward bringing their own power at a surprisingly quick pace. According to a February 2026 Cleanview report, 59 announced U.S. data center projects are planning onsite generation totaling 90 gigawatts. That is roughly five times the peak demand of New York City. A year ago, the equivalent number was effectively zero.
Onsite power now accounts for roughly 30% of all planned U.S. data center capacity. Bloom Energy's 2026 operator survey indicates 44% of data center operators expect to be locally powered by 2035. Apple already runs its U.S. data centers in four states entirely on local renewables. Crusoe and Redwood Materials are operating a solar-plus-second-life-EV-battery installation in Nevada at 99.2% uptime over eight months, and are expanding the site sevenfold.
The economics support it. The levelized cost of solar and battery storage now competes with Liberty's rates — a fact that is true for utilities around 13 states, based on an analysis of U.S. Energy Information Administration data. On the current trajectory of utility rate increases, that figure reaches 100% of states and utilities by 2035. Onsite solar, battery storage, fuel cells, gas generation where appropriate, and intelligent controls integrated together are no longer a sustainability gesture or a luxury hedge. They are increasingly the cheapest, most reliable, and most predictable source of power for businesses of meaningful scale.
This matters for two reasons beyond cost.
The first is risk. The Lake Tahoe story is what happens when a customer has no leverage and no alternative, when they depend entirely on utility power. This is passive and outsourced consumption. When you cannot generate a meaningful portion of your own power, every decision about your energy is made by someone else, with their interests in mind, not yours.
Generating and storing even a meaningful minority of your own energy transforms that relationship. You stop being a passive consumer on someone else's planning map and become an active participant with options.
The second is grid relief. Every megawatt of load that comes off the grid is a megawatt freed up for loads that have to stay on it. The utility doesn't need to build new transmission, generation, or substations to serve that load, because the customer has already solved their portion of the problem. The shift to onsite and local generation isn't about disconnecting from the grid, it's about designing systems that make the grid smarter, acknowledging the constraints of the existing model, developing the infrastructure for the next century versus taping up that of the last century, and creating commercial models that align incentives
Communities and businesses are not powerless in this moment. Generate and store some or all of your energy locally. Take advantage of the built environment, like rooftops and car parks. Expand solutions as traditional utility rates continue to rise, the cost of onsite energy systems fall, as reliability becomes more critical, and as the grid becomes less able to deliver on its end of the bargain.
That is the path for anyone who does not want to find themselves in Lake Tahoe's position.
Gareth Evans is the CEO and Founder of VECKTA, the platform and marketplace that empowers businesses to take control of their energy future by planning and buying onsite energy systems. Gareth is committed to empowering businesses and communities to transition towards a more affordable, secure, and renewable energy future.
