Google’s $2 Billion Data Center Just Got A Custom Energy Deal

The agreement allows Google to shift power usage during peak periods, potentially reducing grid strain and lowering costs for other customers.

Google announced on Monday that it has partnered with American Electric Power’s (AEP) Indiana Michigan Power unit on a custom “Demand Response” agreement to manage electricity use at its upcoming $2 billion Fort Wayne data center. 

The contract was filed with Indiana regulators on July 30. The agreement allows Google to shift power usage during peak periods, potentially reducing grid strain and lowering costs for other customers by moving “non-urgent” tasks to hours when the grid is under less stress.

Shares of Google-parent Alphabet (GOOG/GOOGL) rose 2.3% in morning trade. However, retail sentiment around Alphabet’s stock on Stocktwits remained steady within ‘bearish’ territory over the past 24 hours. Meanwhile, AEP’s stock gained 1.25% in morning trade with retail sentiment moving higher within ‘extremely bullish’ territory over the past day. 

"As AI growth accelerates, we recognize the need to expand our demand response toolkit and develop capabilities specifically for machine learning workloads," said Amanda Peterson Corio, Global Head of Data Center Energy at Google. “Working closely with I&M to include load flexibility as part of the overall supply plan, we can support future power needs even where power generation and transmission are constrained.”

Google announced plans to build a $2 billion data center in Fort Wayne in April 2024. The project is expected to span over 700 acres and include 12 separate buildings. However, no deadline for the completion of the project has officially been set yet. 

Alphabet’s stock has gained 1.2% this year and 23% over the past 12 months. Meanwhile, AEP’s stock has gained 24% this year and 10% over the past 12 months. 

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