NV Energy sues Tract Capital over who funds massive AI data-center power upgrades

NV Energy, which supplies power to 90% of Nevada, sued Tract Capital Management over the financing of infrastructure needed for two new data-center sites near Reno. The projects are expected to draw over 2 gigawatts, about one-third of the utility's generating capacity, prompting concerns that costs could be passed to residential and small-business customers. NV Energy claims Tract is attempting to avoid its share of the $1 billion grid upgrades by pushing the matter into private arbitration, a move the utility says would limit public and regulator scrutiny.

Under Nevada law, large power users must obtain commission approval for such expansions, ensuring they fund their own upgrades rather than burden existing ratepayers. Tract argues the utility failed to plan for the promised power and has launched a public-relations campaign against data-centers. The case is the first of its kind, potentially setting a precedent for how utilities and data-center developers allocate infrastructure costs amid the AI-driven demand surge.