Data Centers Could Leave Lake Tahoe Residents With Fewer Options And Higher Costs In 2027

California is already one of the states with the most expensive utility bills in the country, but recent developments could complicate this even further for Lake Tahoe residents. Specifically, NV Energy, a Nevada-based company that, per Fortune, supplies around 75% of the Lake Tahoe region's energy, intends to terminate its contract with Liberty Utilities — the main utility supplier in the area — in May 2027. Even though NV Energy claims this decision was a long time coming, artificial intelligence (AI) data centers are expanding in the area — with EV Energy largely planning on redirecting its resources to powering them instead. 

Liberty is a major electricity provider in the area, with the Tahoe Basin's remote location making it difficult, and expensive, to establish new infrastructure for alternative suppliers. As if prospective residents or retirees needed another reason to regret moving to California, there are already dozens of active data centers within relatively close proximity to Lake Tahoe. In fact, as early as 2024, data centers were already using 22% of Tahoe's electricity. However, despite the fact these existing centers are already impacting local finances, several major tech companies are continuing to expand into the area.

Notably, a NV Energy spokesperson told Ars Technica that "there is no scenario where Liberty customers will be left without service as a result of this transition." However, a lack of power isn't everyone's main concern — utility costs are. Per PayScale, utilities in Lake Tahoe already cost 63% more than the national average — averaging around $359 per month. Meanwhile, a 2025 report from Bloomberg found that, since 2020, proximity to data centers increased average utility bills by 267%. 

According to the Energy Information Administration, energy bills across the country increased by over 7% from February 2025 to February 2026. However, that's not even close to the surge some Tahoe residents are feeling. A Tahoe restaurant owner reported to the Insurance Journal that his monthly bills from Liberty increased nearly threefold, forcing him and many of his neighbors to raise prices to stay afloat. Another small business owner reported he was billed over $1,500 for a single month of service.

Unfortunately, there isn't much light at the end of the tunnel for Lake Tahoe residents. This is largely because much of the issue has to do with bureaucratic complications. For instance, Lake Tahoe and its grid are in California, but the area's heavy reliance on a Nevada-based company prevents California lawmakers from intervening with NV Energy's decision to cut services. Meanwhile, other forces — including California's attempts to combat wildfires in recent years — are further driving up local expenses. Moreover, this development coincides with the war in Iran, which is causing fuel prices to skyrocket. This means that even those in the Tahoe area that rely primarily on oil for their energy or heat aren't being spared from rising prices.