As a brutal winter storm hammers large swaths of the United States, federal officials are turning to an unlikely ally to keep the lights on: the very data centers that are driving record electricity demand. Instead of simply curtailing their usage, operators are being ordered to fire up their own backup generators and even feed spare capacity into stressed regional grids so homes and hospitals do not go dark.
The move marks a sharp escalation in how Washington treats digital infrastructure, recasting server farms from passive power hogs into active grid assets. It also exposes a deeper tension, as the same artificial intelligence boom that is supercharging data center growth is now colliding with the physical limits of an aging energy system.
The emergency orders that flipped data centers into grid assets
The pivot began earlier this year when The US government instructed grid operators to make backup power from data centers, manufacturing plants and other large facilities available ahead of a major winter storm affecting the US, effectively drafting private generators into public service. That directive, described in one order as coming from The US, told Electricity providers they should tap into available backup power used by manufacturing facilities, retail businesses and server farms before resorting to rolling outages, according to guidance that emphasized keeping residential customers online as temperatures plunged. In parallel, the Department of Energy issued emergency orders to deploy backup generation in the mid-Atlantic and neighboring regions, citing the need to stabilize power flows as demand surged.
Those steps built on a broader warning from The NERC 2025 – 2026 Winter Reliability Assessment, which flagged that areas across the continental United States face elevated risks of shortfalls during extreme cold. In response, the Energy Secretary used emergency authority to authorize additional backup generation between January 26 and January 30, a window that coincided with the worst of the storm and was explicitly framed as a way to minimize the risk of blackouts. The same assessment underscored that as more load from AI and cloud computing clusters onto the grid, operators will need flexible resources that can be dispatched quickly, a role that large data centers with on-site diesel or gas units are uniquely positioned to play.
Texas becomes a test bed for data center backup power
Nowhere has this experiment been more visible than in Texas, where the Department of Energy issued an emergency order allowing ERCOT to direct data centers and other large energy consumers to switch to their own generators to preserve the Texas energy grid. That order, highlighted by the Department of Energy as an energy emergency declared to keep the ERCOT grid stable, effectively turned backup systems that usually sit idle into a strategic reserve. A separate federal action explicitly permitted ERCOT to utilize data center back up generators during the Texas storm, with a spokesperson, Trudi Webster, stressing that at that time ERCOT did not anticipate any reliability issues on the statewide electric grid but wanted the authority in place through Tuesday (27 January) in case conditions worsened.
On the ground, operators responded. Reporting on Texas Data Centers, Crypto Miners Reduced Power Use During Storm detailed how large computing facilities and mining operations cut their grid draw and leaned on their own equipment, helping to ease strain as temperatures dropped. One account of Texas Data Centers, Crypto Miners Reduced Power Use During Storm noted that at least 35 facilities participated in some form of demand reduction or backup generation, a scale that hints at how much latent capacity is sitting behind the walls of server farms. The episode also showed how quickly policy can shift: an earlier directive made clear that ERCOT can use backup power from data centers to help the Texas grid in a winter storm, with the Trump administration orders giving the grid operator legal cover to call on those resources when needed.
Mid-Atlantic and Carolinas brace as AI demand collides with cold
While Texas grabbed headlines, the same storm system exposed vulnerabilities in the Carolinas and the mid-Atlantic, home to some of the country’s densest clusters of AI and cloud infrastructure. The Energy Department said Friday it extended emergency orders for PJM and Duke Energy to help stabilize the grid in the Carolinas and the Atlantic region, explicitly allowing utilities to utilize backup generation resources that would normally sit on the sidelines. A separate directive from the Energy Secretary issues emergency orders to deploy backup generation mid-Atlantic and nearby systems, again leaning on industrial and data center assets to cover peak demand as temperatures stayed below freezing.
Those decisions came as power prices surged around key hubs, including the corridor often dubbed “data center alley,” where electricity costs spiked in part due to data center electricity needs. One analysis of power prices surge data centers storm described how wholesale rates jumped as operators scrambled to secure enough supply to feed both households and racks of AI servers. Another report on the winter storm tested power grids straining to accommodate AI data centers noted that the regions with the most data centers saw some of the sharpest price swings, a sign that the digital economy’s hunger for power is now a central factor in how storms play out on the grid.
Households first: why Washington is leaning on server farms
Behind the flurry of emergency orders is a simple political and economic calculus: when the system is under stress, regulators want data centers to shoulder more of the burden so that homes and critical services are protected. One federal directive framed it bluntly, with The Energy Department telling PJM and Duke Energy that backup generation resources should be used to keep residential customers online before curtailing essential services. Another guidance from the Trump administration taps data centers for backup power ahead of snowstorm made clear that Electricity providers were told they should tap into available backup power used by large commercial customers, including server farms, rather than cutting off neighborhoods.
The stakes are significant. In a separate order focused on Texas, the Energy Secretary issues emergency order secure Texas grid amid winter storm Fern, noting that Power outages cost the American people $44 billion per year, a figure drawn from DOE National Laboratories that underscores how even short disruptions ripple through the economy. That same document repeated that outages cost $44 billion annually, a reminder that the cost of running backup generators for a few days is trivial compared with the damage from widespread blackouts. As another analysis of Energy Department tells data centers to use backup power as storm threatens homes put it, the immediate priority is keeping households warm and hospitals powered, even if that means asking the AI sector to absorb higher operating costs during extreme weather.
A stress test for an AI-driven grid future
For all the focus on the current storm, the deeper story is how AI is reshaping the grid’s long term trajectory. A report on AI data centers hit by winter storms surge electricity costs to new highs argued that Beyond the Storm This crisis signals deeper infrastructure challenges as AI training demand accelerates nationwide, with Natural gas prices and transmission bottlenecks compounding the problem. Another assessment of Challenges Ahead for the sector warned that forecasters expect freezing conditions to persist into next week and beyond, raising the prospect that emergency orders could become a recurring feature of winter operations rather than a rare exception.
More from Morning Overview