The energy provider is leaving Lake Tahoe residents to serve the data center

Lake Tahoe’s tourist town and ski resort must scramble to find a new energy supplier by May 2027—a result of a Nevada company that said it needs some power from new sources. The looming power crisis affects 49,000 Californians who live near Lake Tahoe, which is located in the Sierra Nevada Mountains on the California-Nevada border.

Lake Tahoe’s electricity provider, California-based Liberty Utilities, has been getting 75 percent of its power from Nevada-based NV Energy. But the latter will stop providing power to the Lake Tahoe area by May 2027, according to multiple reports. Chance.

The rapid growth of data centers in Nevada is one of the main reasons given by NV Energy for terminating its energy supply agreement with Liberty, according to Liberty’s explanation to California regulators. Fortune cited data from NV Energy’s planning documents that show a dozen projects in northern Nevada could generate 5,900 new megawatts by 2033.

This demand for data has also encouraged NV Energy to sign contracts with technology companies to secure additional energy sources. Amazon recently agreed to support the Nevada company’s deployment of 700 megawatts of “low-carbon energy” for its Reno data center projects, including 100 megawatts of geothermal energy, according to Data Center Dynamics Graphics.

However, representatives of NV Energy pushed back on the idea that the data center was responsible for the loss of power to the people of the Lake Tahoe area, telling Fortune that it was part of a long-term change before the AI ​​boom. After NV Energy sold its California assets to Liberty in 2009, it entered into temporary agreements to continue supplying power to Lake Tahoe until Liberty found another energy supplier.