In a first-of-its-kind fight over the public impact of data centers, Nevada's NV Energy has sued data center developer Tract over two planned campuses near Reno.

The utility, which powers most of the state, is accusing the company of trying to pass costs onto consumers. The two planned data centers would together draw more than 2 gigawatts of power, nearly a third of the utility’s generating capacity.

The case marks the first time that a major utility company has sued a data center developer, according to a CBS news report. This lawsuit could influence who must pay for the costs of building infrastructure needed to power AI data centers.

NV Energy argues that Tract is calling for private arbitration to circumvent public scrutiny over how much power Tract will be able to draw and who will pay for the massive infrastructure investments required.

According to NV Energy, these issues can only be legally decided by the state regulator because its decisions will affect every ratepayer.

Tract asserts that NV Energy is refusing to deliver power it had promised to provide, while still demanding that Tract go ahead with $1 billion in grid upgrades.