America’s electric cooperatives are escalating a fight over how the US should build power for an economy increasingly shaped by data centers, manufacturing and other electricity-intensive industries. Leaders representing some of the country’s largest cooperative generation systems are pressing the Environmental Protection Agency to repeal greenhouse-gas requirements that they say limit how new natural-gas generation can be operated and planned. Their argument reaches beyond environmental regulation because the rule affects long-term resource planning at a time when cooperatives are preparing for rising electricity demand from data centers and other large users. The National Rural Electric Cooperative Association and major generation-and-transmission cooperatives argue that natural gas remains a practical source of firm generation as utilities respond to rapidly growing electricity demand, including demand from data centers.

The pressure reflects a fundamental mismatch between how the power system historically planned generation and how AI infrastructure now consumes electricity. Utilities have historically planned generation around forecasts of customer demand, while the recent growth of very large data-center loads has added new large-load requirements to those planning decisions. Large data centers can instead introduce electricity requirements measured in hundreds of megawatts, with some projects discussed by utilities reaching approximately 1,000 megawatts. The 2024 EPA rule established different requirements for new natural-gas plants depending on how extensively those facilities would operate, making expected capacity factor a crucial planning variable. Under the rule, new natural-gas combustion turbines are subject to different emissions requirements based on their operating characteristics, with the 2032 standard for new base-load turbines tied to emissions performance equivalent to 90% carbon capture.

Why the 40% Threshold Matters

The 40% threshold has become a focal point for cooperative executives because they say it could limit how frequently new gas-fired plants operate unless they meet the rule’s applicable emissions requirements. Cooperative planners must consider whether a proposed facility can run frequently enough to justify its capital cost while still meeting environmental requirements that may require technologies they consider commercially immature. Jim Matheson, chief executive officer of the National Rural Electric Cooperative Association, called both the 40% threshold and the carbon-capture requirement “untenable.” Matheson also said his organization supports the Trump administration’s effort to repeal the rule completely and described the regulation as “a significant threat to our ability to do our job.” He has argued that natural gas remains “the go-to for new generation in this country” as electricity consumption accelerates. 

A large computing campus needs predictable electricity across the entire operating cycle, and its economics can deteriorate quickly when a utility cannot guarantee sufficient firm supply. That makes the choice of generation technology part of the data-center development strategy rather than a back-office utility decision. Wind and solar can provide substantial amounts of electricity, but their output varies with weather and time, requiring grid operators to manage periods when generation does not match demand. Todd Brickhouse, CEO and general manager of Basin Electric Power Cooperative, said renewables account for 30% of Basin’s generation portfolio but argued that data centers’ “very high load factor” complicates a renewable-heavy approach backed by diesel generation. He said a 1,000-megawatt data center could consume close to 900 MW or 1,000 MW continuously and argued that a combined-cycle facility can better match that requirement. 

Co-Ops See Reliability Risk in the Rule

The cooperative argument is that the rule’s requirements could restrict the operation of new gas plants at a time when co-ops are preparing for rising electricity demand. It is that the timing and structure of those restrictions could narrow the set of generation resources available precisely when power systems need more dependable capacity. Annalisa Bloodworth, president and CEO of Oglethorpe Power Corp., called the regulation “deeply flawed” and “genuinely … the most irrational environmental regulation I’ve personally encountered in my career.” Bloodworth said a full repeal was “what we need to be able to plan and to invest with confidence.” Her position reflects the broader concern that utilities cannot make multibillion-dollar generation decisions if federal requirements could materially alter the economics of a plant before it reaches commercial operation. That uncertainty becomes more consequential when utilities must commit generation years ahead of the load that ultimately pays for it. 

The scale of the cooperative system involved gives the dispute additional weight. David Tudor, CEO and general manager of Associated Electric Cooperative, said the systems represented by his cooperative, Basin Electric and Oglethorpe account for “about 60% of the cooperative family across the United States.” That reach means the debate touches a significant portion of the member-owned power sector rather than a handful of isolated utilities. Cooperative generation and transmission organizations often sit between local distribution cooperatives and large generating assets, making their procurement decisions important to regional reliability and wholesale power costs. Their executives therefore view the regulation through a long-duration infrastructure lens, where a generation project can shape rates and system performance for decades. The issue becomes especially significant when large technology customers seek firm capacity in regions that previously experienced relatively modest load growth.

EPA Repeal Would Change Investment Calculus

The federal government has moved toward a broader reconsideration of power-sector greenhouse-gas regulation, with EPA proposing in June 2025 to repeal greenhouse-gas standards for fossil-fuel-fired power plants. On June 11, 2025, EPA Administrator Lee Zeldin proposed repealing greenhouse-gas emissions standards for fossil-fuel-fired power plants under Section 111 of the Clean Air Act. EPA said the proposal would remove what it considers unnecessary regulatory burdens and estimated up to $19 billion in regulatory costs savings over roughly two decades beginning in 2026. The agency also offered an alternative approach that would remove some of the most burdensome requirements, including carbon-capture-based standards for certain new combustion turbines. 

The regulatory process has not moved at the speed the cooperative sector wants. EPA sent its proposed Carbon Pollution Standards Repeal to the Office of Management and Budget in May 2026, according to Utility Dive, and the 90-day review period expired in August without OMB taking action. That leaves utilities and developers watching Washington while they make decisions that often require years of lead time. Matheson said he does not believe the existing rule can be revised “in a way that makes sense,” while acknowledging that he lacks “insight on what goes on behind closed doors.” He also made clear that the cooperative sector wants movement rather than another prolonged period of uncertainty. “We are anxious to see action on this,” Matheson said.

The Bigger Fight Is Over Long-Term Grid Strategy

The EPA gas rule debate has become part of a broader argument over how America should expand electricity infrastructure as demand from data centers and other large loads rises. Cooperative executives see natural gas as a practical bridge between today’s grid and an economy demanding substantially more firm power, particularly as AI data centers accelerate demand growth. Critics of fossil-fuel expansion argue that the investment cycle could lock in carbon-intensive infrastructure at a time when utilities are also pursuing lower-emissions resources. The debate comes as utilities face mounting pressure to add electricity supply for data centers and other large loads.

Ultimately, the regulatory decision will matter far beyond the power plants directly covered by the rule. If EPA completes the repeal, cooperatives could gain greater freedom to pursue gas-fired generation for fast-growing loads and could face fewer federal constraints when structuring long-term capacity plans. If the existing framework survives, utilities may have to place greater emphasis on renewable generation, storage, transmission expansion, demand flexibility and emerging firm-power technologies when responding to data-center proposals. Neither outcome eliminates the underlying infrastructure problem created by rapidly rising electricity demand. It simply determines which technologies utilities can deploy, how quickly they can deploy them and which costs or environmental risks the system carries into the next decade.