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Data centers have hiked electricity prices on the public by $23B

197 points by measurablefunc 3mo ago

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m-hodges 3mo ago
> But what if the power company needs to upgrade the substation to handle the increased needs of the data center? Or secure additional sources of electricity? In these cases, the investments are part of the electricity grid that everyone uses. These costs will likely be shared among all customers. Okay but this is a policy choice. It doesn’t have to be that way.
- FireBeyond 3mo ago
  Exactly. Over in Virginia 37 datacenters use close to 3GW of electricity. The power utilities and overarching transmitters are looking at projects to ship some of that electricity (which requires ~700kV transmission). Two projects in the works are at $18B between them. $18B to provide redundancy and not have to require schools and local government to limit electricity use and provide a bit more slack in the powergrid is a burden that all the users get to share. Lucky them. Yes, all users benefit, but lucky break for those datacenters, getting all that redundancy for power, without a $500M/ea bill.
  - jauntywundrkind 3mo ago
    That's great to hear that we have at least somewhat decent voltages. I thought America was still sort of piddling around with mostly 500kV and under power distribution. It's not a huge power multiplier (P = VI, so linear), but in principle I do love the idea that if you are going to have these massive transmissions lines we ought use the conductor well, at good high voltages. China has been doing 1MV and 1.1MV lines for a while now, which is so excellent to see. https://www.bbc.co.uk/future/article/20241113-will-chinas-ultra-high-voltage-grid-pay-off-for-renewable-power https://www.bbc.co.uk/future/article/20241113-will-chinas-ul... https://en.wikipedia.org/wiki/Ultra-high-voltage_electricity_transmission_in_China https://en.wikipedia.org/wiki/Ultra-high-voltage_electricity...
- echelon 3mo ago
  Build more power!
- ihsw 3mo ago
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- russellthehippo 3mo ago
  Precisely this. Incredibly annoying headline
  - strictnein 3mo ago
    It doesn't even match what's in the article. > "concluded that expected power demand from data centers was _a_ primary reason for $23 billion in customer price increases " Also, it's weird that he describes PJM as "the organization that monitors the PJM market" when they describe themselves as "a regional transmission organization (RTO) that coordinates the movement of wholesale electricity" [0]. So are they monitors of the market or are they the market themselves? I don't know... maybe I'm being picky, but the article just seems off. The whole bit about how data centers could maybe game the system by using less power during peak times also doesn't make sense - that's when they also have the highest demand. Pointing to cryptominers just makes me think he doesn't get what they do, which is basically arbitrage. Of course they stop when power costs go up, it eats up all of their profits and they can simply start back up when the costs go down. [0] https://www.pjm.com/about-pjm https://www.pjm.com/about-pjm
    - TurdF3rguson 3mo ago
      Right, you can't point to a year where price increases didn't happen, so "a primary reason" becomes meaningless. It was going to happen for other reasons if it didn't happen for this one.
      - butvacuum 3mo ago
        by my research, everything has scaled almost linearly with population. But- there was a huge, undeniable, dip in cost of a kw/h of power when lighting started focusing on CFLs and LEDs. Grid expansion stalled, and now people are upset since it started growing again
        phil21 3mo ago
        Doesn’t the rollout of more efficient lighting also coincide with the shale gas boom? This also happened at right around the time coal plants were starting to be retired for good as well, which short-circuited some expected generation cost increases. You also had the de-industrialization of the US happening at the same time, which also took pressure off the transmission grid. We basically had a few things offset population growth to allow us to use our grandparents electric grid investments for far beyond their expected lifetime. We’ve finally just caught up after a free ride over the past 4-5 decades. I overall agree with you strongly, just surprised that more efficient lighting would have that much impact on grid demand.
- SoftTalker 3mo ago
  Where I live, if a developer wants to build a subdivision, they pay for the water and sewer lines. They pay to connect those lines to the city infrastructure. If the city infrastructure needs to be upgraded to handle the new volumes, they pay for at least a proportionate share of that too. The ongoing maintenance becomes part of the city's budget eventually, but not the costs of the build out. All those costs go into the price of the houses built there. And this is also part of why building "affordable" houses rarely happens. All the infrastructure costs the same whether the houses cost $100K or $1 million.
  - silisili 3mo ago
    That's smart. Do they do it with roads also? That's a big one near me - developers buying hundred acre farms on unpainted 2 lane country roads and jamming in 2000 houses. Then inevitably the road becomes unusable until the city or county gets around to addressing it. Always wondered why the county didn't require the road work, or money for it, up front.
    - mulmen 3mo ago
      In my hometown in Idaho in the 1990s and 2000s yes, this includes access roads and improvements to the surrounding area. A car dealership and Wal Mart both paid for road improvements and traffic lights as part of development.
      - SOLAR_FIELDS 3mo ago
        The developer gets to at least name the roads. I worked for a city, the developers would submit names and while the city had the final call 99% of the time they would just accept whatever the developer submitted. The only times that I saw it get denied were times where it would create confusion like a similarly named road already existed or it could be construed as something profane
    - bityard 3mo ago
      That's negligence on the part of the county/township. Around here, every new development is required to pay for the traffic and utilities improvements that will be required once the thing is built. (And all the engineering that goes into figuring out the impact in the first place.)
- deleted 3mo ago
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- pooploop64 3mo ago
  Still waiting for canadian cell phone bills to come down after all those "upgrades" that supposedly happened.
- duped 3mo ago
  I'm really tired of reading comments like this"this is a policy choice" when these companies are straight up bribing politicians or exploiting their conflicts of interest to make this their policy. The public doesn't have a choice when all our leaders are bought and paid for by oligarchs and their businesses.
  - abduhl 3mo ago
    Comments like this are even more tiring. Everyone knows that there are moneyed interests in politics. But decisions on these issues are made at a local level and so are the most addressable by local political actions.
    - TurdF3rguson 3mo ago
      So what? You're saying local officials can't be corrupted by campaign donations? Because that's a hot take.
      - abduhl 3mo ago
        I’m saying local officials are the ones where your vote counts the most.
        TurdF3rguson 3mo ago
        Sure but the corruption money offsets informed votes against with campaign spend. The economics of expecting to vote them out doesn't work. Plus it feels like one party is getting flexible when it comes to corruption in their leaders. It's not as disqualifying as it was 15 years ago.
    - duped 3mo ago
      In my area there is quite a lot of mobilized anti-data center action that is completely ineffective. There is no legal way to remove corrupt local politicians from office that prevents the harm from being done. And I mean this as in, local government ostensibly representing the community are also the land owners and contractors selling to developers, who can't be voted out of office until next year at the earliest and whose contracts and permits can't be revoked by a subsequent administration. How exactly are you supposed to stop that?
- daedrdev 3mo ago
  In the US this isn't even true. The costs of grid upgrades are paid new capacity up front, which actually means there is a queue for grid connections twice the US total production, with no costs to ongoing customers.
  - lokar 3mo ago
    It varies by jurisdiction in the US.
  - mukbangpervert 3mo ago
    Your post is largely false, and quite confused. Grid upgrade costs are frequently socialized onto existing customers, especially for larger upgrades. Your central premise that interconnect charges cover everything is false.
- claw-el 3mo ago
  Yes, an alternative policy could be, the same unit price for electricity, and the additional cost is covered by increased usage (at the same unit price). The entity making the decision for the increased investment (the utilities company) will take the risk and rewards that comes with the investment. But, if it turns out to be a reward, people will revolt that for-profit company is making excess profit from something as basic as utilities.
erelong 3mo ago
"small price to pay for Massive AI Gains"
- BLKNSLVR 3mo ago
  FYI to others: the above is not a quote from the article.
bdangubic 3mo ago
according to my wife we paid about 1/2 of that :)
- claaams 3mo ago
  ah, welcome fellow PG&E user
ddp26 3mo ago
Isn't this the same as saying "utility regulators delaying connecting new power to the grid hiked electricity prices on the public by $23B?" When my apples are expensive, I don't generally grumble about all the demand from pie makers. If they demand more apples, new suppliers should come in to restore the price, right?
- deleted 3mo ago
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- abduhl 3mo ago
  Do you need apples to turn on your lights? Was there a sudden new influx of pie makers? Is growing apples a government granted monopoly business? If the answer to these questions was yes, yes, and yes then I think you would grumble.
russellthehippo 3mo ago
Failures to allow faster generation/hookup rollout have suppressed supply increase relative to demand increase
gruez 3mo ago
Isn't almost all of the datacenter build out for inference, rather than training? If so, what's the issue? If the electricity demand is coming from actual use, then why are people getting mad at datacenters or AI companies, rather than the actual people driving the demand? It's like getting mad at Amazon for how much they increased fuel prices, which they surely did, given all the fuel that their trucks/planes burn. Or getting mad at some global food conglomerate for making açaí berries[1] more expensive, but there's a global craze for them and the conglomerate is just catering to that demand. [1] or whatever other "superfood" that explodes in popularity
- derektank 3mo ago
  The electricity supply is probably a lot less elastic than the gas and oil supply at this point. Also, there’s no global price of electricity like there (more or less) is for oil. Residents suffer a localized cost when a large electricity consumer moves in, and they benefit when they can force the consumer to move to another locality. Definitely NIMBYism, but the reaction is understandable. It’s really just a question of saliency.
- jamescrowley 3mo ago
  Or getting mad at oil & gas companies? They’re only supplying the fossil drugs we demand. And using their billions in profits to lobby at every level of government and society to ensure they can continue despite the scientific evidence of harm that they’ve known since the 70s? Not at all like that. https://www.investigate-europe.eu/posts/big-tech-data-centres-secrecy-eu-law-environment-footprint https://www.investigate-europe.eu/posts/big-tech-data-centre... https://www.politico.eu/article/europe-choose-ai-climate-goals-data-center-chief-warns/ https://www.politico.eu/article/europe-choose-ai-climate-goa...
- hereme888 3mo ago
  Bruh.... I've climbed those acai trees with locals in Brazil, and when I saw the thickness and richness of real, purely ground acai, and the dilute garbage (cough sambazon cough) they sell in the US, and mentioned how much it costs in the US.... the guy froze and thought he misheard me. A local friend turned and warned me "don't tell them that, because it'll create frustration and anger he can't do anything about." They just run to the local store after manually grinding it in their machines, and get peanuts for a bag that would sell for >$100 in the US.
seanmcdirmid 3mo ago
Isn't this the classic overcapacity leads to lower prices that also represses investments that would increase capacity. But those lower prices also stimulate new demand that lead to higher prices...which then motivate investments that increase capacity? Perhaps I'm just spoiled because I live in the PNW, where are best use for overcapacity was to ship power off to California. But in the past, cheap hydro attracted aluminum production that then attracted also attracted a whole airplane production industry. I think most people are just debating whether the extra demand generated by AI is worth it, they weren't necessarily debating the same thing when it came aluminum or airplane production (albeit in the 1930s).
bpodgursky 3mo ago
Every tech company building out datacenters would pay in a heartbeat to add commensurate power to the grid. The cost is not an objection. The problem is, there are insane and dumb regulatory barriers to adding power plants or interconnects. THESE ARE THE SAME PROBLEMS FACTORIES FACE WHEN RESHORING PRODUCTION, you should treat datacenters as the face of reindustrialization. Instead of complaining about using resources, we need to focus on solving our inability to provide infrastructure needed to support economic growth.
- Hnrobert42 3mo ago
  > Every tech company building out datacenters would pay in a heartbeat to add commensurate power to the grid. The cost is not an objection. Yeah. I'm going to need a source on this claim.
  - bpodgursky 3mo ago
    Elon (in)famously put gas turbines on pickup trucks to power the Colossus 1/2 datacenters because connecting to the grid was incredibly slow and there was limited supply. And got sued to remove them. Absent regulation, every operator would happily do the same thing to make the problem go away.
  - phil21 3mo ago
    The fact datacenters are standing up extremely expensive on-site natural gas turbines due to the immense delays for interconnect. Pretty much no facility operator wants to also pay for and operate their own power plant. They are small and expensive to operate compared to combined cycle natural gas or other sources, and lack of access to a wider grid means even more additional expenses like a additional on-site redundancy. If they could simply pay for grid interconnect that is ready by the time facility construction is completed they would do so, in the vast majority of cases. The money is in getting things online ASAP. Builders are effectively throwing unlimited buckets of money at all aspects of these builds at people who can get shit done fast. Power interconnect would be no exception. I think folks have become numb to these huge numbers being thrown around in terms of how large this investment cycle/bubble is. Those numbers mean real things - like operators writing basically blank checks to jump the queue on networking equipment, wiring harnesses, etc. Those in the industry who are not these giant hyperscalers are kind of shut out of everything from cabling, network gear, HVAC, optics, etc. For any price - since our volumes are a joke compared to these huge contracts. There is a reason you see unprecedented margins for every company selling critical parts and equipment for these builds. Heck, standard power cables have gone up about 8x in cost on us in the past 12mo. It’s been crazy to watch and hear from suppliers how they give insane quotes to these companies which get approved same-day. It’s all a giant race, cost is currently not a primary concern if money can be used to speed anything up.
ChrisArchitect 3mo ago
https://archive.ph/Ypq0o https://archive.ph/Ypq0o
ChrisArchitect 3mo ago
Maybe what they're doing in Oregon with POWER Act hikes on data centers is the way: Oregon approves PGE’s 29.7% rate hike for data centers under landmark law https://www.opb.org/article/2026/07/07/oregon-data-center-general-electric-rate-hikes/ https://www.opb.org/article/2026/07/07/oregon-data-center-ge...
anubistheta 3mo ago
It's important to ground the increase in raw numbers. The total revenue for electricity generation was $514b in 2024. So this was a 4-5% increase in costs. And if it is being invested in better generation and our aging infrastructure, that seems fine.
- deleted 3mo ago
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- NewsaHackO 3mo ago
  The fact they gave a raw number instead of a percent of a quantity that is a change hinted that this was the case. $23B is more impressive than 4%.
  - mrcode007 3mo ago
    Imagine a mortgage rate raising by 4%. Still unimpressive ?
    - tqi 3mo ago
      Mortgage rates have gone up 8% just since February. https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US
    - deleted 3mo ago
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    - NewsaHackO 3mo ago
      It's funny that you don't realize you are doing the same thing; you are giving the absolute change like the article is doing; you are just doing the change in the rate instead of the underlying quantity. A 4% change in my rate if the original rate is 4% would be a 100% rate rate change, which of course is substantial.
    - ahtihn 3mo ago
      So the rate goes from say 4% to 4.16%? That's still unimpressive. If you mean from 4% to 8%, then that's actually raising by 100%
pyaamb 3mo ago
Data centers should at the very least build their own renewable energy generation. It would set the right incentives in place and encourage investment in clean energy generation solutions. It would also present a very compelling problem to direct all that new AI compute towards solving.
- rodonn 3mo ago
  The challenge is timing. Power is a relatively low share of the cost of a modern data center, but the length of time it takes for approvals and construction for solar means it would substantially slow down the construction vs. using grid+natural gas turbines which are faster to build and get approval for. I'm 100% on board with charging data centers more for their power usage. They can afford to pay the extra costs. They would much rather pay in dollars vs. in time.
- CrimsonRain 3mo ago
  Why not all factories? And hospitals? Schools? Offices?
MaxHoppersGhost 3mo ago
What is the increase in jobs/GDP for those communities that have paid more in electricity? A lot of these data centers are built in places with declining population and zero economic prospects for locals within their communities so they're a huge boon.
- bakies 3mo ago
  None? There's like 12 jobs per datacenter and the revenue goes to the Valley, mostly. The utilities get some profit but I doubt that money stays very local either.
  - derektank 3mo ago
    Data centers pay taxes don’t they? That money presumably goes into funding government services which would necessarily raise the local GDP
    - bell-cot 3mo ago
      Only if the data center's task force of influencers, lobbyists, and arm-twisters are incompetent. https://en.wikipedia.org/wiki/Tax_abatement https://en.wikipedia.org/wiki/Tax_abatement (Yes, in general, they'll pay some tax. Some. But they also add a wide variety of direct and indirect expenses, both fiscal and social.)
  - MaxHoppersGhost 3mo ago
    Places I know that are getting them are generally seeing big time pay (relatively that is) for construction work and then dozens to a hundred of ongoing jobs once the work is done. That doesn't sound like much but it's huge for many of these communities.
jbellis 3mo ago
This just isn't true. On balance, data centers are turning out to be more like the "anchor tenant" of the power grid, financing improvements for everyone. Overview article with links to actual studies: https://cityjournal.substack.com/p/data-centers-arent-raising-your-power https://cityjournal.substack.com/p/data-centers-arent-raisin...
- ZeroGravitas 3mo ago
  If the climate change denying and anti renewables Manhattan Institute is running propaganda for something that is strong evidence that the ordinary person is being conned.
kmod 3mo ago
This $23B number that gets thrown around is not the increase to the public. The wording in the referenced report is > Based on actual auction clearing prices and quantities and uplift MW, inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenue for the 2025/2026 BRA, the 2026/2027 BRA, and the 2027/2028 BRA of $23,100,955,341. This is the increase in revenue to PJM from adding datacenter customers, and includes both the amount that datacenters paid as well as the amount that other customers paid due to higher prices from datacenters. So Fortune calling it an increase to "the public" means that they didn't read the report they are using as their source and are probably just repeating what they thought someone else meant. Bloomberg in the past worded it as "data centers will add at least $23 billion to customer bills" in April and "added a minimum of $23 billion to customer bills" in February. Which while technically correct (datacenters are customers) seems meant to be misleading. And now that's the number that's getting thrown around as the increase to "the public". The part I don't get is that the journalists could just give the actual number for the quantity that they are referring to (the amount that non-datacenters paid due to higher rates due to datacenter loads): when I calculated it a few months ago I think it was something like $16 billion rather than $23 billion. I feel like the story would have the same impact if the headline number was $16B as $23B, but $16B has the benefit of not being a misrepresentation of the situation. --- Also I would definitely recommend checking out the PJM BRA report. It's a bit dense but not too hard to follow, and my personal takeaway was that the PJM market is just very dysfunctional and they are blaming the datacenters instead. I thought SemiAnalysis had a good analysis of it: https://newsletter.semianalysis.com/p/are-ai-datacenters-increasing-electric https://newsletter.semianalysis.com/p/are-ai-datacenters-inc...
- mukbangpervert 3mo ago
  Or how about this framing (using your own numbers): for every dollar a datacenter is charged for electricity, regular hard-working Americans get charged $2.
  - njovin 3mo ago
    First they gave all the water away for free to big ag, and now they're doing the same with the power.
fuckinpuppers 3mo ago
It is crazy to me that somehow customers pay to cover some of the costs for datacenters. I thought everything was usage based, but apparently that is not the case everywhere and it’s a shared burden? What kind of weird crap is that
hereme888 3mo ago
Untrue headline. PJM’s market monitor estimates data-center demand added $23.1 billion to regional wholesale capacity costs across three delivery years through 2028.
ryss20 3mo ago
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umarratra 3mo ago
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anonymousiam 3mo ago
Personally, some of my electricity bills will soon be rising because of changes to how rates are computed. The added "demand charge" will penalize customers that have variable loads, while benefiting data centers with relatively constant loads. Also IMHO, we are building way too many data centers right now. It reminds me a lot of the Y2K dot.com crash, and all of the residual dark fiber. I spotted this article today that claims it's all in our imagination. https://www.city-journal.org/article/data-centers-arent-raising-your-power-bill-bad-policies-are https://www.city-journal.org/article/data-centers-arent-rais...
thelastgallon 3mo ago
Utility providers won't build fiber connectivity to homes and make massive profits ($50+/month), but they'll build unnecessary infrastructure for AI DCs and make people pay for it. As long as we do things to serve the super rich, everything is okay.
jillesvangurp 3mo ago
There are a few things going on at the same time that mean that electricity cost might actually go down. The reasons for that are complex but have to do with how electricity pricing works. In many markets the price includes a lot of taxes, fixed cost for providers and infrastructure. Generation is only a minor cost. And on top of that the prices are set in a way that isn't really that flexible. Infrastructure utilization is a very important here. Grid operators are very conservative with their infrastructure. They want to ensure there's enough to handle the worst case. That means there are a lot of assets that are nowhere near 100% utilized (e.g. cables and long distance transmission). It also means they are very inflexible serving new demand like data centers. Adding batteries as energy buffers enables a lot better utilization of all these assets. That enables more revenue for the same infrastructure cost. Electricity prices can actually go down if you do that right. With renewables, there is very low marginal cost for generation. It's all infrastructure cost. Anything that improves infrastructure utilization enables more customers to have power that then share the infrastructure cost. Data centers that are currently powered by things like on site gas turbines are not being very cost efficient. There's an obvious incentive for hyper scalers to invest in infrastructure that will lower their cost. They have access to many billions. They are spending on anything that will get them energy. They are desperate to spend. And they are completely bottle necked on grid operators that are being very conservative. Hence the expensive side hustle with gas turbines. There's a big opportunity here for massive investment in better grid infrastructure. That wouldn't necessarily be payed for by consumers. But they would still benefit from better infrastructure. The key is unlocking these investments to happen.
thelastgallon 3mo ago
Consumers pay for everything -- increased RAM, SSD, CPU, GPU prices, either directly (for DIY) or indirectly (apple/android phones). We pay dramatically increased prices for every device. We pay more because servers (non AI) cost a lot more now, which means cloud (or your own DC) bills increases for all companies and they are all going to raise prices. Electricity will cost more because AI DCs need to be cheap, all upgrades cost will be borne by consumers. Water will be less available and/or cost more because all forms of energy (except solar, wind, hydro) need a TON of water[1]. Which was ~48 trillion gallons in 2021. As a consequence, nearly everything will cost a lot more. And this is the price we pay for AI. AI has hijacked the supply chains built for existing uses, taken over all the low cost ones. Forcing the rest of humanity to bear the costs of building everything new at a high cost, both high CapEx/OpEx. These externalities must be accounted for when thinking about how 'cheap' AI is. --- [1]From: https://www.eia.gov/todayinenergy/detail.php?id=56820 https://www.eia.gov/todayinenergy/detail.php?id=56820 U.S. electric power sector water withdrawals for power plant cooling: 47.7 trillion gallons of water. The electric power sector uses a large amount of water, mostly for cooling. Thermoelectric power plants (including natural gas, nuclear, and coal plants) boil water to create steam, which spins a turbine to generate electricity. The steam leaving the turbine must be cooled back into water to be used to generate more electricity. Plants withdraw water from nearby rivers, lakes, or oceans and pass that water through the steam leaving the turbine. That process cools and condenses the steam back into water. In 2021, 73% of the utility-scale electricity generated in the United States came from thermoelectric power plants.
JohnLinotte 3mo ago
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197 points by measurablefunc 3mo ago

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m-hodges 3mo ago

> But what if the power company needs to upgrade the substation to handle the increased needs of the data center? Or secure additional sources of electricity? In these cases, the investments are part of the electricity grid that everyone uses. These costs will likely be shared among all customers. Okay but this is a policy choice. It doesn’t have to be that way.

FireBeyond 3mo ago
Exactly. Over in Virginia 37 datacenters use close to 3GW of electricity. The power utilities and overarching transmitters are looking at projects to ship some of that electricity (which requires ~700kV transmission). Two projects in the works are at $18B between them. $18B to provide redundancy and not have to require schools and local government to limit electricity use and provide a bit more slack in the powergrid is a burden that all the users get to share. Lucky them. Yes, all users benefit, but lucky break for those datacenters, getting all that redundancy for power, without a $500M/ea bill.
- jauntywundrkind 3mo ago
  That's great to hear that we have at least somewhat decent voltages. I thought America was still sort of piddling around with mostly 500kV and under power distribution. It's not a huge power multiplier (P = VI, so linear), but in principle I do love the idea that if you are going to have these massive transmissions lines we ought use the conductor well, at good high voltages. China has been doing 1MV and 1.1MV lines for a while now, which is so excellent to see. https://www.bbc.co.uk/future/article/20241113-will-chinas-ultra-high-voltage-grid-pay-off-for-renewable-power https://www.bbc.co.uk/future/article/20241113-will-chinas-ul... https://en.wikipedia.org/wiki/Ultra-high-voltage_electricity_transmission_in_China https://en.wikipedia.org/wiki/Ultra-high-voltage_electricity...
echelon 3mo ago
Build more power!
ihsw 3mo ago
[dead]
russellthehippo 3mo ago
Precisely this. Incredibly annoying headline
- strictnein 3mo ago
  It doesn't even match what's in the article. > "concluded that expected power demand from data centers was _a_ primary reason for $23 billion in customer price increases " Also, it's weird that he describes PJM as "the organization that monitors the PJM market" when they describe themselves as "a regional transmission organization (RTO) that coordinates the movement of wholesale electricity" [0]. So are they monitors of the market or are they the market themselves? I don't know... maybe I'm being picky, but the article just seems off. The whole bit about how data centers could maybe game the system by using less power during peak times also doesn't make sense - that's when they also have the highest demand. Pointing to cryptominers just makes me think he doesn't get what they do, which is basically arbitrage. Of course they stop when power costs go up, it eats up all of their profits and they can simply start back up when the costs go down. [0] https://www.pjm.com/about-pjm https://www.pjm.com/about-pjm
  - TurdF3rguson 3mo ago
    Right, you can't point to a year where price increases didn't happen, so "a primary reason" becomes meaningless. It was going to happen for other reasons if it didn't happen for this one.
    - butvacuum 3mo ago
      by my research, everything has scaled almost linearly with population. But- there was a huge, undeniable, dip in cost of a kw/h of power when lighting started focusing on CFLs and LEDs. Grid expansion stalled, and now people are upset since it started growing again
      - phil21 3mo ago
        Doesn’t the rollout of more efficient lighting also coincide with the shale gas boom? This also happened at right around the time coal plants were starting to be retired for good as well, which short-circuited some expected generation cost increases. You also had the de-industrialization of the US happening at the same time, which also took pressure off the transmission grid. We basically had a few things offset population growth to allow us to use our grandparents electric grid investments for far beyond their expected lifetime. We’ve finally just caught up after a free ride over the past 4-5 decades. I overall agree with you strongly, just surprised that more efficient lighting would have that much impact on grid demand.
SoftTalker 3mo ago
Where I live, if a developer wants to build a subdivision, they pay for the water and sewer lines. They pay to connect those lines to the city infrastructure. If the city infrastructure needs to be upgraded to handle the new volumes, they pay for at least a proportionate share of that too. The ongoing maintenance becomes part of the city's budget eventually, but not the costs of the build out. All those costs go into the price of the houses built there. And this is also part of why building "affordable" houses rarely happens. All the infrastructure costs the same whether the houses cost $100K or $1 million.
- silisili 3mo ago
  That's smart. Do they do it with roads also? That's a big one near me - developers buying hundred acre farms on unpainted 2 lane country roads and jamming in 2000 houses. Then inevitably the road becomes unusable until the city or county gets around to addressing it. Always wondered why the county didn't require the road work, or money for it, up front.
  - mulmen 3mo ago
    In my hometown in Idaho in the 1990s and 2000s yes, this includes access roads and improvements to the surrounding area. A car dealership and Wal Mart both paid for road improvements and traffic lights as part of development.
    - SOLAR_FIELDS 3mo ago
      The developer gets to at least name the roads. I worked for a city, the developers would submit names and while the city had the final call 99% of the time they would just accept whatever the developer submitted. The only times that I saw it get denied were times where it would create confusion like a similarly named road already existed or it could be construed as something profane
  - bityard 3mo ago
    That's negligence on the part of the county/township. Around here, every new development is required to pay for the traffic and utilities improvements that will be required once the thing is built. (And all the engineering that goes into figuring out the impact in the first place.)
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pooploop64 3mo ago
Still waiting for canadian cell phone bills to come down after all those "upgrades" that supposedly happened.
duped 3mo ago
I'm really tired of reading comments like this"this is a policy choice" when these companies are straight up bribing politicians or exploiting their conflicts of interest to make this their policy. The public doesn't have a choice when all our leaders are bought and paid for by oligarchs and their businesses.
- abduhl 3mo ago
  Comments like this are even more tiring. Everyone knows that there are moneyed interests in politics. But decisions on these issues are made at a local level and so are the most addressable by local political actions.
  - TurdF3rguson 3mo ago
    So what? You're saying local officials can't be corrupted by campaign donations? Because that's a hot take.
    - abduhl 3mo ago
      I’m saying local officials are the ones where your vote counts the most.
      - TurdF3rguson 3mo ago
        Sure but the corruption money offsets informed votes against with campaign spend. The economics of expecting to vote them out doesn't work. Plus it feels like one party is getting flexible when it comes to corruption in their leaders. It's not as disqualifying as it was 15 years ago.
  - duped 3mo ago
    In my area there is quite a lot of mobilized anti-data center action that is completely ineffective. There is no legal way to remove corrupt local politicians from office that prevents the harm from being done. And I mean this as in, local government ostensibly representing the community are also the land owners and contractors selling to developers, who can't be voted out of office until next year at the earliest and whose contracts and permits can't be revoked by a subsequent administration. How exactly are you supposed to stop that?
daedrdev 3mo ago
In the US this isn't even true. The costs of grid upgrades are paid new capacity up front, which actually means there is a queue for grid connections twice the US total production, with no costs to ongoing customers.
- lokar 3mo ago
  It varies by jurisdiction in the US.
- mukbangpervert 3mo ago
  Your post is largely false, and quite confused. Grid upgrade costs are frequently socialized onto existing customers, especially for larger upgrades. Your central premise that interconnect charges cover everything is false.
claw-el 3mo ago
Yes, an alternative policy could be, the same unit price for electricity, and the additional cost is covered by increased usage (at the same unit price). The entity making the decision for the increased investment (the utilities company) will take the risk and rewards that comes with the investment. But, if it turns out to be a reward, people will revolt that for-profit company is making excess profit from something as basic as utilities.

erelong 3mo ago

"small price to pay for Massive AI Gains"

BLKNSLVR 3mo ago
FYI to others: the above is not a quote from the article.

bdangubic 3mo ago

according to my wife we paid about 1/2 of that :)

claaams 3mo ago
ah, welcome fellow PG&E user

ddp26 3mo ago

Isn't this the same as saying "utility regulators delaying connecting new power to the grid hiked electricity prices on the public by $23B?" When my apples are expensive, I don't generally grumble about all the demand from pie makers. If they demand more apples, new suppliers should come in to restore the price, right?

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abduhl 3mo ago
Do you need apples to turn on your lights? Was there a sudden new influx of pie makers? Is growing apples a government granted monopoly business? If the answer to these questions was yes, yes, and yes then I think you would grumble.

russellthehippo 3mo ago

Failures to allow faster generation/hookup rollout have suppressed supply increase relative to demand increase

gruez 3mo ago

Isn't almost all of the datacenter build out for inference, rather than training? If so, what's the issue? If the electricity demand is coming from actual use, then why are people getting mad at datacenters or AI companies, rather than the actual people driving the demand? It's like getting mad at Amazon for how much they increased fuel prices, which they surely did, given all the fuel that their trucks/planes burn. Or getting mad at some global food conglomerate for making açaí berries[1] more expensive, but there's a global craze for them and the conglomerate is just catering to that demand. [1] or whatever other "superfood" that explodes in popularity

derektank 3mo ago
The electricity supply is probably a lot less elastic than the gas and oil supply at this point. Also, there’s no global price of electricity like there (more or less) is for oil. Residents suffer a localized cost when a large electricity consumer moves in, and they benefit when they can force the consumer to move to another locality. Definitely NIMBYism, but the reaction is understandable. It’s really just a question of saliency.
jamescrowley 3mo ago
Or getting mad at oil & gas companies? They’re only supplying the fossil drugs we demand. And using their billions in profits to lobby at every level of government and society to ensure they can continue despite the scientific evidence of harm that they’ve known since the 70s? Not at all like that. https://www.investigate-europe.eu/posts/big-tech-data-centres-secrecy-eu-law-environment-footprint https://www.investigate-europe.eu/posts/big-tech-data-centre... https://www.politico.eu/article/europe-choose-ai-climate-goals-data-center-chief-warns/ https://www.politico.eu/article/europe-choose-ai-climate-goa...
hereme888 3mo ago
Bruh.... I've climbed those acai trees with locals in Brazil, and when I saw the thickness and richness of real, purely ground acai, and the dilute garbage (cough sambazon cough) they sell in the US, and mentioned how much it costs in the US.... the guy froze and thought he misheard me. A local friend turned and warned me "don't tell them that, because it'll create frustration and anger he can't do anything about." They just run to the local store after manually grinding it in their machines, and get peanuts for a bag that would sell for >$100 in the US.

seanmcdirmid 3mo ago

Isn't this the classic overcapacity leads to lower prices that also represses investments that would increase capacity. But those lower prices also stimulate new demand that lead to higher prices...which then motivate investments that increase capacity? Perhaps I'm just spoiled because I live in the PNW, where are best use for overcapacity was to ship power off to California. But in the past, cheap hydro attracted aluminum production that then attracted also attracted a whole airplane production industry. I think most people are just debating whether the extra demand generated by AI is worth it, they weren't necessarily debating the same thing when it came aluminum or airplane production (albeit in the 1930s).

bpodgursky 3mo ago

Every tech company building out datacenters would pay in a heartbeat to add commensurate power to the grid. The cost is not an objection. The problem is, there are insane and dumb regulatory barriers to adding power plants or interconnects. THESE ARE THE SAME PROBLEMS FACTORIES FACE WHEN RESHORING PRODUCTION, you should treat datacenters as the face of reindustrialization. Instead of complaining about using resources, we need to focus on solving our inability to provide infrastructure needed to support economic growth.

Hnrobert42 3mo ago
> Every tech company building out datacenters would pay in a heartbeat to add commensurate power to the grid. The cost is not an objection. Yeah. I'm going to need a source on this claim.
- bpodgursky 3mo ago
  Elon (in)famously put gas turbines on pickup trucks to power the Colossus 1/2 datacenters because connecting to the grid was incredibly slow and there was limited supply. And got sued to remove them. Absent regulation, every operator would happily do the same thing to make the problem go away.
- phil21 3mo ago
  The fact datacenters are standing up extremely expensive on-site natural gas turbines due to the immense delays for interconnect. Pretty much no facility operator wants to also pay for and operate their own power plant. They are small and expensive to operate compared to combined cycle natural gas or other sources, and lack of access to a wider grid means even more additional expenses like a additional on-site redundancy. If they could simply pay for grid interconnect that is ready by the time facility construction is completed they would do so, in the vast majority of cases. The money is in getting things online ASAP. Builders are effectively throwing unlimited buckets of money at all aspects of these builds at people who can get shit done fast. Power interconnect would be no exception. I think folks have become numb to these huge numbers being thrown around in terms of how large this investment cycle/bubble is. Those numbers mean real things - like operators writing basically blank checks to jump the queue on networking equipment, wiring harnesses, etc. Those in the industry who are not these giant hyperscalers are kind of shut out of everything from cabling, network gear, HVAC, optics, etc. For any price - since our volumes are a joke compared to these huge contracts. There is a reason you see unprecedented margins for every company selling critical parts and equipment for these builds. Heck, standard power cables have gone up about 8x in cost on us in the past 12mo. It’s been crazy to watch and hear from suppliers how they give insane quotes to these companies which get approved same-day. It’s all a giant race, cost is currently not a primary concern if money can be used to speed anything up.

ChrisArchitect 3mo ago

https://archive.ph/Ypq0o https://archive.ph/Ypq0o

ChrisArchitect 3mo ago

Maybe what they're doing in Oregon with POWER Act hikes on data centers is the way: Oregon approves PGE’s 29.7% rate hike for data centers under landmark law https://www.opb.org/article/2026/07/07/oregon-data-center-general-electric-rate-hikes/ https://www.opb.org/article/2026/07/07/oregon-data-center-ge...

anubistheta 3mo ago

It's important to ground the increase in raw numbers. The total revenue for electricity generation was $514b in 2024. So this was a 4-5% increase in costs. And if it is being invested in better generation and our aging infrastructure, that seems fine.

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NewsaHackO 3mo ago
The fact they gave a raw number instead of a percent of a quantity that is a change hinted that this was the case. $23B is more impressive than 4%.
- mrcode007 3mo ago
  Imagine a mortgage rate raising by 4%. Still unimpressive ?
  - tqi 3mo ago
    Mortgage rates have gone up 8% just since February. https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US
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  - NewsaHackO 3mo ago
    It's funny that you don't realize you are doing the same thing; you are giving the absolute change like the article is doing; you are just doing the change in the rate instead of the underlying quantity. A 4% change in my rate if the original rate is 4% would be a 100% rate rate change, which of course is substantial.
  - ahtihn 3mo ago
    So the rate goes from say 4% to 4.16%? That's still unimpressive. If you mean from 4% to 8%, then that's actually raising by 100%

pyaamb 3mo ago

Data centers should at the very least build their own renewable energy generation. It would set the right incentives in place and encourage investment in clean energy generation solutions. It would also present a very compelling problem to direct all that new AI compute towards solving.

rodonn 3mo ago
The challenge is timing. Power is a relatively low share of the cost of a modern data center, but the length of time it takes for approvals and construction for solar means it would substantially slow down the construction vs. using grid+natural gas turbines which are faster to build and get approval for. I'm 100% on board with charging data centers more for their power usage. They can afford to pay the extra costs. They would much rather pay in dollars vs. in time.
CrimsonRain 3mo ago
Why not all factories? And hospitals? Schools? Offices?

MaxHoppersGhost 3mo ago

What is the increase in jobs/GDP for those communities that have paid more in electricity? A lot of these data centers are built in places with declining population and zero economic prospects for locals within their communities so they're a huge boon.

bakies 3mo ago
None? There's like 12 jobs per datacenter and the revenue goes to the Valley, mostly. The utilities get some profit but I doubt that money stays very local either.
- derektank 3mo ago
  Data centers pay taxes don’t they? That money presumably goes into funding government services which would necessarily raise the local GDP
  - bell-cot 3mo ago
    Only if the data center's task force of influencers, lobbyists, and arm-twisters are incompetent. https://en.wikipedia.org/wiki/Tax_abatement https://en.wikipedia.org/wiki/Tax_abatement (Yes, in general, they'll pay some tax. Some. But they also add a wide variety of direct and indirect expenses, both fiscal and social.)
- MaxHoppersGhost 3mo ago
  Places I know that are getting them are generally seeing big time pay (relatively that is) for construction work and then dozens to a hundred of ongoing jobs once the work is done. That doesn't sound like much but it's huge for many of these communities.

jbellis 3mo ago

This just isn't true. On balance, data centers are turning out to be more like the "anchor tenant" of the power grid, financing improvements for everyone. Overview article with links to actual studies: https://cityjournal.substack.com/p/data-centers-arent-raising-your-power https://cityjournal.substack.com/p/data-centers-arent-raisin...

ZeroGravitas 3mo ago
If the climate change denying and anti renewables Manhattan Institute is running propaganda for something that is strong evidence that the ordinary person is being conned.

kmod 3mo ago

This $23B number that gets thrown around is not the increase to the public. The wording in the referenced report is > Based on actual auction clearing prices and quantities and uplift MW, inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenue for the 2025/2026 BRA, the 2026/2027 BRA, and the 2027/2028 BRA of $23,100,955,341. This is the increase in revenue to PJM from adding datacenter customers, and includes both the amount that datacenters paid as well as the amount that other customers paid due to higher prices from datacenters. So Fortune calling it an increase to "the public" means that they didn't read the report they are using as their source and are probably just repeating what they thought someone else meant. Bloomberg in the past worded it as "data centers will add at least $23 billion to customer bills" in April and "added a minimum of $23 billion to customer bills" in February. Which while technically correct (datacenters are customers) seems meant to be misleading. And now that's the number that's getting thrown around as the increase to "the public". The part I don't get is that the journalists could just give the actual number for the quantity that they are referring to (the amount that non-datacenters paid due to higher rates due to datacenter loads): when I calculated it a few months ago I think it was something like $16 billion rather than $23 billion. I feel like the story would have the same impact if the headline number was $16B as $23B, but $16B has the benefit of not being a misrepresentation of the situation. --- Also I would definitely recommend checking out the PJM BRA report. It's a bit dense but not too hard to follow, and my personal takeaway was that the PJM market is just very dysfunctional and they are blaming the datacenters instead. I thought SemiAnalysis had a good analysis of it: https://newsletter.semianalysis.com/p/are-ai-datacenters-increasing-electric https://newsletter.semianalysis.com/p/are-ai-datacenters-inc...

mukbangpervert 3mo ago
Or how about this framing (using your own numbers): for every dollar a datacenter is charged for electricity, regular hard-working Americans get charged $2.
- njovin 3mo ago
  First they gave all the water away for free to big ag, and now they're doing the same with the power.

fuckinpuppers 3mo ago

It is crazy to me that somehow customers pay to cover some of the costs for datacenters. I thought everything was usage based, but apparently that is not the case everywhere and it’s a shared burden? What kind of weird crap is that

hereme888 3mo ago

Untrue headline. PJM’s market monitor estimates data-center demand added $23.1 billion to regional wholesale capacity costs across three delivery years through 2028.

ryss20 3mo ago

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umarratra 3mo ago

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anonymousiam 3mo ago

Personally, some of my electricity bills will soon be rising because of changes to how rates are computed. The added "demand charge" will penalize customers that have variable loads, while benefiting data centers with relatively constant loads. Also IMHO, we are building way too many data centers right now. It reminds me a lot of the Y2K dot.com crash, and all of the residual dark fiber. I spotted this article today that claims it's all in our imagination. https://www.city-journal.org/article/data-centers-arent-raising-your-power-bill-bad-policies-are https://www.city-journal.org/article/data-centers-arent-rais...

thelastgallon 3mo ago

Utility providers won't build fiber connectivity to homes and make massive profits ($50+/month), but they'll build unnecessary infrastructure for AI DCs and make people pay for it. As long as we do things to serve the super rich, everything is okay.

jillesvangurp 3mo ago

There are a few things going on at the same time that mean that electricity cost might actually go down. The reasons for that are complex but have to do with how electricity pricing works. In many markets the price includes a lot of taxes, fixed cost for providers and infrastructure. Generation is only a minor cost. And on top of that the prices are set in a way that isn't really that flexible. Infrastructure utilization is a very important here. Grid operators are very conservative with their infrastructure. They want to ensure there's enough to handle the worst case. That means there are a lot of assets that are nowhere near 100% utilized (e.g. cables and long distance transmission). It also means they are very inflexible serving new demand like data centers. Adding batteries as energy buffers enables a lot better utilization of all these assets. That enables more revenue for the same infrastructure cost. Electricity prices can actually go down if you do that right. With renewables, there is very low marginal cost for generation. It's all infrastructure cost. Anything that improves infrastructure utilization enables more customers to have power that then share the infrastructure cost. Data centers that are currently powered by things like on site gas turbines are not being very cost efficient. There's an obvious incentive for hyper scalers to invest in infrastructure that will lower their cost. They have access to many billions. They are spending on anything that will get them energy. They are desperate to spend. And they are completely bottle necked on grid operators that are being very conservative. Hence the expensive side hustle with gas turbines. There's a big opportunity here for massive investment in better grid infrastructure. That wouldn't necessarily be payed for by consumers. But they would still benefit from better infrastructure. The key is unlocking these investments to happen.

thelastgallon 3mo ago

Consumers pay for everything -- increased RAM, SSD, CPU, GPU prices, either directly (for DIY) or indirectly (apple/android phones). We pay dramatically increased prices for every device. We pay more because servers (non AI) cost a lot more now, which means cloud (or your own DC) bills increases for all companies and they are all going to raise prices. Electricity will cost more because AI DCs need to be cheap, all upgrades cost will be borne by consumers. Water will be less available and/or cost more because all forms of energy (except solar, wind, hydro) need a TON of water[1]. Which was ~48 trillion gallons in 2021. As a consequence, nearly everything will cost a lot more. And this is the price we pay for AI. AI has hijacked the supply chains built for existing uses, taken over all the low cost ones. Forcing the rest of humanity to bear the costs of building everything new at a high cost, both high CapEx/OpEx. These externalities must be accounted for when thinking about how 'cheap' AI is. --- [1]From: https://www.eia.gov/todayinenergy/detail.php?id=56820 https://www.eia.gov/todayinenergy/detail.php?id=56820 U.S. electric power sector water withdrawals for power plant cooling: 47.7 trillion gallons of water. The electric power sector uses a large amount of water, mostly for cooling. Thermoelectric power plants (including natural gas, nuclear, and coal plants) boil water to create steam, which spins a turbine to generate electricity. The steam leaving the turbine must be cooled back into water to be used to generate more electricity. Plants withdraw water from nearby rivers, lakes, or oceans and pass that water through the steam leaving the turbine. That process cools and condenses the steam back into water. In 2021, 73% of the utility-scale electricity generated in the United States came from thermoelectric power plants.

JohnLinotte 3mo ago

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