Big tech's power needs strain grids, raise rates

Qatar Tribune

21 hours ago

Agencies
Amid rising electric bills, states are under pressure to insulate regular household and business ratepayers from the costs of feeding Big Tech's energy-hungry data centers.
It's not clear that any state has a solution and the actual effect of data centers on electricity bills is difficult to pin down. Some critics question whether states have the spine to take a hard line against tech behemoths like Microsoft, Google, Amazon and Meta.
But more than a dozen states have begun taking steps as data centers drive a rapid build-out of power plants and transmission lines.
That has meant pressuring the nation's biggest power grid operator to clamp down on price increases, studying the effect of data centers on electricity bills or pushing data center owners to pay a larger share of local transmission costs.
Rising power bills are 'something legislators have been hearing a lot about. It's something we've been hearing a lot about. More people are speaking out at the public utility commission in the past year than I've ever seen before,' said Charlotte Shuff of the Oregon Citizens' Utility Board, a consumer advocacy group. 'There's a massive outcry.' Some data centers could require more electricity than cities the size of Pittsburgh, Cleveland or New Orleans, and make huge factories look tiny by comparison.
That's pushing policymakers to rethink a system that, historically, has spread transmission costs among classes of consumers that are proportional to electricity use.
'A lot of this infrastructure, billions of dollars of it, is being built just for a few customers and a few facilities and these happen to be the wealthiest companies in the world,' said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University.
'I think some of the fundamental assumptions behind all this just kind of breaks down.' A fix, Peskoe said, is a 'can of worms' that pits ratepayer classes against one another.
Some officials downplay the role of data centers in pushing up electric bills.
Tricia Pridemore, who sits on Georgia's Public Service Commission and is president of the National Association of Regulatory Utility Commissioners, pointed to an already tightened electricity supply and increasing costs for power lines, utility poles, transformers and generators as utilities replace aging equipment or harden it against extreme weather.
The data centers needed to accommodate the artificial intelligence boom are still in the regulatory planning stages, Pridemore said, and the Data Center Coalition, which represents Big Tech firms and data center developers, has said its members are committed to paying their fair share.
But growing evidence suggests that the electricity bills of some Americans are rising to subsidize the massive energy needs of Big Tech as the U.S. competes in a race against China for artificial intelligence superiority.
Data and analytics firm Wood Mackenzie published a report in recent weeks that suggested 20 proposed or effective specialized rates for data centers in 16 states it studied aren't nearly enough to cover the cost of a new natural gas power plant.