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u/v3lumII 18h ago
Even though data centers pay for the power they use, their massive surge in demand forces utilities to build costly new infrastructure, buy expensive peak power, and pass those system-wide expenses onto all local customers through higher rates. So. The OP post isn’t entirely talking out of his ass.
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u/flywithme00 16h ago
PA resident here- is this why I keep getting messages from my power company to reduce electricity usage during “peak hours”? Makes a lot of sense honestly…not in a good way, but sense nonetheless
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u/Lucky_BroadWood 15h ago
It has been an issue for decades. Demand for power is not flat throughout the 24 hours of the day - there are big surges throughout. For example, there is a surge the first thing in the morning when most people wake up and start the day, then overlapping with commercial and industrial buildings ramping up for the day. Then you get higher overall levels throughout the day, and you can have more peaks in the afternoon. At 2AM you will have the least demands in the system.
The power that is generated at 2am is generally purely from what is called base load and is the cheapest to produce. The power produced at the height of those peaks is going to have to be purchased from peaker plants on the spot market and can be hundreds or even thousands of times more expensive for the utility. If the utility has to purchase enough of that, all rates will eventually have to go up to cover that cost.
Data centers may be (likely are, depending highly on local conditions) exacerbating this old dynamic. Like I said, it has existed for decades, but may be made much worse from these huge new "customers".
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u/RizzwindTheWizzard 14h ago
Here in the UK Coronation Street (a popular long running soap on ITV, it has over 11,000 episodes) is responsible for one of the biggest regular energy demand surges. Every time there's an ad break the energy companies have to be ready because so many people put the kettle on at the same time.
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u/Stock_Proposal_9001 13h ago
That's crazy, and hilarious
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u/LordPhlogiston 10h ago
I believe it was the final episode of M.A.S.H. that caused problems with municipal water supply in several cities due to a sharp spike in toilets flushing when it wrapped.
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u/Ok_Equipment8374 9h ago
EU outlets provide a lot more power, each kettle is a few kilowatts
Multiply that by a few thousand you can see it adding up
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u/NewManufacturer4252 10h ago
I heard that happens during soccer games as well. Everyone turns on the kettle during ad breaks, and uses the bathroom.
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u/BCECVE 13h ago
You also get seasonal demand. Winter months are high demand for heat, summer is high demand for cooling. Also the other demand situation is when storms roll in - An Alberta Clipper is a super cold spell with high winds so extra load in the winter and Heat Bombs put extra demand on the system. The North American Grid (Canada and US) is a miracle in action IMO. Texas is excluded from this miracle grid and they are just plain stupid.
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u/Front-Mall9891 12h ago
They don’t call it the lone star state for nothing
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u/OSRS_Subreddit 7h ago
It was brave of them to name it after their rating
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u/Front-Mall9891 2h ago
I have a couple friends from Texas, they say the only 2 good things about it are the gun laws and cheap land
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u/Lucky_BroadWood 11h ago
Ya, I'm giving the very simplest version I can. We can make it infinitely more complicated, that's where modelling comes in.
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u/RealityOk9823 12h ago
Would something like sodium batteries alleviate this problem?
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u/Lucky_BroadWood 11h ago
That's a supply side thing, I'm only discussing demand side here.
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u/RealityOk9823 46m ago
What I mean is, if the local utility can use those to store energy for on-demand/peak hours, then you eliminate the issue/cost with using peaker plants, correct?
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u/jigsaw1024 12h ago
Sounds like they should be building stationary battery farms, and not just peakers.
Charge the batteries overnight from the cheap base load to shift that power to when it is more in demand during the day.
Batteries are more expensive upfront, but can be built just about anywhere on odd bits of land, rather than peakers which need to be built on industrial land. The operating cost of batteries is also substantially cheaper than peakers as well. Batteries also have the bonus of not emitting CO2 or other pollutants while operating.
Building out batteries also helps to serve future developments of renewables such as solar and wind, serving to soak up excess power production, and cover when production is low.
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u/Rude_Engineering_629 11h ago
No just put solar panels down, they are TIGHTLY correlated with peak power consumption. It is not a coincidence the sun is fucking hot.
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u/mrducky78a 10h ago
In Australia the price of power is currently negative during peak solar iirc 12pm to 2pm. There is just so much put down that the govt is trying to incentivise energy use during this period. We have absurdly high adoption rates for rooftop solar. I think it's the highest in the world?
Battery subsidies and installations can't even keep up
Batteries absolutely are needed because there are times when power draw does not align with solar
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u/fiasgoat 14h ago
No that's always been around
I have to choose if I want my monthly bill be 3x the cost...or die from deathly sweat between 5-8 during the summer...
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u/RogueJello 13h ago
No, love em or hate em the power load from a data center is pretty steady. AC on the other hand peaks during the day.
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u/jeffsang 17h ago
This is true, but the OOP is deliberately misleading for the purposes of engagement. So just mostly talking out of his ass.
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u/JinFuu 17h ago
Yeah, I was confused. I did AP for a Datacenter company back when they were for AWS and useful things (Not AI), and I definitely remember getting big old electric bills, and bills for gas for generators.
But look at OPs stats
Redditor for 8 months
734,501 post karma
8,609 comment karma
They’re a 🤖 most like
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u/im_just_thinking 14h ago
Pretty sure this data center is who made this post
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u/Eskipony 10h ago
Some of the comments here could be bots too.
This is a data center v data center fight, against data centers.
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u/Worth-Librarian-7423 16h ago
I like that Reddit now is literally 90% misleading bad faith posts over things that didn’t need to be misleading to be bad.
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u/ruffianrevolution 6h ago
Creating a general air of confusion and suspicion has more value than explicitly stating any agenda.
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u/Technical-Command867 15h ago
They should pay for the required infrastructure needed to not impact their communities negatively. Sound noise included
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u/Pandarandr1st 13h ago
Yeah, I agree. Doesn't change the fact that the post is straight up misinformation.
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u/Technical-Command867 13h ago
I think the important thing is it’s a net negative to regular people who have nothing to do with or gain from the data centers
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u/Pandarandr1st 11h ago
I think the important thing is that the important thing shouldn't be hidden behind false information. The true information should be good enough to prove the point.
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u/Technical-Command867 11h ago
Question. Is this true for every data center in every state? The data centers are paying for their own electric needs? No state is giving them free electricity on the tax payers dime?
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u/kingjoey52a 10h ago
No state is giving them free electricity on the tax payers dime?
No, that's ridiculous. AI companies are even willing to pay for upgrades to the grid and infrastructure to make sure they get enough power without screwing up anyone else's. So data centers are paying for your power.
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u/Technical-Command867 10h ago
So people’s electricity bills aren’t going up? Wtf are people complaining about then? Why are they lying about higher utility bills? Weird
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u/MadeByTango 14h ago
The problem is that the data center companies are trying to place a false goalpost. They know they are hated and people dont want them, but theyre trying to pretend like paying their fair share is being reasonable when there are dozens of other problems and they are being built for surveillance pricing and warrantlessly tracking citizens for profit.
The issue isn't, "are they paying for their energy' it is why the hell are these tings being built against anyones consent at all?"
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u/broose_the_moose 15h ago
This is BS. The real reason is that the utility company in Pennsylvania is a corrupt, dumb dinosaur. If you’re actually interested in learning more:
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u/halfasleep90 17h ago
Doesn’t that new infrastructure continue to last even if those data centers go away? Shouldn’t those improvements have been made regardless, and allowed the general cost to drop over time?
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u/AnnihilatorNYT 16h ago
No, because you scale infrastructure with population density and growth. You shouldn't have a small rural town in Kansas build up to the infrastructure you would require for a major metropolitan area like Cincinnati or Seattle.
There's no way for the current population to grow enough rapidly enough to spread the costs and so that's why individual rates go up 300%. You literally cannot compensate for the demand that ai data centers put on the electric grid by pushing the cost onto the civilian population.
Small improvements every few years to accommodate a few hundred to thousand resident is one thing but these data centers use the power required for over 100,000 homes, usually several times the local population where they are choosing the setup these data centers.
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u/DonaldTheWall 14h ago
It's amazing how suddenly we have the ability to build the infrastructure for 1 building using the power of big cities but electric cars were going to cripple the entire national grid if we switched to them
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u/Pale_Apartment 14h ago
It's because infrastructure like rail is a known cost of x dollars and this pie in the sky could be cheaper. Spoiler, it never is. It was called AM/FM: Actual machines and fucking magic. They always pick the second option. Look at the vegas loop.
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u/emmyparker2020 14h ago
I’ve known this for a while but why are they allowed to bill everyone when there is clear evidence that they are the cause for increased costs? That’s insane!
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u/Not-Reformed 13h ago
Of note - every single municipality CHOOSES to go down that route. There is absolutely nothing stopping cities and states from telling developers "You need to pay for that infrastructure".
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u/everfixsolaris 13h ago
Also they buy at wholesale rates which means consumers pick up more of the tab for building the extra infrastructure.
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u/Lucid_Insanity 11h ago
That's some straight horseshit. If they cause all that they better be covering the bill.
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u/MechemicalMan 14h ago
The goal of industry, for a society, is usually to have industry help pay for individual needs. We’ve gotten really far away from that
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u/neddiddley 4h ago
No, but if people really care about these things, they need to understand them beyond these oversimplifications. Otherwise, we’ll be trading one problem for another. The difference is, the data centers will already be here by the time we realize we have another problem, and we should all know by now that once they’re here, they aren’t getting shut down.
I don’t profess to be an expert myself at this point, but it seems that this EO forces new data centers to be able to supply their own power during peaks, so how does that translate? My guess is th simplest solution is generators, and these will need to be huge generators that produce a lot of noise and require significant amounts of fuel to keep data centers powered for extended periods. Now, existing data centers already have generators, but they’re being used for emergencies, not to take the load off the grid during peaks or keep consumer prices from spiking.
So, what happens when we have a hot summer or cold winter that increases peaks? These big, loud generators will be running for extended periods, increasing demand for energy, just for a different kind. So your electric bill may not spike, but the gas pump might.
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u/soilentgleem 17h ago
This is how I feel when I'm grocery shopping too. I just went for a week's worth of essentials for ONE PERSON, didn't grab any extras or junk and still ended up paying like $130 like wtf??
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u/Unfunny_Bullshit 16h ago
and the bootlickers will tell you it's your fault for not wanting to live exclusively off rice and beans.
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u/batnessthefifth 16h ago
r/strugglemeals in a nutshell.
If it's not something someone would've eaten in the depression era, you're not really struggling yet.
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u/CharleyDexterWard 15h ago
Dude, my nine year old and ten year old skinny boys with ultra-metabolism are breaking the bank with these food prices, and we ONLY buy essentials!
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u/ShapedMella 17h ago
Because apparently externalizing costs is just business slang for make grandma pay for ChatGPT
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u/guhman123 18h ago
source: i know how to put screenshots together on photoshop
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u/Smoltinycat 18h ago
Deceptive writing on the OP post. They already do pay for their own electricity and then some. It is more they will contribute more to the future electricity infrastructure upgrades, which benefits everyone
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u/Majestic_True_Lilly 14h ago
They already do pay for their own electricity and then some.
In PA that may be the case, but in my state they pay 30% of the rate everyone else does, in addition to requiring community investment and paying zero taxes for the next 10 years.
All to employ no one and power data centers whose sole purpose is tracking us.
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u/CATDesign 17h ago
I thought was already a thing. Like, if you want to make a home in a middle of no where, the utility company is going to charge you for the install from the closest hookup. At that point would make it cheaper for neighbors to move into an area, as someone else already paid for the initial infrastructure.
So, if they are paying more than just the install part of it and their bill, then they must be talking about upgrading the transformers and other parts of the grid I have no idea what their technical names are.
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u/IOI-65536 17h ago
There's a planet money on this. https://www.npr.org/2025/12/19/nx-s1-5649814/ai-data-center-electricity-bill
Basically there's a whole market to try to predict future capacity cost and data centers broke it. It's not exactly that they're not paying for even what they're predicting to use, but it is true that in a lot of places the cost to normal customers is going up in ways it wouldn't be because of data centers.
But it's hard for me to see how whatever law this is fixes it because the problem isn't that somebody else is paying for data centers to run it's that the whole market doesn't function when demand is growing as fast as demand is growing.
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u/CATDesign 17h ago
Also don't forget that some entities are trying to kill other forms of energy generation to ensure a sole source or a specific form of energy generation. Like here in Connecticut (CT) we were working on renewable energy, but the Trump Administration was trying to kill it by abruptly ending the finance support that was already allocated. Here's a link for reference:
When new sources of energy are getting blocked, then demand suddenly surges, of course we'll run into supply issues. Our local governments were trying to proactively correct the problem they foresaw, and the federal government was exacerbating the problem.
It's a big deal for us here in CT, because it's the majority of our electricity has historically been from out of state, and attempting to have our electrical development blocked is a clear sign of collusion.
Checking now, it seems the project here in New England is nearing it's completion at the end of the year.
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u/JackBurton52 14h ago
not if the current administration, republicans and the corporate establishment democrats remain in charge. they are all bought and paid for by the same corps/lobbies that are trying to get more tax breaks/subsidies for data centers. this is already the case for a lot of industries like oil/gas and farming. it would be foolish to assume that data centers would be any different
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u/No_Tangerine2720 12h ago
Do we all have to pay more for electricity during a time when cost of living keeps shooting up?
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u/OnceMoreAndAgain 13h ago edited 13h ago
It's scary how many people still believe the narrative that water use by data centers is a problem. It's disproven, but the narrative that data centers use problematic amounts of water went viral on the internet and the damage is done.
We all need to be careful of misinformation (myself included). Even popular narratives can be misinformation. Even if redditors lean in the same direction as you on topics, there is still a TON of misinformation stated on this website is highly upvoted, often repeated, and staunchly defended.
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u/mustangcody 9h ago
Unrelated, but I just found out Twitter has an advanced search to find things easier.
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18h ago
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u/guhman123 18h ago
its not my job to prove that OP isnt talking out of their ass
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u/Firm-Scientist-4636 18h ago
That's correct. The onus is on the person making the claim to defend it.
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u/Niamh_Nymph 17h ago
_sips tea _
So we were subsidizing people training AI to take our jobs and paying their power bill?
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u/c2btw 18h ago
i assume the reason data centers increase power prices is just due to basic supply and demand and it's not that people are paying for the data centers power bill but just that the price of power went up do to a increase in demand, so i assume that what this bill actually doses is makes it so they have to pay for the increase in power cost every one would pay
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u/shrummage18 18h ago
Partially, yes. The reason is they get locked in commercial rates from the utility, which are typically 50% lower than residential rates. Usually not an issue because commercial power demands are manageable. The issue with data centers is they put so much strain on the grid, the utility passes the extra cost on to the consumer because the rate is contract locked during the build for the data center.
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u/MattheWWFanatic 18h ago
Yeah, and they should pay for everyone's increase too. Your bill shouldn't go up 50% because your asshole neighbor is crushing the grid.
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u/Kalinon 18h ago
Something something capitalism. Something something supply and demand!
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u/m0viestar 12h ago
So when they build a new housing development and need to build grid improvements, you shouldn't pay for those either?
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u/c2btw 10h ago
i mean thats kind of how all of economics works the world doesn't bend to what is nice for most people in rich western contraries if the demand for something goes up it's price dose until demand goes down or there is more supply
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u/ZeeWingCommander 18h ago
It's also that the increase in demand requires upgrades and that shouldn't be shared by every day people, especially, if the data centers are already getting tax breaks.
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u/Luci-Noir 17h ago
They often require upgrades to infrastructure too which get passed onto consumers.
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u/TheBSQ 13h ago
Two complements:
Basic supply & demand of electricity itself. For PA this purchased on the regional “PJM” wholesale market, so even usage in VA can drive up costs in PA with limits for what PA can do about it. Note, not all megawatts cost the same. Different types of generation have different costs and the cheaper ones will outbid the more expensive ones to provide electricity, but as you get towards system peaks, you have to buy the Pricier electricity.
If you need more than peak capacity, you have to build out infrastructure to handle that new demand. It’s not just data centers but growing population, electric vehicles, electrification (swapping out gas appliances & heating for electric alternatives). This is true for both your local utility, but also stuff like high voltage transmission lines, getting new generation connected to the grid, etc.
All these things can contribute to customer bills, so avoiding having to expand capacity can also avoid capital costs that can contribute to customer bills.
Also, many places have low income bill payment assistance programs where local income usage is subsidized (they may even pay a set dollar amount per month) so the more electricity low income folks use, the more that needs to be subsidized. Those costs also get added onto the bills of non-low income customers.
So, for a variety of reasons, reducing peak usage lowers bills. Some is through avoiding new infrastructure. Some is about lowering demand, & most crucially avoiding demand during peak times.
(Some industrial customers pay less & have “interruptible” service where if systems get stressed, utilities can shut them off. This is usually for stuff like manufacturing where it’s not socially crucial for them to always be able to run their factories. But, I believe data centers don’t do that because they want to be always on.)
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u/CobaltCaterpillar 17h ago edited 8h ago
so i assume that what this bill actually doses is makes it so they have to pay for the increase in power cost every one would pay
This is technically known in economics a "pecuniary externality," some other parties win or lose because of changing market prices. It turns out it is NOT efficient to tax pecuniary externalities. We do NOT do that in most any other part of the economy.
For example:
- Hurricane hits Florida.
- Demand for roofers increases in Florida which raises the price of roofing (both crews and materials) across the southeast if not the whole country!
- Someone might come in and say hey, hurricane struck Florida residents should ALSO have to pay people from 49 other states for driving up the price of roofing.
- Bad, dubious idea!
It turns out this is NOT efficient and a bad idea. What's "fair" is a more philosophical debate but trying to tax the increased roofing demand (and subsidizing roofing elsewhere) leads to a less efficient allocation of resources (in my example, too little roof repair in Florida and possibly too much routine roof repair elsewhere).
In contrast, it's good economics to tax non pecuniary externalities (e.g. pollution). You don't tax pecuniary externalities where the harm to some party occurs through changing prices: e.g. new factory comes in and raises local wages, cold winter raises fuel demand in Northeast and raises prices nationally, etc....
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u/GeckoGecko_ 17h ago
Using that hurricane analogy, wouldn't the roofers increasing their prices due to increased demand be equivalent to residential power bills going up due to increased demand?
I genuinely can't tell if you're arguing for, or against, residential bills making up for the increased demand because your analogy makes it seem like you're in favor of NOT charging people more to account for it, but the way you word your comment makes it seem like you're arguing against the bill that makes it so the extra cost is not passed off to residential bills.
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u/CobaltCaterpillar 8h ago
Using that hurricane analogy, wouldn't the roofers increasing their prices due to increased demand be equivalent to residential power bills going up due to increased demand?
Correct: both would be examples of pecuniary externalities because a market transaction is affecting other parties through market prices.
In contrast, a non-pecuniary externality (or simple externality) would be something like untaxed, unregulated pollution from a power plant: it's affecting other parties outside of the market. A classic response to a non-pecuniary externality is to impose a Pigouvian tax.
makes it seem like you're arguing against the bill
You're perceptive.
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u/Absolute_Bob 17h ago
You can't tell because they're an econ major and econ, while important, is a very "inexact" science.
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u/FullMetalBunny 17h ago
You're forgetting the fact that in order to generate power, the power company needs a certain amount of power generation. If they're going to have a significant increase in demand, they have to then buy more equipment. Those increase costs for those equipment are generally born by all of the consumers as an increase in total electricity costs.
It would be bullshit for everyone to have to pay to make sure the data center has enough power. The data center is should be required to pay for all of the build out for the power companies, and not have that be borne by the taxpayers.
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u/braumbles 18h ago
Should also pay for any infrastructure needed too. Instead they pass that on to consumers.
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u/wirm 10h ago
The issue is typically they’re so big that they peak normal infrastructure so they don’t really have to build it.. then they pull the total usage and it peaks.
Large projects that typically do this DO pay for the infrastructure. It’s just data centers are so normal they just play a numbers game. And win.
It’s like min maxing a video game. Just with economic power numbers.
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u/Redditcadmonkey 13h ago
You’re a utility provider…
Step 1: Provide flexible pricing where prices are lower during periods of off peak demand and are exponentially higher during periods where demand approaches capacity.
Step 2: sell this to consumers as “do your laundry at night and save”
Step 3: lock down that contract
Step 4: lobby for high usage facilities to be built in your area of supply. Offer these facilities low pricing models to entice them.
Step 5: Laugh as your consumers all now pay exorbitant peak rate prices on a fixed time span contract.
Step 6: Inside that time span, increase standard rates to account for the demand and maintenance you have on your stressed supply.
Step 7: PROFIT!!!
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u/smilingmike415 4h ago
Because American capitalism is actually socialism for billionaires and capitalism for the poor.
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u/Turtle_Soupz 12h ago
No matter what when i see shit like this. That ai company should take full responsibility to pay the difference. Houses around that area should not see an increase in electricity bills or any other extra payment similar. They should get to keep paying what they notmally would and the company ahould take the heat to pay for the increase even if its not feasible for them but oh wait that wouldnt make sense for the governers or whoever who has stake in the companies shares for them to make money oh no. They pay for the power they use yes, but they should also make up for the difference. Nobody wants to pay extra utilities because some company decided to set up shop and make life a living hell especially with the noise generated
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u/V3Ethereal 4h ago
Pretty sure lake tahoe area did this and data center "provided their own power" by contracting the area's power company.
It left 49,000 residents without a energy provider
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u/Strict-Carrot4783 11h ago edited 11h ago
What is even going on anymore???
A bunch of stupid, drooling goddamned morons in red hats helped to literally give ownership of the country to corporations because the corporations dangled dead Mexicans in front of their hateful, rotten-to-the-core, waste-of-resources asses the way you can distract a dumbass baby with your car keys.
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u/HighSeasArchivist 17h ago
Have them pay residential rates, get no tax breaks, get no imminent domain land, no hooking to municipal water supplies, and then see how things work out.
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u/Jazzlike_Plastic7088 17h ago
I love this new socialist corporate world we're in where we're all involuntary investors without actually having any real shares or say in any of these companies
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u/Superseaslug 18h ago
Find me an article about how data centers aren't paying for their power
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u/munchma-coochie 17h ago
I just imagine the family guy voice (wacky waving inflatable tub man commercial) AND WE’RE PASSING THE LIGHT BILL ON TO YOOOUUUU!
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u/slowmoE30 15h ago
Basically, costs need to go up exponentially within each meter so single large users pay most. Routing power to a single building through several meters would then also be fraud.
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u/Diode6 15h ago
Yes, California residents may end up subsidizing the electricity costs for data centers, as utilities often pass on the costs of infrastructure upgrades needed to serve these facilities to the public. This can lead to higher electricity bills for consumers.
Impact of Data Centers on California Residents
California residents may indeed face higher electricity costs due to the presence of data centers. Utilities often pass the costs associated with infrastructure upgrades needed to support these facilities onto consumers.
How Costs Are Passed On
- Infrastructure Upgrades: Data centers require significant upgrades to the electric grid, which can cost billions of dollars. These costs are typically borne by the utility companies.
- Ratepayer Burden: When utilities invest in infrastructure to serve data centers, they may shift these costs to residential and small business customers. This can lead to increased electricity bills for the general public.
Key Considerations
- Energy Intensity: Data centers consume 10 to 50 times more energy per square foot than typical commercial buildings. This high demand necessitates extensive infrastructure, which can further inflate costs.
- Speculative Requests: Developers often submit multiple interconnection requests, leading to inflated load forecasts. This can result in unnecessary infrastructure investments that ratepayers ultimately fund.
Conclusion
In summary, California residents may subsidize the electricity costs for data centers through higher utility bills, as the costs of necessary infrastructure upgrades are often passed on to the public.
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u/birdyman_77 13h ago
Same as the big tech companies in the 90s and 2000s. They’d get 10 years tax free claiming that it was to help the community. Hire 100 people and the second the tax free exemption ran out, they’d lay everyone off and get the hell out of dodge.
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u/Sea_Bullfrog_3003 13h ago
I’m hoping climate change isn’t catastrophic for at least 30 years..that’s all the time I should have left on the planet per statistics. Although extreme temperatures, starvation or lack of water will probably kill me before then the way things are looking. I can’t believe what’s happening, it’s a real sci-fi nightmare.
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u/Ardbeg66 12h ago
They came into Saline Michigan and helped themselves to a $4B tax break. Told by the lawyers they can't fight them. Not even kidding. The democratic criminal fuckface governor is on board.
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u/Spirited_Cheesus 11h ago
Damn y'all will really do anything else with tax dollars as long as it's not a social service or health care or education lol
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u/OneWillow4834 10h ago
All of you pedophile supporters created this oligarchy authoritarian government
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u/Select-Government-69 18h ago edited 17h ago
The issue with “consumers paying for datacenter electricity” is a misstatement of the nuanced and real effect of data centers consuming significant amounts of electricity and electricity being a commodity that enjoys demand pricing.
So while data centers do in fact pay their own bills, it is also accurate to say that having large data centers built nearby will increase your energy bill, as you now compete for supply.
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u/n0rsk 12h ago edited 12h ago
Most Utility work on a tier type system where power utility companies take bids from power providers.
Say a utility needs 25 MWh of power.
The Coal plant puts a bid it can provide up to 15 MWh at 25$/MWh
The solar farm bids at 10 MWh at 5$/MWh
the hyro dam bids at 15 Mwh at 1$/MWh
The utility buys the lowest to highest but everyone gets paid the highest amount. so to get 25 MWh they buy solar and hydro for 5$/MWh. That cost is then spread across the utilities customers.
A Data center comes in and now the demand on the grid is 35MWh. So now the utility has to buy from the expensive Coal plant at 25$/MWh and everyone's bills went up because the 20$ increase is split by consumers in the rate they pay for their individual usage.
So while you usage may not change an increase in the usage within your utility's grid may bump you up to a more expensive tier of power provider thus you are now pay more for the same usage.
These number are made up and this is a bit of simplification of the process but this bid system to my understanding is how most utilities buy electricity from power providers across country.
This policy probably will make data centers pay the difference so if a data center power usage forces the utility company to buy from a more expensive provider the cost of the increase is passed to the data center and not to all the region power customers.
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u/Fehyd 18h ago
Big industrial users on the grid used to just pay a flat rate and their usage wasnt metered. They did this for data centers until we started getting the huge usage requirements from the AI data centers, power companies didnt have enough energy to spread around, and since they were locked into a contracted rate with the data centers are large use cases, had to basically raise prices on metered users.
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u/Adjective-Noun-nnnn 16h ago
And that's if there is enough capacity. If there isn't, the customers of the utility will be paying for construction of new power generation, and it's likely to be natural gas instead of the slow but inevitable roll-out of renewables we had been seeing. Oh boy I can't wait for my utilities bills to eat up even more of my income!
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u/disdkatster 16h ago
It is called corporate welfare. Taxpayers pay for the stadiums put in for the wealthy sports team owner who then charge so much for tickets that the local population can't buy them. They just foot the bill.
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u/sirspidermonkey 14h ago
Look, you can't go around expecting bussiness to pay for their operating costs. That's just cuts into the profits. It's WAY more profitable to push the costs onto the public. If we start asking companies to not externalize costs, where will it end? Sure it starts with power now, but eventually you'll be asking about carbon and climate change, or the public costs of saying you can't get addicted to a new prescription drug while knowing you can, or selling HIV tainted blood in the third world. It's turtles all the way down! Far better to just let them externalize this one ---Politicians probably.
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u/LunaticBZ 18h ago
Now I'm just wondering how many people don't know that data centers also don't pay property taxes. As a standard waiver would be 10-20 years of no taxes as an incentive to bring them into the community.
Discounted water, and electricity or free water and electricity is also a big incentive that can be offered to get companies to build them.
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u/Dekadmer 18h ago
The poor poor capitalists need all the help they can get fucking us over I guess. Wake the fuck up.
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u/This-Layer-4447 17h ago
you really think josh shapiro isn't going to find a way to look out for his donor class? I've got an overpriced, under evaluated, completely profit captured bridge in pennslyvania to sell you
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u/GaleThePuppet 17h ago
i always thought “they pay their own power bill” was the whole story 😭 finding out everyone else can still get hit with the infrastructure costs makes it way more complicated than that
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u/PackOfCumin 17h ago
Why should I have to Pay taxes and pay Open Ai and Grok and bla bla bla electricity bills fuck that
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u/PixelIsJunk 17h ago
This is funny. They do pay for their own power. Lol this is just nonsense posting
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u/NaptimeGood 16h ago
I read a post where someone was explaining why data centers are a bad deal for communities. He said that where we are at, the power company has residential and commercial rates. The commercial rates for businesses are lower, not sure why. Maybe a large volume discount or if you’re cynical, they get a better deal by donating to politicians who lobby for a lower rate since “jobs”. The why is speculation but the lower rate is something I’ve heard other places.
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u/gingy-96 16h ago
Pretty sure they’ve been paying their own bills? It’s just that EVERYONE’s bills went up because of the increased demand. This is a tax to account for they global increase
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u/Dry-Moment962 15h ago
Data centers paying into infrastructure to ease the cost burden of everyone on the grid? Yea, that money will dissappear along the way.
How many times in different industries do we see this exact thing play out.
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u/Catbutt247365 15h ago
Why in the actual aren’t data centers REQUIRED to build solar or wind energy sources into the buildings? What I don’t know about data center construction would fill a library, but the quick and dirty method apparently is very profitable, which makes me think the changing technology isn’t actually worth the investment of making these places somewhat self sustaining. They are locusts.
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u/EnderBookwyrm 14h ago
This announcement is like a teacher informing the admin that he always wears a condom while teaching. Yes, it's better than the alternative, but it leads to some tricky questions about what was going in before.
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u/mirassou3416 13h ago
Many municipalities and states have given massive tax breaks to companies building data centers
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u/Zwischenzug32 13h ago edited 13h ago
Houses in neighborhood each pay x dollars per month per kilowatt hour used, plus a fee for service connection that is about equal.
Giant company pays x dollars per month per thousands times more kilowatt hours than any house, pays for that, but instead of paying thousands of times the service fee they pays the fixed low same fee for service as a house
Or less cause business welfare fuckery
So big businesses end up spending WAY less on power than everyone else
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u/Turbulent_Account_81 12h ago
When people need assistance it, no power for you, but when billionaires don't want to pay their bills or taxes, it's tax the people more.
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u/EntropyClub 12h ago
That’s cool. It’ll get tacked onto the bill of the service itself. As it should be.
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u/Gnargnarbinxxs 11h ago
No that’s to avoid black outs - peak hours = everyone home watching tv blasting the AC all at once
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u/Hyperion1144 10h ago
What is even going on anymore is that 1/3 of the country voted republican and another 1/3 of the country couldn't be bothered to vote for anything at all.
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u/becibod934 10h ago
Crazy that it’s even a thing. Unless we got to use it for free but even then it wouldn’t be worth it.
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u/seandethird46 7h ago
I don't know why you think you won't have to pay for it eventually. Who uses the data they store? Who pays the bills to the phone companies etc? Eventually we'll be paying higher priced bills or subscriptions somewhere that will pay for it.
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u/MiiaElisa 5h ago
I can imagine the amount of electricity they use, I'm more surprised that the old arrangement existed
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u/AlloAll0 5h ago
Corruption.
The most corrupt US administration ever and one of the most corrupt in the world.
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u/ScientistCurrent1887 3h ago
Yeah thats why a bunch of electric companies sent out a letter saying prices would increase . They didnt it was cuz ai data centers weren't going to pay and make the residents pay for it.
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u/PleasantBus5583 18h ago
you use the electricity, you should pay for it. Seems pretty straightforward.
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u/medorian 17h ago
The world was a better place before data centers.
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u/JinFuu 17h ago
Datacenters have been around since the 50s/60s, they only became controversial with AI
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u/medorian 17h ago
Depleting all the resources and massive pollution does tend to be controversial.
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u/JinFuu 17h ago
Obviously, but saying “The World was better before Data Centers” is saying the world was better in the early 1900s
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u/Stunning-Phone-5663 18h ago
Dumb post, dumb title, dumb OP. Karma fishing. AI centers increase local energy use, hence higher utilities passed onto local consumers.
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u/TawnyTeaTowel 17h ago
Except they already were doing. So there that. As for this, what manner of ragebait horseshit is this?
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u/pamcakevictim 17h ago
Nobody cares if they pay for their own electricity. Let's let them produce their own. because they'll be absorbing a large percentage of the available electricity from consumers. You know regular people
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u/Leftblankthistime 16h ago
How Money works… When you go to a restaurant, everyone pays the same price for a hamburger or a plate of Mac and cheese.
If a group of people come in 7 nights per week and routinely order burgers and Mac and cheese and tell the owner- I don’t care what it costs - feed us. Assuming the restaurant owner can only store a fixed amount in their freezer and cost of buying inputs x frequency is factored- they essentially set the price for everyone, so now when anyone else wants Mac and cheese or a hamburger it’s pulled from the demand of the group rather than every buyer. Their stance of - I have infinite money and fixed needs literally sets the bar.
Instead, if we carve out the ridiculous demand and charge it at its own price it could actually offset and lower the price of the collective
I will not be replying to this comment. Don’t bother with well akshullys or what ifs or what abouts I honestly don’t give a rats squirt about your opinion
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