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

m-hodges

> 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.

erelong

"small price to pay for Massive AI Gains"

bdangubic

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

ddp26

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?

russellthehippo

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

gruez

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

seanmcdirmid

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

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.

ChrisArchitect

https://archive.ph/Ypq0o

ChrisArchitect

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-ge...

anubistheta

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.

pyaamb

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.

MaxHoppersGhost

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.

jbellis

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-raisin...

kmod

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-inc...

fuckinpuppers

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

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.