I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
Its supply and demand. The AI data centers are paying their electric bills, but at the same time they represent a significant increase in demand for electricity, so electric companies can raise their prices.
Expanding on that: in competitive electricity markets, in theory, total demand is met by the cheapest plants (by “marginal price”: how much does an additional unit of electricity cost?) that are available.
The marginal price of PV, wind and hydropower is pretty much zero.
The next cheapest are usually older nuclear fission plants and coal power plants.
Then is a huge gap and then come newer nuclear plants and gas fired power plants.
But all of these plants aren’t built over night. So maybe before all of the datacenters, total demand may have mostly been met by renewables and coal and gas power plants only operated a few hundred hours per year. Now, total demand rises and those plants need to operate more often. That’s why the prices rise just because of demand increase. Other effects (e.g. changes in regulation, corporate greed, …) might be at play as well.
Sure, but the companies driving the increased demand should be paying for the increased capacity directly instead of having the general public subsidize it.
No no no! It’s cheaper for them to pay off politicians for special rates and then pass on the cost to the consumer! Won’t you think of the poor billionaires!
Yep. It’s the same reason everyone has to pay more for RAM now, even though consumers didn’t cause the shortage.
This bears repeating. Datacenters do have to pay the light bill. Even when the VC money dries up. It’s a beautiful thing.
Naw, they’ll just declare bankruptcy and the municipalities will foot the bills for the infrastructure debt.
Basically, have you even seen the Simpsons monorail episode? It’s that.