As Data Centers for AI Strain the Power Grid, Bills Rise for Everyday Customers

While Amazon, Google, and other companies build new data centers — sometimes for their AI projects — parts of America "are facing higher electric bills," reports the Washington Post:

The facilities' extraordinary demand for electricity to power and cool computers inside can drive up the price local utilities pay for energy and require significant improvements to electric grid transmission systems. As a result, costs have already begun going up for customers — or are about to in the near future, according to utility planning documents and energy industry analysts. Some regulators are concerned that the tech companies aren't paying their fair share, while leaving customers from homeowners to small businesses on the hook.

In Oregon, electric utilities are warning regulators that consumers need protections from rising rates caused by data centers. From Virginia to Ohio and South Carolina, companies are battling over the extent of their responsibility for increases, attempting to fend off anger from customers. In the Mid-Atlantic, the regional power grid's energy costs shot up dramatically, and data centers are cited as among root causes of rate increases of up to 20 percent expected in 2025... 

The tech firms and several of the power companies serving them strongly deny they are burdening others. They say higher utility bills are paying for overdue improvements to the power grid that benefit all customers. In some cases, they said in response to criticism from consumer and business advocates that they are committed to covering additional costs. But regulators — and even some utilities — are growing skeptical. 

A jarring example of fallout on consumers is playing out on the Mid-Atlantic regional power grid, called PJM Interconnection, which serves 13 states and D.C. The recent auction to secure power for the grid during periods of extreme weather and high demand resulted in an 800 percent jump in the price that the grid's member utilities had to pay. The impact will be felt by millions by the spring, according to public records. Power bills will increase as much as 20 percent for customers of a dozen utilities in Maryland, Ohio, Pennsylvania, New Jersey and West Virginia, regulatory filings show. That includes households in the Baltimore area, where annual bills will increase an average of $192, said Maryland People's Counsel David Lapp, a state appointee who monitors utilities. The next auction, in 2025, could be more painful, Lapp said, leaving customers potentially "looking at increases of as much as $40 to $50 a month...." 

Advocates cite another source of cost-shifting onto consumers: discounted rates that power companies and local government officials use to entice tech companies to build data centers... Google worked out a deal with Dominion Energy, blessed by regulators, to pay 6 cents per kilowatt hour for its power. That is less than half of what residential customers pay, as well as substantially less than is paid by businesses... 

The article points out that in Pennsylvania, "Amazon's novel plan to fuel a data center from a reactor at the nearby Susquehanna nuclear plant is now in jeopardy, after regulators blocked it Friday. They cited potential impact on consumers as among their concerns. The plan threatens to leave other ratepayers stuck with a bill of $50 million to $140 million, according to testimony from [power utility] AEP and utility conglomerate Exelon." 

And meanwhile, one Virginia retiree complained about a proposed $54 million transmission line and substation for an Amazon data center. "They are already making money hand over fist, and now they want us to pay for this?
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