Why are we paying for data centers' electricity usage?
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Anonymous
For the scant number of jobs they provide and the tax breaks they get, they are not a net economic benefit. |
Anonymous
https://www.google.com/search?client=firefox-b-1-e&channel=entpr&q=how+are+retail+ratepayers+subsidizing+data+centers Retail ratepayers are subsidizing the rapid expansion of data centers primarily through utility rate increases that cover the massive infrastructure costs (new power lines, substations, and power plants) required to serve these energy-intensive facilities. As utilities often pass these costs onto their entire customer base, households and small businesses are bearing a disproportionate share of the financial burden for AI-driven data center growth. Here is how the subsidy mechanism works, based on research from the Harvard Electricity Law Initiative and other sources: 1. Socialization of Infrastructure Costs Grid Upgrades: To meet the massive power demands of data centers, utilities are investing billions in new grid infrastructure. Under traditional utility regulations, these costs are often "socialized" or spread across the entire customer base rather than being paid solely by the data center. Unused Capacity: If a data center does not use as much power as projected, or if a planned facility is not built, residential ratepayers may still be responsible for paying for the infrastructure that was constructed to support it. 2. Regulatory and Rate-Setting Loopholes Opaque Special Contracts: Utilities often negotiate special, confidential, or "bespoke" contracts with data centers that offer lower rates, while shifting the remaining costs to standard residential consumers. Federal/State Split: Data centers can exploit the gap between federal regulation (which covers transmission) and state Public Utility Commission (PUC) regulation (which covers retail rates). For instance, in Maryland, a study showed that outdated formulas resulted in residential ratepayers bearing most of the costs of new transmission projects intended for data centers. 3. "Co-Location" with Power Plants Direct Connection: Data centers are increasingly co-locating, or connecting directly, to existing power plants. This arrangement allows them to bypass certain grid charges that other users pay, with those costs potentially being shifted to the public. Inflated Demand: The massive energy demands from data centers in areas like Northern Virginia, Arizona, and Ohio are driving up regional electricity prices, forcing residential customers to pay higher rates for their own power consumption. 4. Direct Taxpayer Subsidies Tax Exemptions: Beyond electricity rates, over 36 states offer data centers exemptions on sales, use, and property taxes. These incentives reduce the tax revenue for local communities, which can lead to higher taxes for residents to fund public services. |
Anonymous
| Lol complain about datacenters while posting on a website |
Anonymous
| When you go on the internet, use ChatGPT, upload images to the cloud, etc, you’re using a data center. You’re paying for it sooner or later. The demonization of data centers is frankly ridiculous. In fact. A lot of data centers are contracting with behind the meter generation so they are outside the wholesale electricity generation market. |
Anonymous
We aren't demonizing data centers generally- that increase has of course been steady as the internet has grown. What we are demonizing is the massive increase in the past 4 years which is almost solely because of the growth in these "AI" systems which are completely inflated by ridiculous VC money. The problem is that the increased demand they have cause in the past 4 years is way out of proportion of previous growth, and it has strained all these systems, and the strain has flowed back through the utility systems and to all of us rate payers. Turn off the "AI" data centers (which will happen naturally in the next year or two as the bubble bursts) and we will all be fine. |
Anonymous
So how much are you paying "unfairly"? You have no idea, do you? Just a vague sense of disgruntlement because the buildings are large and ugly. I'd wager virtually no consumers have the faintest idea how rates are set by public utilities commissions, and equally no concept of a rational basis for asserting whether they should be anything other than what they are. |
Anonymous
Actually do have a pretty good idea how rates are set, although not an expert. I think the main problem is that the systems aren't designed to have this much extra demand this quickly, and it's harder than you think to properly allocate those added costs to these data center owners. Like, how much of a new set of transmission lines you had to build 10 miles from a data center do you allocate to it? It may be that most of the reason for the new lines is because of the data center, but there's not a simple way to calculate that, so they revert back to the usual system, which is basically spreading it out system-wide. I don't really have an issue with the public utilities per se- like I said, the system isn't used to this kind of spike in demand. I more have an issue with the money people because they are dumping so much ridiculous money into this stuff that there are bound to be weird outcomes as you stretch the balloon out so much. What's going to be really annoying is 5 years from now when you have a bunch of these buildings with almost worthless servers in them (because they degrade and get replaced by new chips quickly), with no demand to keep the lights on. |
Anonymous
| Privatize profit, socialize expenses. Nice scam. |
Anonymous
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Anonymous
If AI were only restricted to things that improved society great but its not. Its also used for dumb sh56. |
Anonymous
I think you missed the point of the cartoon. It's a common trope- a response to someone saying they want to improve something is "well, you use that thing, that means you must love it and have no right to complain about it". It's a ridiculous argument but pretty common. |
Anonymous
I think you mean "you use it, want ever-better capabilities, but want it at no cost". |
Anonymous
Nope, was happy with basic internet infrastructure, happy to pay costs for that. Not happy to be footing the externalities produced by a BS "AI" industry that isn't gonna do s--t for me, other than produce slop. |
Anonymous
+1 And the argument that the AI you have to pay for is better. OK? So you are charging a direct consumer price based on usage and also benefiting from from subsidized electricity? So everyone is forced to participate? |
Anonymous
All of the above applies to wealthy people too, not sure why you are bringing these into the conversation. Even if this is about wealth inequality, these habits do not determine your success or failure, these are human vices that poor people don't have to have to stay poor and rich people can have and still be rich. |