Electric bill may be paying for big data centers' energy use
71 comments
·September 7, 2025whimsicalism
> Here’s the problem for consumers: To meet data center demand, utilities are building new power plants and power lines that are needed only because of data center growth. If state regulators allow utilities to follow the standard approach of splitting the costs of new infrastructure among all consumers, the public will end up paying to supply data centers with all that power.
I don’t agree with the premise of this article. Of course they will “include these costs” for all ratepayers because the alternative would be Meta (or whoever) just buys all the electricity (or at least a much greater share). Of course ratepayers share in the cost of building new infra because the equilibrium price of electricity has gone up.
lesuorac
Is that premise true?
I thought most utilities weren't allowed to increase rates to fund new development and that's semi an issue for new nuclear plants because you can't add say 1 cent to everybody's bill to finance the loan until after it's been built. Which many people argue is a good thing considering America's inability to stick to a budget and inability to achieve economics of scale.
Although even if it's false. Adding more demand without a corresponding increase in supply leads to a price increase and I'd suspect most residential power demand is inelastic (hence the issue for Griddy customers during Texas's winter storms) so you're going to feel it for a different reason.
A4ET8a8uTh0_v2
Speaking of.. aren't most of those public utilities?
epistasis
Public utility Commissions are corrupt with shocking frequency, and Americans just shrug it off without reform. Arizona is notorious for this. It even reached into state legislatures, there was a massive Ohio bribery scandal not too long ago. But there's a lot more that never gets any attention, especially with the death of so much journalism.
sowbug
*whoever
who is for subjects, whom is for objects. The answer to your query is the subject that is buying the electricity.
whimsicalism
you're downvoted but i appreciated the correction and edited the post
XorNot
Except little of that infrastructure is going to serve rate payers at all. The sort of high capacity data center connections being built aren't strengthening or improving the electricity supply for residential consumers - their lines aren't changing, in fact most of the transmission infrastructure is unlikely to be able to serve them at all.
whimsicalism
most of the cost here is coming from generation, especially given that these plants are often being colocated with the data center and the companies themselves are oftentimes financing the transmission lines. i agree where possible, transmission costs (and associated liability) should be internalized to the particular consumer (also in residential fire-prone areas).
kesslern
This is not the case for AEP customers in Ohio. Our transmission costs have increased so much over the last few years that many are paying almost as much for transmission as generation (on $200+ bills). The Columbus Dispatch recently wrote about it after so many people posted their bills in the Columbus subreddit.
alphazard
If the utilities didn't get any subsidies from the government then it wouldn't be an issue. Electricity costs would increase as demand shifts out, the excess surplus for the power company would allow them to invest in more infrastructure. The big customers would contribute more to the new infra because they buy more electricity.
However if utility companies do get subsidies to spend on infra, then it doesn't matter how much electricity a person buys, the money is coming from taxes separately from how much electricity anyone is buying. This would allow large consumers to take advantage of tax payers to build the infra to shift out the supply, which mostly benefits the large consumers.
The TLDR is that this is a known drawback of utility monopolies and subsidies, and if you took those away it wouldn't matter how much electricity anyone was using, it would all sort itself out with prices.
malfist
I'm not sure you can say a utility company prices are better set by the free market. Even outside government enforced monopolies, you can't exactly pick and choose a utility, or hook multiple up
alphazard
I specifically said that you needed to get rid of monopolies and subsidies for prices to work.
Most places are not set up for that, and giving a power company a monopoly is a necessary evil. That's not a solution without a tradeoff though. When you have a monopoly, the consumers need to collectively negotiate prices. Part of that negotiation can lead to other forms of rent-seeking in the form of subsidies, or whatever else. It's just trading problems for problems.
What might a better solution look like? Having municipalities own the last mile, and take ownership of the grid might eliminate the need for energy monopolies. Multiple energy suppliers could compete, and the grid would be maintained through contractors. The contractors hired to tend to the lines and conduits wouldn't be in the power business, they would be in the plumbing and wiring business. There is a state monopoly on the grid infrastructure, the same way there is a state monopoly on roads. There's no government truck or car monopoly even though that's what uses the roads.
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WillAdams
There has to be some sort of regulation --- ~50% of the cost of electricity is for transmission/line maintenance --- though I would argue that the traditional electric co-operatives are the best option for rural areas.
brightball
I’m surprised that big data centers aren’t just locating in proximity to nuclear plants that can probably easily supply the extra power and reasonable rates.
jacquesm
Because (1) they are at or near capacity, (2) they are very costly to operate so those 'reasonable rates' are very hard to come by when using nuclear as power source. There are other, cheaper sources for power than nuclear that are more in line with what data center operators are willing to pay. There has been some talk of data centers with their own power plants. But usually that centers on fossil fuels rather than on nuclear.
There are some efforts in that direction though:
https://neutronbytes.com/2025/05/07/google-plans-three-600-m...
And I'm aware of a much smaller scale project in Europe besides this one and there are probably others.
maxerickson
Why would nuclear plants mostly be running below capacity?
brightball
I apparently made a bad assumption. I thought I remembered reading that nuclear plants were looking to shut down due to economics of electricity not being profitable for them anymore, which I assumed meant lack of demand.
I also remembered seeing several articles about a crypto mining operation doing exactly that.
- https://ignition-news.com/talen-energy-buys-out-a-nuclear-po...
- https://insideclimatenews.org/news/10052025/new-york-bitcoin...
- https://www.power-eng.com/nuclear/nuclear-powered-bitcoin-mi...
- https://www.texastribune.org/2024/09/12/texas-power-plant-ex...
That last one is actually just a natural gas plant though.
jacquesm
Well, technically they always are, but the GP suggested that there was a lot of spare capacity and there really isn't. The WNA has a nice set of graphs about this, which show 80%+ utilization and that's not too far from the practical limit.
https://world-nuclear.org/our-association/publications/world...
namibj
They don't need to for the location to be reasonable; you can use the grid connection with reverse power flow to feed the data center just fine. Leave enough to feed the coolant pumps in an outage though.
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whimsicalism
i think that is a large part of what they are doing, although unfortunately so far most of the collocation has been gas turbines due to the shorter timelines
whimsicalism
i have trouble understanding why the US is the best place for building these data centers, surely it is not the best place to do electricity arbitrage and LLM training and even inference doesn’t need fast networking
kelnos
My guess would be because the US has weak privacy laws.
Building in the EU would mean a lot more compliance-y things. Building in developing countries means more stability risk, plus unreliable electricity.
gxs
We subsidize a lot of things we may not realize
Company decides to brick a popular product? Who picks up the landfill tab?
Your electricity one is a good example
Hell, even RTO - SF offered some pretty nice tax incentives for companies who enforced RTO to “revive” the city. Who pays for this? They did a great job keeping those on the DL
I only know because I happened be involved in those conversations on the periphery - it was no coincidence we started an RTO policy right as we got a huge, huge new office
monsieurbanana
Given that the biggest companies never pay their fair share of taxes, it'll be more difficult to point out what we dont't subsidize.
whimsicalism
what is the fair share and why cannot it not just be paid on the individual side by capital gains on share holders or wage income for workers?
carlob
> just be paid on the individual side by capital gains
When you are rich enough you can just borrow using your wealth as collateral and never incur in capital gains.
monsieurbanana
> what is the fair share
Let's start by saying the amount they would pay if lobbying was what it was meant to be and not an overtly corrupt shitshow
> why cannot it not just be paid on the individual side by capital gains on share holders or wage income for workers
Ah right, the trickle down economics, forgot about that. I'm sure that will work out well
pkul
One I'm particularly angry about is the deallocation of resources into keeping rail transport in favor of using trucks on nearly free highways.
crote
What makes you believe highways are nearly free? Do all those people doing highway maintenance not get paid?
Also, road wear scales with the fourth power of axle load. This means a 3-axle 30-tonne truck causes 15.000 times the wear of a 2-axle 2-tonne car. Even if highways are currently "nearly free" to maintain with a car-dominated traffic mix, moving all that rail transport into heavy trucks is going to rapidly make highway maintenance costs explode.
acdha
I think they agreed with you and were commenting that the roads aren’t tolled to pay for construction or maintenance.
whimsicalism
not to mention the implicit subsidy in gas prices. the problem is these subsidies are popular with the electorate
whimsicalism
it would be a subsidy to deliver power at below equilibrium price to residents simply because they are residents and not a corporate buyer. raising prices for consumers when demand comes from elsewhere is not a subsidy.
exabrial
Same companies are lecturing you about global warming
helqn
They are just following the script of the elites. They don’t care more than the average Joe.
charlieyu1
I guess paying high rates for more usage is too sensible. Here in UK we even have daily standing charges
aidenn0
Commercial power nearly always pays a monthly charge based on the peak deliverable power.
However, the utility rates are regulated, and the regulators allow the power companies to charge customers more to recoup any capital expenditures. Presumably when demand increases, the utilities increase capex to meet the demand.
kelnos
The utility rates are regulated by people who, in most states, are in the pocket of the utility companies.
The public utility commissions of the US are remarkably corrupt.
jauntywundrkind
Here in Data Center Alley (Virginia) area, the power company Dominion is adding a pretty significant base cost increase (+$10.92) for consumers for this reason. Seemingly with no promises that the generation rate won't also keep shooting up as it has.
There's also a push to create a new rate for very big power users, beyond the existing rate that's shared with many industrial/manufacturing users. https://wtop.com/virginia/2025/09/dominion-proposes-higher-u...
Power rates have been going way up and up for consumers in the area. We're still nowhere near CA levels of absurd, but it sucks a lot seeing the merciless tick up year after year. After being a pretty reasonably priced power area for so long. It sucks feeling like only worse & worse pain is on the way.
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ChrisArchitect
Article from June.
[dupe]
Recent and related discussions:
Electricity prices are climbing more than twice as fast as inflation
https://news.ycombinator.com/item?id=44931763
Big Tech's A.I. Data Centers Are Driving Up Electricity Bills for Everyone
https://news.ycombinator.com/item?id=44905595
The U.S. grid is so weak, the AI race may be over
https://news.ycombinator.com/item?id=44910562
AI is booming so are household utility bills
Cnxvvcb
Bnvn Gj
mingus88
But socialism is bad
DaSHacka
Yes, it is indeed possible for two things to be bad at the same time.
aj7
May be?
They also get massive subsidies and tax breaks for building these data centers. They require the negotiations be done in secret and often fight to keep the agreements secret to make it so people don’t flip out when they see how bad they are.