More Perfect Union - We Found the Hidden Cost of Data Centers. It's in Your Electric Bill

[ihaveaquestion]

"Data centers are driving up utility costs. As companies like Amazon and Meta pour billions into data centers across the country, it’s raising electricity bills. While they’re making record profits, the rest of us are forced to foot the bill."

Note: I think I saw this posted on DU recently, but I missed it then. Anyway, it's explains really well the how we're all likely to pay for data centers' electric usage. They propose at least one solution at the end, too.

[Blue Full Moon]

1. They are now trying to pass laws in the state legislatures

For the power companies to be able to control your thermostat and water heater. Republicans are saying it's to save American families money and to save energy. It's to keep the electricity stable for the data centers.
The bills need to be reduce rates for people and make the tech bros pony up.

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[ihaveaquestion]

2. I'm not surprised.

I worked for a utility company in the 90's and they were trying to develop the technology to do this at that time.

[h2ebits]

10. You are absolutely correct.

I listened to the YouTube video.

Your statement:
"The bills need to be reduce rates for people and make the tech bros pony up."

I agree!!! We're working to have green energy to save the planet and everything on it but most, not all, is being produced and going to data centers etc.

[Blue Full Moon]

11. They are going to cause deaths for the tech bros AI

[mwmisses4289]

3. Didn't this start coming out late last year?

My imperfect memory seems to recall when the first couple of data centers went up, there were concerns about water usage and the data centers getting what amounted to sweetheart deals with power companies.

[surfered]

4. Bit coin miners got sweetheart deal with Texas

https://www.kut.org/energy-environment/2024-01-04/bitcoin-texas-power-electricity-grid

[mwmisses4289]

12. Yes, that is what I was trying g to remember.

Thank you!

[a kennedy]

5. I haven't had an electric bill for over 8 months.....

I’VE GOT SOLAR POWER!!!!

[hunter]

9. Are you connected to the grid?

If so, your electric bill is an accounting trick that increases electricity costs for everybody else.

If you are truly off the grid, with a big investment in batteries, stand-by generators, and complicated electronics, then you know the actual capital costs and frustrations of solar power. These are pretty much the same at any scale from a tiny house in the wilderness to a regional electric grid.

My neighborhood has so many grid-tied solar installations it's a net exporter of electricity when the sun is shining. Our electric supplier has had to upgrade its distribution infrastructure to accommodate this. When the sun isn't shining most of my solar neighbors, who do not have large battery installations, use electricity from the natural gas powered grid like everyone else.

It's no coincidence that places with aggressive "renewable energy" programs (Denmark, Germany, California, etc.,) have some of the most expensive electricity in the industrialized world.

[modrepub]

6. On The PJM There's Something Called Lowest Marginal Price (LMP)

Electricity prices on my local grid are governed by LMP; the price is set by the highest cost of producer sending power to the grid. Unfortunately, electricity demands need to be met instantaneously, there's little to no large-scale storage available compared to how much is being used. So prices on the grid can vary from day to day and season to season. Winter time loads tend to be higher than summer time loads in most of the country.

For most large grids, the lowest cost electricity producers (base load) are the ones operating the most, but the base load doesn't cover for the entire grid on most occasions. When demand exceeds capacity, the grid manager calls up other producers bringing on the cheapest producers available then adding more to meet demand. With LMP, all producers are paid according to the cost of the highest producer providing to the grid (regardless of what the other producers costs are to produce that electricity).

This in of itself, is perverse. If grid demand grows, which it unexpectedly has as data centers come online, the producers have no real incentive to build more base load plants. Why increase production when demand goes up and you make more money without changing what you're doing?

Data centers get around LMP by buying up or building their own power production. Once they own the electricity production, their cost are fixed. And they get the benefit of selling any excess back to the grid when prices spike.

This system isn't set up so that the market will react to lower prices. If a market is functioning properly, as prices go up, other producers will enter the market so demand is met and prices go down. Another function of the market is to weed out the inefficient producers and replace them with producers who are more adept at making what the market wants.

The only real solutions I see is for folks to take energy efficiency in their own homes more seriously. Adding solar, if possible, is another option. Having battery storage on site and using it during price spikes is another option. On a large scale, states could chip in and build their own base-load plants and operate them at cost. Not the best solution, but states can access billions of dollars to build power plants easier than the average consumer. And maybe the threat of doing that will be enough to get some of the other producers to build more base load plants.

And who really knows if the AI/electricity boom is a real thing. Just like the rail roads, dot com, and Holland tulip buyers, this may only a fad. But an expensive fad, at least initially. AI could wind up bankrupting a lot of folks who want to jump on the bandwagon.

[erronis]

8. Thanks for that fascinating discussion. I didn't know any of these levers and knobs

that the electric companies use to make more profit.

[reACTIONary]

7. OK, I'll look into it, but...

.... It doesn't make much sense to me. Data centers are building their own capacity, and paying for extra capacity, so they are on the supply side, not just the demand side.

Sometimes, when something negative develops (inflation), whatever the latest bad-fad that's around gets the blame.