I am curious how electricity is priced. Why are more and more utility providers charge based on ‘infrastructure cost’ or ‘fixed platform fee’ instead of usage fee?

Within the US, energy prices for are typically split into supply and distribution rates with taxes and fees added to each of these. There are typically a large number of these fees that are passed through to the consumer, but just are bundled together to reduce confusion. An example fee is one for keeping power plants idle as extra capacity for when it's needed. Electricity has a nationwide market with different prices for spot prices vs long term although if you are big enough you can also get a direct contract to hedge your energy supply prices.

The complaint here is that PJM is spending money on upgrading the long range wires and passing that fee in a way that's not calculated for usage but instead it's likely divided evenly amongst member states. If you're upgrading wires in PA why should Maryland pay for that? These would taking in new/higher fees being passed to consumers.

The long range transmission lines are different than short term transmission lines. The long range ones appear someone to hit electricity from a power plant in California for a business in Baltimore.

> Why are more and more utility providers charge based on ‘infrastructure cost’ or ‘fixed platform fee’ instead of usage fee?

Because unlike many commodities, electricity, once generated, is hard to store, yet supply must match demand in real time. You need to meet peak demand, even if normal usage is not as high. If you pay purely for usage, that might not send enough price signals to ensure that you have the necessary capacity when you need it. https://www.canarymedia.com/articles/enn/explainer-how-capac... has a more detailed overview of how markets are being structured to provide capacity, separate from actual generation.

> I am curious how electricity is priced. Why are more and more utility providers charge based on ‘infrastructure cost’ or ‘fixed platform fee’ instead of usage fee?

This is also happening in Australia. I wonder if it is a similar story in the US, or not.

In Australia, rooftop solar and batteries have become so widespread, many properties have dramatically reduced their consumption of power from the grid. This poses a problem when electricity usage costs are used, not just to cover the power consumed, but also the grid infrastructure, much of which are fixed costs which are incurred irrespective of actual usage. In response, the regulator is looking at changing the billing structure to increase the fixed part of the bill which you pay irrespective of how much power you use.

because as part of their legal monopolies they are only allowed to charge a "reasonable" usage fee.

ETA: utility companies make profit on capex, not opex

This recent article from Semianalysis did a great job explaining part of it: https://newsletter.semianalysis.com/p/are-ai-datacenters-inc...

I'm not familiar with the Maryland power grid, but I've observed in other places that putting data centers in places with older / inadequate grids can / will require upgrades to handle the new load.

Here's some very recent writing that will help you understand what's happening:

https://www.organizedmoney.fm/p/how-private-equity-is-drivin...

https://www.thebignewsletter.com/p/data-centers-arent-the-ma...