On this note, I'm actually confused about why datacenters raise electric costs. Why doesn't the data center bear an extra cost for the added infrastructure?

If I build a house on undeveloped land and the electric company needs to run lines, do I also (in a much smaller way than a data center) increase the costs for all other customers? Is everything always just spread evenly?

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Aurornis an hour ago | parent | next [-]

Your house goes through different approval processes than large infrastructure processes. You also pay a different rate than commercial customers.

Energy hungry infrastructure projects pay something called a "large-load tariff" to try to contain their second-order costs from leaking into residential rate payers pay for. It's not perfect, so a datacenter project could trigger some upgrades that cause rates to go up.

The situation is confusing everyone right now because it's impossible for the average person to tell why rates are going up. A lot of utilities are doing things like finally addressing old fire-prone infrastructure (see the California fires) and dealing with inflation for everything from their generation input costs to inflated costs for infrastructure to putting straight of Hormuz-inflated gas in the tanks of their fleet. Customers only see that their rates are going up and AI datacenters are on the news, so they put them together and assume datacenters are to blame for everything. Yet rates are spiking even in places with zero datacenters.

The topic has entered the domain of emotionally charged topics so nuance is hard to come by. Many of the anti-datacenter people are against datacenters as a proxy for their hatred of AI and the electricity and water arguments are just convenient justifications. This is how we arrive at the article.

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john_strinlai an hour ago | parent | prev | next [-]

>I'm actually confused about why datacenters raise electric costs

electrical supply is not infinite. datacenters have high electrical demand. more demand + same supply = increase prices.

>Why doesn't the data center bear an extra cost for the added infrastructure?

the problem is that added infrastructure is not built instantaneously. it lags behind. so costs will be high until more supply-side infrastructure is in place.

i agree that there should be some sort of stipulation that when you build your mega datacenter that you also have to build out electrical infrastructure at the same time. but unfortunately, that is not how it is.

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everdrive an hour ago | parent | next [-]

Thanks, that's really useful. I guess in my head I had the impression that costs could potentially be static. eg: if you had 10 customers total, each needed to pay $1 to generate electricity to serve their needs. So when you scale up to 100 customers, you can still have everyone pay $1 and come out to the same place.

I totally get the general principle that not everything scales linearly like that. But, I also know very little about electricity generation, so I have no idea where the breakpoints are. (I would also guess that if the demand dips low enough, there could be a case where after decreasing costs for a while, costs actually start to rise again as there is some minimum infrastructure needed but fewer customers to bear the cost.)

	▲	unglaublich an hour ago \| parent [-]
		Generally, electric networks benefit from economies of scale. So more customers will _lower_ prices per-customer in the long term.

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thurn an hour ago | parent | prev [-]

This is basically just the normal dynamic with American tax law where tax jurisdictions are terrible at coordinating, so they end up approving things and agreeing to tax things at a very low level in order to win the competition. Even when states/counties try to work together on this stuff there's a huge defector problem, like "hey I can back out of this multistate tax compact agreement and get 500 new jobs which will let me win local reelection".

I suppose you can reduce a lot of both good at bad things about the country to "because federalism".

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bayarearefugee an hour ago | parent | prev | next [-]

> Why doesn't the data center bear an extra cost for the added infrastructure?

In some states (like Oregon and Virginia) they do, but in a lot of states the regulations for rate structures are flat among all users so when there's a large surge in new demand the utility will build out new capacity and spread the cost of that new capacity to all rate payers with no regard for the fact that the new capacity would not have been needed without the new demand (from data centers). So everyone who was already using the electricity pays the new higher rates along with the new large-load user.

These companies building data centers will often make a lot of PR statements about how they are fine paying the extra cost for extra use while at the same time lobbying behind the scenes to actually avoid that happening and fighting against changes to utility rate structures that would raise their costs. By and large they can't be trusted.

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avidiax an hour ago | parent | prev | next [-]

Yes. That is a central problem with power distribution in California.

The cities are paying exorbitant prices for electricity to pay for safer infrastructure for rural customers (undergrounding).

Some cities have divested from PG&E and enjoy much lower electricity prices as a result.

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cucumber3732842 an hour ago | parent [-]

But it's a circular problem. The price wouldn't be exorbitant if these rural areas were left to their own devices. But their utility build outs must be done per rules passed at the behest of the richer urban areas.

We're dealing with this bullshit in my own city in another state. From the parks to the roads to the sidewalks to the library every goddamn thing we touch gets driven up to the point of "can't actually do what we wanted" in cost because some rich assholes 100mi away in the vicinity of the capitol have taken a "build it fancy and rich or don't build it at all" attitude and enshrined that in state law and rules.

Sometimes they'll be so kind as to eat part of the cost with state grants, as long as we sell our freedom away in other ways.

	▲	avidiax an hour ago \| parent [-]
		Rural power was always expensive, but now due to wildfire risk, it needs to be ruinously expensive. It's not for the benefit of the cities, and driven by corporate risk management.

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tshaddox an hour ago | parent | prev | next [-]

> If I build a house on undeveloped land and the electric company needs to run lines, do I also (in a much smaller way than a data center) increase the costs for all other customers?

In some sense, sure, any time you buy something you apply some upward price pressure. Of course, whether the resulting price changes measurably depends on many things, like the scale of your purchase relative to the scale of the market, the price elasticity of demand, who the marginal buyers and producers are, etc.

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sheauwn an hour ago | parent | prev [-]

In many cases, I'm sure they are paying the cost of the added infrastructure. However, the increase in electricity costs come from having overall more electricity demand than before the data center was built. An increase in demand raises the cost for everyone.