US utilities plot big rise in electricity rates as data centre demand booms

https://www.ft.com/content/c5f20c78-7931-492f-9153-675f3046e245

77 96 1 year ago

tw04• 1 year ago

It would seem to me that the datacenters in question should be bearing the entire cost of the increase. Anything else is just subsidizing someone's business. The utilities are there to serve the people, and Facebook trying to mine everything I do online, violating my privacy, isn't something I have any interest in subsidizing.

linotype• 1 year ago

Subsidizing big business and the rich is the American way. Just look at how much money we spend on the old vs the young.

aiaisiskbs• 1 year ago

Yep, same deal with birth rates and immigration. Instead of taking money from the rich to enable more native births we import cheap/exploitable labor. The wealthy don’t bear the cost but reap the benefits. And they’ll hand wave some trickle down economics argument about GDP going up to say we all benefit.

Same exact logic as increasing everyone’s rates due to datacenter demand.

NekkoDroid• 1 year ago

Socialize the cost, privatize the profits.

That has been The American Way and will for the forseeable future remain that way. Neither party is really interested in fixing it, just one of them is less inclined in furthering it as much as the other.

Analemma_• 1 year ago

Not all of these increasing costs are datacenter-related. Utilities really did systematically underinvest in infrastructure during the 2005-2020 period when US per-capita electricity use was basically flat, and the incoming expenses due to climate change plus a big reorientation towards solar/wind-- which needs a very different grid-- are real.

But I agree the closed-door deals with datacenter operators need to end, as well as the discounts/tax breaks for opening new ones. The "jobs" justification for these is a joke: datacenters create a couple dozen mediocre jobs in the area, and hundreds of well-paid ones way off in Silicon Valley. California reaps the rewards of you wrecking your own revenue base.

danans2• 1 year ago

The "jobs" justification for these is a joke: datacenters create a couple dozen mediocre jobs in the area, and hundreds of well-paid ones way off in Silicon Valley. California reaps the rewards of you wrecking your own revenue base.

Silicon Valley != California

Wall Street and its associated global oligarchy reap the rewards, not the average Californian, who pays the costs via higher climate change risks, insurance costs, and energy costs.

throwaway313313• 1 year ago

Ah well, in reality the utilities try to raise the rates as much as they think they can get away with each year (they are limited only by what the respective state public utilities commissions allow), and this provides a convenient justification.

vkou4• 1 year ago

It would seem to me that the datacenters in question should be bearing the entire cost of the increase. Anything else is just subsidizing someone's business. The utilities are there to serve the people,

So, in a market economy, shortages and price increases don't just hit the marginal buyer.

I'm not sure why electricity prices should behave as you describe, but, say, gasoline prices should not.

pkulak2• 1 year ago

Very true. I guess, in this case, we'd all like to see it divert from a perfectly free market. We manage capitalism in a million other places; it wouldn't be totally out of line. And it wouldn't be like rent control in NYC, or something else that distorts entire economies and ruins markets.

solatic2• 1 year ago

The utilities are there to serve the people

Are they owned by a democratically elected government? Do their profits return to the public purse? No? Then they don't exist to serve the people. They exist to serve their customers. As the public slowly switches to self-owned electric generation (i.e. rooftop solar + home batteries), the distinction between "the public" and "their customers" will increase.

It's an important distinction also because people need to remember that one of the reasons why it is difficult to on-line new generation is because of the bureaucracy put in place by that government which supposedly serves the people.

cogman10• 1 year ago

Are they owned by a democratically elected government?

Depends on the utility, some of them are.

the bureaucracy put in place by that government which supposedly serves the people.

It cuts both ways. There's obviously a problem with utility boards not listening to the voice of the people they represent but on the flip side these boards have been important brakes on utility companies going crazy with their prices.

ChrisMarshallNY• 1 year ago

Utilities aren't public projects, but they do have a fairly strict fiat.

They are granted a monopoly by the elected government (and regulated by all that overhead). In return, they need to make sure they serve the constituency.

toomuchtodo3• 1 year ago

Electrical utilities are regulated and governed by public utility commissions or other consumer advocates in all but a few states.

https://pubs.naruc.org/pub/21475F72-1866-DAAC-99FB-1E3EE0593...

TFYS• 1 year ago

They exist to serve their customers.

No, they exist to serve the capital that owns them. If they get more profits by serving fewer customers and reducing quality of service, they'll do it. If it could operate at 0 profit but serve every customer with high quality service, it would not get done.

toomuchtodo3• 1 year ago

Show up to local planning meetings to impair the attempts to locate these in your area. Elect reps who will block them, and recall those who allow them.

https://www.datacenterwatch.org/report

In Cascade Locks, Oregon, voters recalled two Port Authority officials in June 2023 for supporting a $100 million data center project from Roadhouse Digital. Following the recall election, the new board canceled the data center project in July 2023.
In Warrenton, Virginia, residents voted out all town council members who supported Amazon’s proposed data center in the November 2024 election. The newly elected council, composed entirely of project opponents, now has the mandate to block the data center.

morngn• 1 year ago

But if it gets built one town over wouldn’t that be a double whammy: higher energy prices and no tax revenue to offset that increase? Seems like prisoners’ dilemma.

michaelt• 1 year ago

IMHO the problem is:

OpenAI wants 3000W to run a high-end multi-GPU server to serve 1000 users paying $20/month each. They've got $20,000/month of income from the server, if they can power it.

Grandma wants 3000W to run her central AC, so she can live comfortably in Phoenix, Arizona. She's got $2,300/month of pension income.

If you try to raise the per-kWh price of electricity to reduce demand, OpenAI won't be the ones who get priced out. It'll be Grandma.

gambiting3• 1 year ago

Every utility in the world does separate business and residential rates for this very reason.

nradov• 1 year ago

Grandma's AC doesn't run 24×7. Most utility districts have some sort of subsidy or rate limit program for low income customers.

Ultimately the only way to supply the constant power consumption demanded by data centers and keep consumer prices reasonable will be to build more fission power plants. This approach has several serious cost and safety issues but it's the only thing we're certain will work.

stefan_• 1 year ago

In a parallel world where OpenAI is profitable, anyway.

bodiekane• 1 year ago

Not the point you meant to make, but, maybe Grandma shouldn't live in a place that requires constant use of an air conditioner to be survivable.

Americans keep moving to places that are fairly inhospitable to humans - too hot, too little water, etc. It'd be nice to see migration patterns shift away from the currently popular deserts and hurricane-prone coasts.

msgodel• 1 year ago

At least here industrial users have to pay spot power prices so they immediately see large rises in cost if their demand/power factor messes with the grid.

supportengineer2• 1 year ago

LOL what? The purpose of the utility is to maximize grift. The CEO, C-Suite, and shareholders get paid. You're just there to be sheared.

golergka2• 1 year ago

That’s not how supply and demand work

_DeadFred_3• 1 year ago

Public utilities are Public Utilities. Quasi monopolies treated differently and operated outside of 'supply and demand' capitalism.

https://en.wikipedia.org/wiki/Public_utility

eagerpace• 1 year ago

Surely this is an extreme use case, but do individuals get to choose which companies get access to power? The same could be said about any business. And the same could be said about any consumable resource. It’s a slippery slope.

rufus_foreman• 1 year ago

> The utilities are there to serve the people

Data centers are people, my friend.

varenc• 1 year ago

That makes sense in terms of fairness. But if the utilities are a capitalistic business selling a limited resource (energy), and FB/OAI are willing to pay a higher price for it, then it affects the price for everyone.

_DeadFred_3• 1 year ago

Public utilities are.... public utilities. That is a specific thing that is not a standard 'capitalistic business'. They can't operate without special concessions/allowances. They can't be severed, but the 'squeeze every penny types' have severed the generation from the grid as if they two are separate, and allowed the 'generators' to behavior as it they aren't tied to a Public Utility grid.

ashoeafoot• 1 year ago

Just out of curiosity how much calories compared to a human, does a model need for an hour?

niek_pas• 1 year ago

I am by no means an expert but I would imagine the answer to this question depends a lot on what you mean by 'a model'. Do you mean 'all of (e.g.) OpenAI's compute over an hour'?

kube-system2• 1 year ago

Humans run at about 100 watts. A 4090 GPU alone is 450 watts.

_DeadFred_3• 1 year ago

Hence why I bring up potential energy savings is this other HN thread:

https://news.ycombinator.com/item?id=44524117

anticensor2• 1 year ago

Humans run at 100 watts while performing simple tasks, the figure approaches 550 watts while performing demanding cognitive or demanding manual tasks.

phkahler• 1 year ago

Data centers over 100MW should build their own power plants. This is not unheard of in other industries. It's on-site so doesn't require infrastructure upgrades either.

barbazoo• 1 year ago

And build them somewhere in the first place where there's good access to renewable energy so we don't end up solving this with gas or diesel generators.

no_wizard2• 1 year ago

mini nuclear reactors would be ideal, assuming power demand can be formulated and accounted for ahead of time. On the surface of it, that should be more than possible.

asdff3• 1 year ago

Too bad the US government doesn't let nuclear technology proliferate and improve

azinman23• 1 year ago

They’re not yet ready for prime time, unfortunately.

bob1029• 1 year ago

There are also arguments from a disaster recovery perspective. You might be able to get away from the dirtier standby units if you have redundant prime capacity in something like a CCGT plant. Interconnection with the grid would only be needed for black start of the plant.

shmerl• 1 year ago

Well, let data centers pay for the amount used. Rates shouldn't go up.

metadat• 1 year ago

https://archive.today/YElXD

windows2020• 1 year ago

Is nuclear the only way out? Will the gov need to get involved? Will wind and solar, etc., wind down after?

slumberlust• 1 year ago

While I'd love to see nuclear projects more, I can't imagine any AI companies investing in something with a timeline that far out.

croes• 1 year ago

I don’t get why people favor nuclear. It’s risky and its expensive.

more_corn• 1 year ago

The biggest value rooftop solar brings (aside from resilience against disaster induced power outages) is protection against rising energy costs. The 20year payoff calculation is AT CURRENT RATES. Which means the electric company can raise rates all they want. I generate my own so I don’t notice.

US utilities plot big rise in electricity rates as data centre demand booms

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