Utility providers won't build fiber connectivity to homes and make massive profits ($50+/month), but they'll build unnecessary infrastructure for AI DCs and make people pay for it. As long as we do things to serve the super rich, everything is okay.
thelastgallon
This $23B number that gets thrown around is not the increase to the public. The wording in the referenced report is
> Based on actual auction clearing prices and quantities and uplift MW, inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenue for the 2025/2026 BRA, the 2026/2027 BRA, and the 2027/2028 BRA of $23,100,955,341.
This is the increase in revenue to PJM from adding datacenter customers, and includes both the amount that datacenters paid as well as the amount that other customers paid due to higher prices from datacenters. So Fortune calling it an increase to "the public" means that they didn't read the report they are using as their source and are probably just repeating what they thought someone else meant.
Bloomberg in the past worded it as "data centers will add at least $23 billion to customer bills" in April and "added a minimum of $23 billion to customer bills" in February. Which while technically correct (datacenters are customers) seems meant to be misleading. And now that's the number that's getting thrown around as the increase to "the public".
The part I don't get is that the journalists could just give the actual number for the quantity that they are referring to (the amount that non-datacenters paid due to higher rates due to datacenter loads): when I calculated it a few months ago I think it was something like $16 billion rather than $23 billion. I feel like the story would have the same impact if the headline number was $16B as $23B, but $16B has the benefit of not being a misrepresentation of the situation.
---
Also I would definitely recommend checking out the PJM BRA report. It's a bit dense but not too hard to follow, and my personal takeaway was that the PJM market is just very dysfunctional and they are blaming the datacenters instead. I thought SemiAnalysis had a good analysis of it: https://newsletter.semianalysis.com/p/are-ai-datacenters-inc...
kmod
> But what if the power company needs to upgrade the substation to handle the increased needs of the data center? Or secure additional sources of electricity? In these cases, the investments are part of the electricity grid that everyone uses. These costs will likely be shared among all customers.
Okay but this is a policy choice. It doesn’t have to be that way.
m-hodges
It's important to ground the increase in raw numbers.
The total revenue for electricity generation was $514b in 2024. So this was a 4-5% increase in costs. And if it is being invested in better generation and our aging infrastructure, that seems fine.
anubistheta
This just isn't true. On balance, data centers are turning out to be more like the "anchor tenant" of the power grid, financing improvements for everyone.
Personally, some of my electricity bills will soon be rising because of changes to how rates are computed. The added "demand charge" will penalize customers that have variable loads, while benefiting data centers with relatively constant loads.
Also IMHO, we are building way too many data centers right now. It reminds me a lot of the Y2K dot.com crash, and all of the residual dark fiber.
I spotted this article today that claims it's all in our imagination.
Isn't this the classic overcapacity leads to lower prices that also represses investments that would increase capacity. But those lower prices also stimulate new demand that lead to higher prices...which then motivate investments that increase capacity?
Perhaps I'm just spoiled because I live in the PNW, where are best use for overcapacity was to ship power off to California. But in the past, cheap hydro attracted aluminum production that then attracted also attracted a whole airplane production industry.
I think most people are just debating whether the extra demand generated by AI is worth it, they weren't necessarily debating the same thing when it came aluminum or airplane production (albeit in the 1930s).
seanmcdirmid
What is the increase in jobs/GDP for those communities that have paid more in electricity? A lot of these data centers are built in places with declining population and zero economic prospects for locals within their communities so they're a huge boon.
MaxHoppersGhost
Failures to allow faster generation/hookup rollout have suppressed supply increase relative to demand increase
russellthehippo
Isn't this the same as saying "utility regulators delaying connecting new power to the grid hiked electricity prices on the public by $23B?"
When my apples are expensive, I don't generally grumble about all the demand from pie makers. If they demand more apples, new suppliers should come in to restore the price, right?
comments (10)
thelastgallon
> Based on actual auction clearing prices and quantities and uplift MW, inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenue for the 2025/2026 BRA, the 2026/2027 BRA, and the 2027/2028 BRA of $23,100,955,341.
This is the increase in revenue to PJM from adding datacenter customers, and includes both the amount that datacenters paid as well as the amount that other customers paid due to higher prices from datacenters. So Fortune calling it an increase to "the public" means that they didn't read the report they are using as their source and are probably just repeating what they thought someone else meant.
Bloomberg in the past worded it as "data centers will add at least $23 billion to customer bills" in April and "added a minimum of $23 billion to customer bills" in February. Which while technically correct (datacenters are customers) seems meant to be misleading. And now that's the number that's getting thrown around as the increase to "the public".
The part I don't get is that the journalists could just give the actual number for the quantity that they are referring to (the amount that non-datacenters paid due to higher rates due to datacenter loads): when I calculated it a few months ago I think it was something like $16 billion rather than $23 billion. I feel like the story would have the same impact if the headline number was $16B as $23B, but $16B has the benefit of not being a misrepresentation of the situation.
---
Also I would definitely recommend checking out the PJM BRA report. It's a bit dense but not too hard to follow, and my personal takeaway was that the PJM market is just very dysfunctional and they are blaming the datacenters instead. I thought SemiAnalysis had a good analysis of it: https://newsletter.semianalysis.com/p/are-ai-datacenters-inc...
kmod
Okay but this is a policy choice. It doesn’t have to be that way.
m-hodges
The total revenue for electricity generation was $514b in 2024. So this was a 4-5% increase in costs. And if it is being invested in better generation and our aging infrastructure, that seems fine.
anubistheta
Overview article with links to actual studies: https://cityjournal.substack.com/p/data-centers-arent-raisin...
jbellis
Also IMHO, we are building way too many data centers right now. It reminds me a lot of the Y2K dot.com crash, and all of the residual dark fiber.
I spotted this article today that claims it's all in our imagination.
https://www.city-journal.org/article/data-centers-arent-rais...
anonymousiam
Perhaps I'm just spoiled because I live in the PNW, where are best use for overcapacity was to ship power off to California. But in the past, cheap hydro attracted aluminum production that then attracted also attracted a whole airplane production industry.
I think most people are just debating whether the extra demand generated by AI is worth it, they weren't necessarily debating the same thing when it came aluminum or airplane production (albeit in the 1930s).
seanmcdirmid
MaxHoppersGhost
russellthehippo
When my apples are expensive, I don't generally grumble about all the demand from pie makers. If they demand more apples, new suppliers should come in to restore the price, right?
ddp26