It seems that big money can overrule local government regulators at will.
Here in Nevada, (Warran Buffet owned) NV Energy already has approval for a "Demand Charge" that will increase rates for everyone, and further reduce the ridiculously low amount of money that consumers get for selling their excess solar power back to the grid.
The regulators didn't even resist, but there has now been so much backlash that they're finally scheduling public hearings after the fact. The announcement doesn't even mention the Demand Charge by name, and many consumers aren't even aware they they're about to be screwed.
One of the more obscene things about this new charge is that people with PV arrays will pay a fee for demanding more power from their own grid-tied systems.
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.
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.
That's mostly incorrect. In Maryland, like in most places in the country, the distribution infrastructure is controlled by regulated monopolies that buy power on the market from generators. Your bills separate out the fees for usage and the fees for distribution, and the Maryland PSC has to approve both.
It's not clear from the article whether this is just datacenters -- or if that is just the convenient boogeyman.
The grid operator for the northeast, according to my Governor, has been well-behind in building out infrastructure. Of course new datacenters cause more load. But so do new houses (we're building as many as we can) and electric cars, etc.
There is so much FUD going around SPECIFICALLY about data centers lately, that i’m dubious of anything i hear. it’s such a weird cultural phenomenon. Chronically online teenagers on Instagram making increasingly incorrect and absurd-sounding claims about water / energy usage. Comparatively barely anyone knew what a data center was 1-2 years ago.
Yep. 10000 gallons per query, spews out toxic water, contaminates the water supply, uses more power than an entire state, and on and on. I'm convinced it's a psyop to prevent the US's progress in tech. It's so over the top crazy and obviously false, but everyone I know is falling for it.
I'll be the first to complain about Texas being on its own energy grid and the dumpster fire of resultant things that happen because of it, but it is worthwhile to call out that this sort of thing is not possible in Texas because of that.
Apparently not. Maryland residents didn’t sign any of these agreements in other states. Nor did their elected representatives. They were just presented with the bill to support the infrastructure in the other states because, you know, they’re so cool. And it doesn’t get any closer to the beltway than Maryland.
What’s crazy is the utility company admits that the infrastructure is for the growth in the other states. They admit Maryland won’t grow as fast. They concede Maryland needs less infrastructure. But still saddled Maryland residents with the extra bills for out of state data centers?
I mean, at least say it’s for Maryland. Just to make it look good? I don’t know? Make some kind of attempt to make it palatable.
I’m wondering if it’s just easier to pass the cost on to people in Maryland than it is in other states? Like is the regulatory environment with respect to this kind of thing more lax or something?
There has to be some kind of explanation. Because on the face of it, this just doesn’t look good. It makes ai and tech industry just seem like robber barons. And tech guys don’t need that right now.
We've been here before [1]. In that case, extra load on the grid meant the municipality needed to purchase more power (at higher prices), which raised everybody's prices.
Electricity supply is highly regulated. Prices for electricity are constrained and often set by state regulators. These are so-called "usage fees". But beyond that the utility is allowed to charge customers for infrastructure and transmissio and those fees are out of control. We recently had a court case where a North Carolina utility illegally overcharged customers but the judge didn't assign damages because legally the utility could just charge customers for those damages [2]. And the legislature passed laws to protect the utility as well.
This is going to get worse too because private equity is rapidly moving into this market and they know that capex can be entirely pushed onto customers with no recourse.
So the data centers tend to get sweetheart deals on electricity too. So while the total cost of electricity has gone up (per Mwh), they pay less pushing even more burden onto everyone else. Plus they get discounts on property taxes, energy tariffs and other taxes, as in the case of Kevin O'Leary's mega-DC in Utah.
But this state interconnect bill is another level of evil because it's pushing the costs onto states that have nothing to do with the data center and won't get any "benefit" (there is no benefit) anyway.
What we need are laws that make these projects pay for their own infrastructure. This might cause them to build near power sources. Great. Away from people, mostly.
The level of regulatory corruption here is actually sickening. Take Elon's Grok DC in Memphis that exploits local laws against clean air by using "mobile" gas turbines in the city of Memphis.
Funny how most people were complaining about lack of infrastructure spending before AI, now that the bills come due it's "WAIT! I'm paying for the thing I use!?!"
Are Americans really getting stickershock from $2B? Lets search some random numbers + "Maryland"
They invested $1B in quantum computing. Crickets.
$10B dollar purple line
$9B dollar missed pension returns, $3B directly to wallstreet hedgefunds POOF! (Explains why the stock market rises as the country takes on more and more debt)
The list literally goes on and on, probably over $30B of sunk costs into either nothing, planning or infrastructure that wasn't properly maintained.
>WBAL News Radio
>6 days ago — Congressman Andy Harris says the cost of the Key Bridge rebuild was
>nearing $10 billion, and that's the reason the state won't go forward
What's the traffic for this $5B-$10B bridge? 34,000.
America's energy infrastructure has been chronically under-invested for the last 60 years, widening the gap between young and old. All the articles talking about the cost of AI are written by entrenched forces that AI have already replace, their free money from infrastructure scams.
> most people were complaining about lack of infrastructure spending before AI
Presumably they'd like the infrastructure spending to go to infrastructure that improves their lives in some way. I somehow doubt that, when complaining, the vast majority of said people had in mind "let's spend hundreds of billions of dollars on datacenters while everything else crumbles".
But also, the price of grid upgrades are more and more often being passed directly to customers and you don’t really get a choice of whether or not you’re a customer.
Yeah, turns out people want things that benefit them and not things that exclusively benefit the billionaires who control AI.
I complain about not enough direct flights from my local airport, if they put in a bunch of direct flights for billionaires only I would complain even harder.
It seems that big money can overrule local government regulators at will.
Here in Nevada, (Warran Buffet owned) NV Energy already has approval for a "Demand Charge" that will increase rates for everyone, and further reduce the ridiculously low amount of money that consumers get for selling their excess solar power back to the grid.
The regulators didn't even resist, but there has now been so much backlash that they're finally scheduling public hearings after the fact. The announcement doesn't even mention the Demand Charge by name, and many consumers aren't even aware they they're about to be screwed.
One of the more obscene things about this new charge is that people with PV arrays will pay a fee for demanding more power from their own grid-tied systems.
https://www.nvenergy.com/publish/content/dam/nvenergy/bill_i...
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.
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.
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
That's mostly incorrect. In Maryland, like in most places in the country, the distribution infrastructure is controlled by regulated monopolies that buy power on the market from generators. Your bills separate out the fees for usage and the fees for distribution, and the Maryland PSC has to approve both.
Only allowed to charge “reasonable” usage fee means no other non-usage fee allowed or it is purposely designed to allow other kinds of fees?
https://www.nrdc.org/bio/jc-kibbey/utility-accountability-10... To be clear this only about some utility companies.
Perhaps utilities should be state owned where any profits are used to offset the tax load on the citizens..
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...
Kind of stuff that can radicalize a young family struggling to make ends meet...
It's not clear from the article whether this is just datacenters -- or if that is just the convenient boogeyman.
The grid operator for the northeast, according to my Governor, has been well-behind in building out infrastructure. Of course new datacenters cause more load. But so do new houses (we're building as many as we can) and electric cars, etc.
There is so much FUD going around SPECIFICALLY about data centers lately, that i’m dubious of anything i hear. it’s such a weird cultural phenomenon. Chronically online teenagers on Instagram making increasingly incorrect and absurd-sounding claims about water / energy usage. Comparatively barely anyone knew what a data center was 1-2 years ago.
Yep. 10000 gallons per query, spews out toxic water, contaminates the water supply, uses more power than an entire state, and on and on. I'm convinced it's a psyop to prevent the US's progress in tech. It's so over the top crazy and obviously false, but everyone I know is falling for it.
I'll be the first to complain about Texas being on its own energy grid and the dumpster fire of resultant things that happen because of it, but it is worthwhile to call out that this sort of thing is not possible in Texas because of that.
who is actually signing off on these agreements to build it, knowing the bill goes to the locals? seems openly shady
Those closest to the beltway…
Apparently not. Maryland residents didn’t sign any of these agreements in other states. Nor did their elected representatives. They were just presented with the bill to support the infrastructure in the other states because, you know, they’re so cool. And it doesn’t get any closer to the beltway than Maryland.
What’s crazy is the utility company admits that the infrastructure is for the growth in the other states. They admit Maryland won’t grow as fast. They concede Maryland needs less infrastructure. But still saddled Maryland residents with the extra bills for out of state data centers?
I mean, at least say it’s for Maryland. Just to make it look good? I don’t know? Make some kind of attempt to make it palatable.
I’m wondering if it’s just easier to pass the cost on to people in Maryland than it is in other states? Like is the regulatory environment with respect to this kind of thing more lax or something?
There has to be some kind of explanation. Because on the face of it, this just doesn’t look good. It makes ai and tech industry just seem like robber barons. And tech guys don’t need that right now.
It's for "the grid", of which Maryland is a part, so it supposedly derives some benefit.
And since the grid is being updated to accommodate new paying customers, Maryland will benefit from lower future prices. Right? Right?
We've been here before [1]. In that case, extra load on the grid meant the municipality needed to purchase more power (at higher prices), which raised everybody's prices.
Electricity supply is highly regulated. Prices for electricity are constrained and often set by state regulators. These are so-called "usage fees". But beyond that the utility is allowed to charge customers for infrastructure and transmissio and those fees are out of control. We recently had a court case where a North Carolina utility illegally overcharged customers but the judge didn't assign damages because legally the utility could just charge customers for those damages [2]. And the legislature passed laws to protect the utility as well.
This is going to get worse too because private equity is rapidly moving into this market and they know that capex can be entirely pushed onto customers with no recourse.
So the data centers tend to get sweetheart deals on electricity too. So while the total cost of electricity has gone up (per Mwh), they pay less pushing even more burden onto everyone else. Plus they get discounts on property taxes, energy tariffs and other taxes, as in the case of Kevin O'Leary's mega-DC in Utah.
But this state interconnect bill is another level of evil because it's pushing the costs onto states that have nothing to do with the data center and won't get any "benefit" (there is no benefit) anyway.
What we need are laws that make these projects pay for their own infrastructure. This might cause them to build near power sources. Great. Away from people, mostly.
The level of regulatory corruption here is actually sickening. Take Elon's Grok DC in Memphis that exploits local laws against clean air by using "mobile" gas turbines in the city of Memphis.
[1]: https://newsroom.haas.berkeley.edu/research/power-hungry-cry...
[2]: https://www.wcnc.com/article/news/local/no-refunds-for-duke-...
Funny how most people were complaining about lack of infrastructure spending before AI, now that the bills come due it's "WAIT! I'm paying for the thing I use!?!"
Are Americans really getting stickershock from $2B? Lets search some random numbers + "Maryland"
They invested $1B in quantum computing. Crickets.
$10B dollar purple line
$9B dollar missed pension returns, $3B directly to wallstreet hedgefunds POOF! (Explains why the stock market rises as the country takes on more and more debt)
The list literally goes on and on, probably over $30B of sunk costs into either nothing, planning or infrastructure that wasn't properly maintained.
>WBAL News Radio
>6 days ago — Congressman Andy Harris says the cost of the Key Bridge rebuild was
>nearing $10 billion, and that's the reason the state won't go forward
What's the traffic for this $5B-$10B bridge? 34,000.
America's energy infrastructure has been chronically under-invested for the last 60 years, widening the gap between young and old. All the articles talking about the cost of AI are written by entrenched forces that AI have already replace, their free money from infrastructure scams.
> most people were complaining about lack of infrastructure spending before AI
Presumably they'd like the infrastructure spending to go to infrastructure that improves their lives in some way. I somehow doubt that, when complaining, the vast majority of said people had in mind "let's spend hundreds of billions of dollars on datacenters while everything else crumbles".
I think the point is “out of state”.
But also, the price of grid upgrades are more and more often being passed directly to customers and you don’t really get a choice of whether or not you’re a customer.
you should read the article before commenting
Yeah, turns out people want things that benefit them and not things that exclusively benefit the billionaires who control AI.
I complain about not enough direct flights from my local airport, if they put in a bunch of direct flights for billionaires only I would complain even harder.
Wait, you also agree that state and federal elected officials waste absurd amounts of money? Regularly? With no consequence?!
Was your comment trying to normalize this, or blame citizens?
I suspect people would want to spend money on infrastructure that benefits them, and not a multi trillion dollar company.