Data centers have hiked electricity prices on the public by $23B

A report by the organization that monitors the PJM market concluded that expected power demand from data centers was a primary reason for $23 billion in customer price increases that will last until at least the end of 2028, according to a published analysis. The PJM market encompasses all or part of 14 mid-Atlantic and Midwest states. The analysis states that many major tech companies have pledged to pay their fair share of costs associated with generating and transmitting more electricity to serve large data centers, but ratepayers across the United States are worried about potential costs they might have to bear. It is not immediately clear how the cost of data centers' energy will be calculated, and the effects of price increases are likely just beginning. Prices are set by state utility commissions, which determine which customers' rates will increase to pay for new investments in electricity infrastructure. The analysis describes the complexity of setting prices, noting that regulators identify costs to provide service, allocate costs to customers and design prices to recover those costs. Cost analysts review thousands of items to determine how each cost will be allocated. One common criterion is coincident peak demand, but data centers may be able to predict when system loads will peak and consume little to no power in that period to avoid contributing to peak loads. This flexibility means data centers may avoid paying costs allocated through coincident peak demand even if they use large amounts of electricity at other times. The analysis also notes that regulators do not always get a good sense of residential customers' voices, and consumer advocates may be barred by law from adopting a position on how costs should be allocated. If proposed data centers are not built or use less energy than projected, costs incurred by the utility company will be spread among all other customers.