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We Found the Hidden Cost of Data Centers. It's in Your Electric Bill [video]

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156 points xbmcuser | 4 comments | 04 Sep 25 12:33 UTC | HN request time: 0s | source
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taeric ◴[04 Sep 25 14:25 UTC] No.45127622[source]▶
This feels misleading to me.

I accept that data centers generate more load for a system. Which will make the overall system need more maintenance, which is something that others paying into the system will also have to support. But, I'm not clear on why this is a hidden cost.

Consider, if people get the new housing developments that they want, that would also add load to the system. This larger energy system will be more expensive to run, which will lead to higher costs. Adding houses would probably be even more expensive in the transmission maintenance costs associated.

Any model you do that tries to prevent this is essentially rent stabilization for early members. And that has a pretty good track record of not being a good idea.

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maxsilver ◴[04 Sep 25 15:21 UTC] No.45128295[source]▶
Homes also generate property taxes and sales taxes (from the occupants inside of them). Cities nearly always make money selling to new homes -- low density suburbs are highly profitable for municipalities, even on utilities alone, both initially and over a 40 year time period.

Data Centers do not work like this. They don't generate any new sales taxes, they don't really generate much in the way of new jobs, and they often don't even pay property taxes at all (our biggest data center here, for example, got a sweetheart deal on a massive property tax exemption -- they literally don't have to pay any property tax at all)

Data Centers also don't pay standard price for their power -- they get 'industrial' power rates (locally here, our industrial power rate is much lower than what a home would pay for equivalent kwh usage, even after factoring in transmission differences).

If you just charged equivalent access (if industrial users had to pay to-the-penny exactly the same prices as a residential user, identical transmission fees, identical per-kwh prices, identical time-of-day usage surcharges, etc), it would go a long way to making the data center setup more fair for everyone.

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1. taeric ◴[04 Sep 25 15:43 UTC] No.45128546[source]▶
Most data centers almost certainly pay property taxes, as well. It is still a deeded plot of land, after all? I'm curious what data center you know of that doesn't have to pay any. I know incentives are common, but they are usually tied to some other growth metric.
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2. ◴[04 Sep 25 15:54 UTC] No.45128677[source]▶
3. maxsilver ◴[05 Sep 25 12:42 UTC] No.45137845[source]▶
> I know incentives are common

I'd go further than common, I don't know any major data center built in the last 6 years that didn't get them. 36 out of 50 US states give away public money to privately owned data centers right now (see https://www.naiop.org/research-and-publications/magazine/202... )

It's not always property taxes (sales tax and/or use tax and/or waived utilities costs are also common). But property taxes are also waived in various cases.

> Most data centers almost certainly pay property taxes, as well. It is still a deeded plot of land, after all?

Not always -- they often waive property taxes too.

I'm told Nevada, West Virginia, and Wyoming all have waivers on property taxes for data centers specifically, and at least 12 other states (including Illinois, New York, Texas, and many others) also waive property taxes for data centers through indirect means.

Locally here, data centers get to skip out on paying 100% of their property taxes for 10 to 20 years. They do this by getting a county to label their property as a 'Renaissance Zone' (more commonly known as an 'Enterprise Zone').

Rules for that also vary. As one example, Connecticut has 'Enterprise Zone' distinction as well, but theirs is only an 80% tax abatement, and only for 5 years.

As you might imagine, this quickly becomes a race to the bottom, on which state is willing to give away the highest amount of public money to these private companies. See https://goodjobsfirst.org/enterprise-zones/ for more details.

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4. taeric ◴[05 Sep 25 14:17 UTC] No.45138890[source]▶
I don't know if I can get behind rhetoric like "further than common." It is just common. Period. And you can be opposed to it, just on principle. It would help me oppose if you showed places that were not seeing benefits.

I'm reminded of places like Alabama that would do massive incentives to Mercedes to build a production plant in the state. Again, I know many that opposed on principle, but they were a touch off balance when it came to the benefits that the state was getting from the plants.

And I agree it can be a bit of a race to the bottom, as it were. As things are, there is little to no evidence that that is the case. Building any large industrial building is a large construction project that alone will generate plenty of tax revenue to justify pushing off many taxes. Would it be even better for the localities to not? Yeah, but only if they could still get the build.