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

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.

It's a matter of scale and efficiency. Housing also adds (full-price) customers new taxpayers. A major problem with housing development is that low density (e.g. single-family zoned suburbs) are net-negative contributors. (But this effect is primarily seen with infrastructure like roads)

> Any model you do that tries to prevent this is essentially rent stabilization for early members.

The problem with datacenters is twofold:

1) It's a demand-shock. Because of the rapid rollout of datacenters, energy production and transmission capacity simply can't scale up. This causes prices to spike locally.

2) 'Industrial' electricity like this tends to pay very cheap rates, leading to residential electricity customers subsidizing them. Especially as such industry tends to be given high tax & other incentives.

> 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.

A question here is whether or not we're in a datacenter construction bubble. (To anyone who says we're not: Nvidia's stock price has soared more than Cisco's during the dotcom bubble.)

If you're in charge of a major electricity company, are you going to sign off on major expansion investments right now, knowing that it will take 5-10 years?

A lot of these datacenters are not owned and operated by Big Tech itself, but instead disposable companies like CoreWeave. If there's a bubble, it'll pop, and these companies will just go bankrupt. The power purchase agreement'll be worthless then.

That is, it is specifically the transmission and distribution network that is driving costs increases. Per the crappy AI answer "Electricity distribution costs now often exceed the cost of electricity generation for U.S. utilities, with transmission and distribution (T&D) costs potentially comprising over half of a customer's energy bill, up from about one-third previously."

I should say, I have no problem thinking data centers may need to pay more. If only because they are probably able to. My assertion is just that it is misleading to pin them as THE reason costs have gone up. It is far more complicated than that.