On this note, I'm actually confused about why datacenters raise electric costs. Why doesn't the data center bear an extra cost for the added infrastructure?
If I build a house on undeveloped land and the electric company needs to run lines, do I also (in a much smaller way than a data center) increase the costs for all other customers? Is everything always just spread evenly?
Your house goes through different approval processes than large infrastructure processes. You also pay a different rate than commercial customers.
Energy hungry infrastructure projects pay something called a "large-load tariff" to try to contain their second-order costs from leaking into residential rate payers pay for. It's not perfect, so a datacenter project could trigger some upgrades that cause rates to go up.
The situation is confusing everyone right now because it's impossible for the average person to tell why rates are going up. A lot of utilities are doing things like finally addressing old fire-prone infrastructure (see the California fires) and dealing with inflation for everything from their generation input costs to inflated costs for infrastructure to putting straight of Hormuz-inflated gas in the tanks of their fleet. Customers only see that their rates are going up and AI datacenters are on the news, so they put them together and assume datacenters are to blame for everything. Yet rates are spiking even in places with zero datacenters.
The topic has entered the domain of emotionally charged topics so nuance is hard to come by. Many of the anti-datacenter people are against datacenters as a proxy for their hatred of AI and the electricity and water arguments are just convenient justifications. This is how we arrive at the article.
> rates are spiking even in places with zero datacenters.
The energy grid is largely interconnected in the US. Just because there arent any datacenters in your state doesnt mean anything because the ones in the next state over could be on the same grid. End of the day prices are about supply and demand, same as always. When a huge amount of demand is added and supply is unchanged prices will go up.
> Why doesn't the data center bear an extra cost for the added infrastructure?
In some states (like Oregon and Virginia) they do, but in a lot of states the regulations for rate structures are flat among all users so when there's a large surge in new demand the utility will build out new capacity and spread the cost of that new capacity to all rate payers with no regard for the fact that the new capacity would not have been needed without the new demand (from data centers). So everyone who was already using the electricity pays the new higher rates along with the new large-load user.
These companies building data centers will often make a lot of PR statements about how they are fine paying the extra cost for extra use while at the same time lobbying behind the scenes to actually avoid that happening and fighting against changes to utility rate structures that would raise their costs. By and large they can't be trusted.
>I'm actually confused about why datacenters raise electric costs
electrical supply is not infinite. datacenters have high electrical demand. more demand + same supply = increase prices.
>Why doesn't the data center bear an extra cost for the added infrastructure?
the problem is that added infrastructure is not built instantaneously. it lags behind. so costs will be high until more supply-side infrastructure is in place.
i agree that there should be some sort of stipulation that when you build your mega datacenter that you also have to build out electrical infrastructure at the same time. but unfortunately, that is not how it is.
Thanks, that's really useful. I guess in my head I had the impression that costs could potentially be static. eg: if you had 10 customers total, each needed to pay $1 to generate electricity to serve their needs. So when you scale up to 100 customers, you can still have everyone pay $1 and come out to the same place.
I totally get the general principle that not everything scales linearly like that. But, I also know very little about electricity generation, so I have no idea where the breakpoints are. (I would also guess that if the demand dips low enough, there could be a case where after decreasing costs for a while, costs actually start to rise again as there is some minimum infrastructure needed but fewer customers to bear the cost.)
This is basically just the normal dynamic with American tax law where tax jurisdictions are terrible at coordinating, so they end up approving things and agreeing to tax things at a very low level in order to win the competition. Even when states/counties try to work together on this stuff there's a huge defector problem, like "hey I can back out of this multistate tax compact agreement and get 500 new jobs which will let me win local reelection".
I suppose you can reduce a lot of both good at bad things about the country to "because federalism".
But it's a circular problem. The price wouldn't be exorbitant if these rural areas were left to their own devices. But their utility build outs must be done per rules passed at the behest of the richer urban areas.
We're dealing with this bullshit in my own city in another state. From the parks to the roads to the sidewalks to the library every goddamn thing we touch gets driven up to the point of "can't actually do what we wanted" in cost because some rich assholes 100mi away in the vicinity of the capitol have taken a "build it fancy and rich or don't build it at all" attitude and enshrined that in state law and rules.
Sometimes they'll be so kind as to eat part of the cost with state grants, as long as we sell our freedom away in other ways.
Rural power was always expensive, but now due to wildfire risk, it needs to be ruinously expensive. It's not for the benefit of the cities, and driven by corporate risk management.
But not ruinously so? What changed? The rules (both public and private).
> It's not for the benefit of the cities, and driven by corporate risk management.
Which is driven by laws and courts and precedents and best practices and recommendations and beurocratic rules that come from where?
Regardless this has nothing to do with city and everything to do with rich and out of touch.
I'm sure PG&E would be happy to build worse stuff if they weren't sticking their neck out by doing so.
Kind of like how my city would be happy to simply replace it's infrastructure but the state will take a bunch of money away elsewhere if we did that. Of course, if we weren't paying the state taxes we could afford it from scratch ourselves but I digress.
> If I build a house on undeveloped land and the electric company needs to run lines, do I also (in a much smaller way than a data center) increase the costs for all other customers?
In some sense, sure, any time you buy something you apply some upward price pressure. Of course, whether the resulting price changes measurably depends on many things, like the scale of your purchase relative to the scale of the market, the price elasticity of demand, who the marginal buyers and producers are, etc.
In many cases, I'm sure they are paying the cost of the added infrastructure. However, the increase in electricity costs come from having overall more electricity demand than before the data center was built. An increase in demand raises the cost for everyone.
In many places there is little excess capacity. Many protesters know that their electricity prices, like gas prices, will soar and price them out of AC.
First, increased demand drives increased prices. This is the least controversial axiom of modern economic theory. So if you add a huge power consumer to a market, all consumers in that market will have to pay more. You can mitigate that some if that new, big consumer builds their own power facility, but the fact still remains that the local price in fuel (oil, coal, etc) or materials for renewable generators (turbins, solar panels, etc) will increase. Again, because demand increased.
Second, its one thing for things to cost more in a market that has a booming economy and plenty of high paying jobs. Home prices in the Bay Area are horrifying, but the poverty line for a family of 4 is $80k, which sort of grounds things. If energy costs go up by $100/year in the Bay Area, nobody notices. But if energy costs suddenly skyrocket in Great Falls, Montana (poverty line for 4: $33k) or similar that lacks a vibrant economy, the residents don't have much choice but to tighten their belts over the suddenly larger electric bill that has done basically nothing to actually revitalize their economy.
Nah, there'll be a lot of people who think they know what happened and there'll be one person someone at BO who really knows what happened they just don't know they know it yet. In the course of the analysis that person will hear a couple of known facts and there will be feeling in the pit of your stomach when all doubt goes away. Worst case scenario is that it's something they signed off on.
I hear what you're saying but ... clearly SpaceX has made some broad technical decisions - I'm think of using metholox or making starship out of steel or falcon first stage re-usability - that seem to have been the correct choice.
I doubt Musk originated these idea but he was the one who ultimately made the decision on them. There were a lot of other people who had the same choice and either didn't come down that way or took a lot longer to come to the same place.
Like I said, genius? I personally wouldn't use that word. He's not an idiot though. He might be the minimum viable product for technical knowledge combined with a large amount of money but that's still pretty remarkable.
The whole reason for this was because of SS's supposed strength under the heat of reentry. Yet they now need to cover the whole thing in thermal insulating tiles. So I wonder if a composite Starship would not have been a better decision?
No one looks at money that way. If it were I'd find a million dollars under the seat cushions of the couch that Bill Gate's owns. No one is so flaked out they don't know that a 100 grand is a nice chunk of change or what the costs of staying vs. moving are.
I worked with a guy who had an internship studying the effects of some drug on rats. He said he didn't have much of a problem killing the rats but also claimed that he knew his dog realized what he was up to at work.
It made me think he might have had more of a problem with it then he thought.
Any mention of typesetting should work to include Mark Twain's quote about his relationship with the inventor James Paige, who worked on a never quite working as well as could be wished typesetting machine that Twain invested heavily in.
"Paige and I always meet on effusively affectionate terms; and yet he knows perfectly well that if I had his nuts in a steel-trap I would shut out all human succor and watch that trap till he died."
Instead of a ban just make sure they pay what's needed to keep capacity where it needs to be.
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