Submitted 10 hours ago by Zerlyna@lemmy.world to nostupidquestions@lemmy.world
I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
The same way you pay more for gas in summer or when the economy is doing well: demand is higher so prices go up.
Don’t forget that when the bubble pops companies holding the bag will be trying to recoup their initial capital so the price won’t go down.
I’m not sure about that. The way I see it, there will be more supply for the below-expectation demand, which would make prices go down
When there is a finite amount of something and someone with more money wants it, it makes the price of it for everyone go up to make it so that some people can no longer afford to compete for the resource, making it available for the higher spender.
Same thing with land & property on it, the working class can’t afford to buy housing now, because rich people want to use housing as an investment vehicle.
Food is another
Ultimately it’s the same problem across the board and the only solution is a wealth tax to prevent densely concentrated capital from distorting the market
This is the part where I tell you that residential electricity costs are higher to subsidize commercialized electricity!!
Or is it building the infrastructure to accommodate them the issue?
It’s this, but that’s only part of the story.
Datacenter companies are very efficient at building new ones now, once they have all the proper permits and can start building it can go from an empty lot to fully functional in a year or two. Maybe longer for the huge hyperscalar ones.
Once they are online, their power demand is comparable to a small city, coming online all at once. But the local utility never had this demand in its plan, so they have to build more capacity to service it, and building a new power plant takes much longer. In the meantime, the demand will outstrip their capacity and the utility will have to buy more power on the open market. This drives up costs for all their customers unless the utility is allowed to charge these customers more.
As a side note, they often get advantages and tax breaks because they promise to bring jobs to the area. And the initial construction jobs usually are significant. But once the place is built, it’s ongoing operations only requires a few dozen positions, many of them low-tech and outsourced like site security. The higher-tech jobs (like the network engineering) is often not on-site anyway. A shopping plaza would generate more jobs than a datacenter.
It’s worse than that. While the power company starts making plans for the additional load that’s already there, datacenter developers bring in gas turbine generators. This adds to the noise and pollution. The local municipality may fine them a few hundred dollars a month for violations, but that’s the cost of doing business.
Why would the companies pay the bill? What are we gonna do, not have electricity or go use the other company that either doesn’t exist or is raising rates for the same reason? Folks like you are just now noticing that this whole system is a scam, but unfortunately the time for action was 30 years ago.
Conversly, accorsing to most of these responses it sounds like if your nearby data center were to mysteriously vanish, your electric bill would go down.
Take with a grain of salt, but I’ve heard it’s not the AI data centers it’s actually all the cuts from the trump admin to green energy projects
Republicans.
ProfessorScience@lemmy.world 10 hours ago
Its supply and demand. The AI data centers are paying their electric bills, but at the same time they represent a significant increase in demand for electricity, so electric companies can raise their prices.
gedaliyah@lemmy.world 2 hours ago
Yep. It’s the same reason everyone has to pay more for RAM now, even though consumers didn’t cause the shortage.
Telemachus93@slrpnk.net 9 hours ago
Expanding on that: in competitive electricity markets, in theory, total demand is met by the cheapest plants (by “marginal price”: how much does an additional unit of electricity cost?) that are available.
The marginal price of PV, wind and hydropower is pretty much zero.
The next cheapest are usually older nuclear fission plants and coal power plants.
Then is a huge gap and then come newer nuclear plants and gas fired power plants.
But all of these plants aren’t built over night. So maybe before all of the datacenters, total demand may have mostly been met by renewables and coal and gas power plants only operated a few hundred hours per year. Now, total demand rises and those plants need to operate more often. That’s why the prices rise just because of demand increase. Other effects (e.g. changes in regulation, corporate greed, …) might be at play as well.
snooggums@piefed.world 9 hours ago
Sure, but the companies driving the increased demand should be paying for the increased capacity directly instead of having the general public subsidize it.
yesman@lemmy.world 9 hours ago
This bears repeating. Datacenters do have to pay the light bill. Even when the VC money dries up. It’s a beautiful thing.
gedaliyah@lemmy.world 2 hours ago
Naw, they’ll just declare bankruptcy and the municipalities will foot the bills for the infrastructure debt.
Basically, have you even seen the Simpsons monorail episode? It’s that.