An interesting paper (https://eelp.law.harvard.edu/extracting-profits-from-the-public-how-utility-ratepayers-are-paying-for-big-techs-power/) that highlights a pressing issue – under the immense demand and timing pressure from hyperscalers – utilities are leaning on existing rate designs that are prone to transferring some of the data center costs onto ratepayers. The scale and impact of this situation cannot be overlooked – as datacenters are projected to consume 12% of the total US electricity demand by some estimates.
Data center contracts are competitive and confidential, hence there is not enough daylight to fully reveal the hidden subsidies the ratepayers are bearing. In RTO/ISO markets – like PJM, cost allocation becomes even more challenging. While the authors call for greater regulatory scrutiny to safeguard customers, regulatory agencies often lack the resources necessary to swiftly manage the volume of cases, which makes litigation and other roadblocks inevitable.
Utilities would be better served by taking a proactive stance in addressing rate and affordability implications to mitigate these risks.
