A Harvard Electricity Law Initiative report reveals that Big Tech's secretive electricity contracts with utilities for burgeoning data centers could significantly increase costs for average American consumers.
Researchers reviewed 40 special contracts, finding a lack of transparency prevents public scrutiny of potential cost shifts. With data centers projected to consume 12% of US electricity by 2028, up from 4% in 2023, the demand for new power infrastructure is immense.
While tech companies and utilities claim these deals cover all associated costs, the report suggests utilities might offer discounted rates subsidized by other customers. A Virginia study, despite finding appropriate cost allocation for data centers, still projected residential bills could rise by $14-$37 monthly by 2040 due to increased energy demand.
The analysis highlights how state regulators often approve these contracts with minimal public review, potentially succumbing to political pressure for economic development. The report advocates for stricter regulatory oversight, similar to Kentucky's rules, to protect ratepayers from "cutthroat" utility practices, citing an antitrust case against Duke Energy as an example of cost-shifting.
Big Tech’s Deals for AI Data-Center Power Present Accounting Questions(current)
Originally reported as: “Big Tech’s Deals for AI Data-Center Power Present Accounting Questions”
