CleanLaw Ep 101—Who Will Pay for Data Centers’ Massive Power Bills? It’s Probably You.
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Mar 23, 2025 Eliza Martin, an EELP Fellow at Harvard Law School, joins Ari Peskoe to discuss the financial implications of data centers on utility rates. They unveil how tech giants like Amazon and Google negotiate attractive power rates, affecting everyday consumers. The duo highlights the hidden costs passed to residential ratepayers through opaque contracts and raises concerns about the expansion of infrastructure. They also examine the complex relationship between data centers and utility companies, particularly the environmental and financial challenges posed by co-location with nuclear plants.
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Data Center Growth and Utility Incentives
- Data centers' energy demands are significantly increasing, impacting the power industry.
- Utilities are incentivized to inflate growth projections as they profit from infrastructure investments.
Rate-Setting and Cost Allocation
- The public pays for utility growth through rate-setting processes determined by public utility commissions.
- These costs are allocated across consumer groups, theoretically based on the cost to serve them.
Duke Energy Case
- Utilities have a history of exploiting monopolies and misrepresenting costs.
- Duke Energy offered a large discount to a customer and shifted the cost to other ratepayers.