Are Data Centers to Blame for Rising Electricity Prices?

We can prevent data centers—or the next big energy demand—from spiking energy bills, but it requires acknowledging two fundamental truths. 

First, the costly failures of today’s grid lie in the overbroad monopoly powers that pit for-profit grid operators against the entrepreneurs and customers who can generate and manage clean electricity for themselves and others. Utilities can only block rooftop solar, for example, because they have a publicly granted monopoly over the poles and wires to which the arrays connect. 

Second, only breaking up for-profit utilities and removing the profit motive from electricity delivery can end the perverse incentives that drive for-profit utilities to abuse their market and political power. 

If we make local electricity distribution a public service, restructured utilities will profit only when they provide a valuable service, not just build a thing. Their proposed power solutions for AI data centers (or anything else) should have to prove as cost-effective as the energy provided by independent producers or networks of customers deploying local solar, batteries, and heat pumps. Like the federal government’s breakup of AT&T fifty years ago, separating the public function of running the network from the competitive function of supplying services (telephones and modems in the AT&T case, local solar electricity in the utility case) can unleash lower costs and innovations –– such as the original fiber optic network that birthed the modern Internet.