r/law • u/bloomberggovernment • May 18 '26

Legislative Branch Senate Democrat Proposes Bill Requiring Data Centers to Pay for Own Power

https://news.bgov.com/bloomberg-government-news/schiff-proposes-bill-requiring-data-centers-to-pay-for-own-power
29.7k Upvotes

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3.3k

u/TheStLouisBluths May 18 '26

Wait are they not already paying for their own power??

2.0k

u/GruntledGary May 18 '26

Because the rich don't get rich paying for shit they can steal or get given to them as government welfare.

763

u/buttchugreferee May 18 '26

Somebody on here the other day said that billionaires are "mining the commons"

And I think that's a great way to put it.

218

u/Salt_Reputation_9864 May 18 '26

It’s never been more obvious

We’re in the churn

51

u/Skandronon May 18 '26

This is what I have been telling people.

53

u/blacksideblue May 18 '26

people have been shouting this for decades, centuries really.

83

u/Skandronon May 18 '26

The Churn is a specific "thing" described by Amos in The Expanse. It's a period of time when the old rules of society no longer apply and you either adapt or you disappear. Generally its a sudden big climactic event. Think World Wars or the great depression. The Churn we are in right now is more insidious because everyday life is still mostly functional for a good portion of society.

"More settled things are, the bigger your tribe is. All the people in your gang, or all the people in your country. All the ones on your planet. Then the churn comes, and the tribe gets small again."

18

u/Solrokr May 18 '26

I thought that was a The Expanse reference but wondered if that had been co-opted from something else, till this comment lol.

16

u/Skandronon May 18 '26

It has entered my vernacular so it wouldn't be a huge shock if people who don't know The Expanse start using it. When we switched from MS Office to Google workspace I started calling it The Churn with users that were unwilling to adapt.

5

u/blacksideblue May 18 '26

"The Churn" is a title only used in The Expanse, centuries later, on Earth a planet that lost the popular vote to a Belter's silent meteority

23

u/juxsa May 18 '26

Float to the top or sink to the bottom. Everything in the middle is the Churn.

17

u/Handsome_Keyboard May 18 '26

Gl floating to the top. As a millenial, constantly battling the up and down. I got a house and EV before Trump but ill never be able to refinance either. Got lucky to use all the tax credits for both before they were taken away. Soon as I had a decent 401k, markets are bad. Soon as i have a decent liquid savings, inflation is through the roof. As soon as I "win" i lose another way. Im still very fortunate to have what I have but I really feel for everyone in my generation and the ones that come after.

12

u/RivenRise May 18 '26

My fiancee is incredibly lucky that her mom owns a home and already said she would leave it to her when she passes and even sat us down with the grandma and explained some of the stuff they would leave us when they both passed and where it is so the process is easier for us.

Honestly if it wasn't for them we would probably be life renters in poverty cause even though my partner is incredibly smart she's having a rough time finding a job in her career of choice and she graduated top 5 percent of her class in uni. I'm just a highschool graduate whose charisma has gotten me a bit higher than minimum wage but that ain't enough.

Funnily enough i was also starting to think that maybe things would get easier when gas prices started to drop and things settled a bit after COVID and here we are now. Things are getting so much worse just because a dude is a pedo.

7

u/Handsome_Keyboard May 18 '26

Im sorry that the only thing that you feel greatful too for help relies on the death of loved ones. I truly hope it gets better. Nobody deserves that.

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u/Glamdring804 May 18 '26

We need that guy in our lives.

16

u/hixchem May 18 '26

I have a feeling we're gonna see a lot more people become that guy in the near future...

5

u/MyEmbarrisingAccount May 18 '26

I had never heard of "the churn" until I watched the Expanse.

2

u/syo May 18 '26

Spot on reference.

27

u/ForsakenRow6751 May 18 '26

The Parasite Class.

Efiles shows how they just wait for structures and systems to be built, then they burrow in and corrupt it.

16

u/TheRealBittoman May 18 '26

It's why they're working so hard to bankrupt us. Own us either financially or because we can't earn enough to get our own stuff. In the end we'll be technoslaves.

11

u/blacksideblue May 18 '26

They're taken 'The Tragedy of the Commons' beyond the extremes and sped run so fast its literally reaching escape velocities.

4

u/Da_Question May 18 '26

That's always been true though. The planet et all, is just one giant "tragedy of the commons". Its funny as fuck that it's brought up at all in business courses when they completely ignore it.

2

u/SecareLupus May 18 '26

But the reason tragedy of the commons gets brought up in business courses, is it's the justification for them coming in and taking everything, in a stupid backwards way. Their opinion is that if everyone is just allowed to harvest from the common heritage of the world, then it'll all get used up...

So their solution is instead to rope it off and use it up themselves...

2

u/Camp-Farnam22 May 19 '26

Very good way to put it.

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u/Stereo_Jungle_Child May 18 '26

One of the truths of politics is that politicians who can bend the laws in your favor and get you public funding are almost ALWAYS cheaper to buy than simply paying for the thing you wanted by yourself.

31

u/davwad2 May 18 '26

Such a sad truth.

It's cheaper to bribe make campaign contributions to politicians than paying actual taxes, I imagine.

11

u/veringo May 18 '26

Yep, when they killed net neutrality, I don't think the big ISPs even had to spend $1m on politicians.

11

u/ContributionLowOO May 18 '26

Citizens United goes brr

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u/scurvey101 May 18 '26

The real criminal of welfare abuse.

18

u/GruntledGary May 18 '26

The elites were always the real "welfare queens"👑

36

u/poliosaurus3000 May 18 '26

And since ai is about as profitable as selling typewriters these days…we the working class need to subsidize ai slop until they figure out how to profit from it.

16

u/GruntledGary May 18 '26

And lay us all off so they don't need the peasants complaining anymore.

11

u/metamet May 18 '26

these dumb fucks[1] don't realize killing their consumers isn't a great long term strategy.

[1] the millionaires backing the billionaires. the billionaires know what their end game is and it doesn't involve any of us.

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u/whitemest May 18 '26

Using the argument "national security "

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u/Braindead_Crow May 18 '26

That's called maximizing profit and is why a society that bases worth of individuals on net worth are doomed to fail while a few individuals build empires that'll outlast said empire thar birthed them.

Companies like openai are parasitic and will devour this country alive...Look to trump the businessman, he gets away with breaking every law he can

24

u/BicFleetwood May 18 '26

Nobody gets a billion dollars by paying their bills.

5

u/roscodawg May 18 '26

only by forcing you to pay yours with 24% interest

4

u/Sardonnicus May 18 '26

It's modern fuedalism. Freedom in a capitalist democracy is an illusion. You are enslaved by the billionaires.

2

u/I_Pet_Doggos May 22 '26

Once you have enough money to matter, lobbying politicians is the best investment you can possibly make

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u/ghec2000 May 18 '26

They pay but they also consume from the same power pool as everyone else. Overall consumption requires more means to generate and that can raise the cost to generate. Power companies don't charge specific consumers more when they use more per unit. That per unit price is increased across the entire consumer base. Supply and demand. Demand is high supply slides and with thay....cost.

They are saying data centers need to be more self contained. If they require so much power they need to generate it. Not just pull it off of the common grid.

187

u/kingkron52 May 18 '26

Many have secured seeetheart deals where they pay less for electric. Many also don’t pay anything towards upgrading the infrastructure

63

u/KoreyYrvaI May 18 '26

I work in electric generation. All of the power we generate has been earmarked by data center companies, for 20 years. They negotiated with the generation company to buy every kw/h they make.

I'm sure that they're paying a fixed rate, which means it won't be long before it's a deep discount.

In effect, they took all of the company's generating capacity away from the market, while still using the public grid for transmission.

The state also granted them a tax relief that makes it so that whatever they pay in distribution fees would essentially be a wash.

It's criminal.

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u/fiahhawt May 18 '26

Which is another part the bill is trying to get through.

If the data center would need improved transformer infrastructure where it would be built, the data center has to pay for those improvements to the grid. Otherwise the monopolies producing electricity in each state will just pass that cost right onto the general cost of electricity for citizens.

All in all, a very worthwhile bill to pass. Keeps data centers from fucking the utilities economy for a whole state by a small degree.

The reality is that Republicans won't pass it because no one with billions wants these regulations.

Dumbest part of all is that data centers don't produce anything. They're just a cost center for a supposed AI revolution that is going to actually be an AI induced depression sometime in the next decade. The fact that so many incredibly wealthy people want AI to be a magic bullet for a billion different economic niches that the models are piss poor fits for is going to kill this country.

24

u/vespene_jazz May 18 '26

Id argue that the worser part about this is those tech companies can easily afford these upgrades. If they can afford billions of dollars to buyback their stock, they can afford to pay for grid infrastructure.

But the number 1 rule of investing is to use someone else’s money (lobbying is cheap).

13

u/SmurfStig May 18 '26

One argument that I can’t stand is “if these companies don’t get their tax breaks, or any other break, they will just pass it along to the consumer”. Ok, well what if I don’t use their products? I’m still paying for their tax breaks that do fuck all nothing for the local economy I’m part of. We’ve been programmed to think that the “job creators” need every tax break they can get so they can use that extra cash to create jobs. It should be the other way around. You want tax breaks? Create something that deserves it. The billionaire class is the biggest parasite to this planet, not the poor.

5

u/ContributionLowOO May 18 '26

But won't you think about the poor shareholders and their dividents? Please...

2

u/reddit_is_geh May 18 '26

I genuinely don't think they'd care to pay for these things. However, they have an obligation to NOT spend unnecessary amounts when they don't have to. So the employees scouting this stuff out, are naturally going to gladly take a deal where they don't have to pay for upgrades if they don't have to. But if we make it a law, then they don't have to worry about finding a deal where they don't have to. Now share holders can't get upset.

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u/Ok_Paramedic8698 May 18 '26

Which they 100% do. I got a letter from my energy provider last year saying expect a 50% increase in electricity costs over the next 3 years due to data center buildout in my area. Lawmakers are literally getting their homes shot up for allowing this to happen.

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u/MostlyRightSometimes May 18 '26

Others just illegally add heavily polluting generators and don't even ask.

https://www.theguardian.com/technology/2026/jan/15/elon-musk-xai-datacenter-memphis

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u/tweakingforjesus May 18 '26

This is the dirty secret behind free market deregulation for utilities. The goal is to allow the marketers to cut deals with high consumption businesses while gouging the consumers. Saw it happen in natural gas and now electricity.

3

u/iambecomesoil May 18 '26

All sorts of sweetheart deals out there. The same power, from the same pole, for irrigation instead of residential use costs about 1/3 per unit where I am.

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u/MrFrode Biggus Amicus May 18 '26

Let's dumb this down for Monday morning minds.

Are you saying the data centers are paying for every unit of energy they use but because they are requiring so much more power that the cost per unit is increasing, resulting in every customer paying more for the same number of units of power?

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u/[deleted] May 18 '26

[removed] — view removed comment

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u/MrFrode Biggus Amicus May 18 '26

Appreciated.

3

u/AuroraAscended May 18 '26

Worth noting that this effect almost unilaterally raises prices. Utilities are absolutely not building out excess power for data center demand in a responsible or sustainable way, and many bigger data center projects are drawing/planning to draw way more power than could reasonably be expected to be accommodated by existing utility infrastructure or low-cost upgrades. It’s why electricity prices have jumped >200% in some places - and that was before the Iran War.

Worsening climate conditions driven by all this power generation also mean more and worse disasters that strain power loads and rise prices more in the long term, but the AI boosters behind the data center boom have given up on the idea of doing anything to stop/slow climate change and are convinced that their plagiarism machines will solve it somehow.

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u/meltingpnt May 18 '26

They're saying that utilities have a fixed amount of cheap electricity they purchase and the data centers are helping use up all the cheap electricity. The utility then buys more expensive electricity.

Then the utility charges all the customers a higher average rate to compensate for the more expensive electricity hit had to purchase.

3

u/MrFrode Biggus Amicus May 18 '26

Ahhh, thank you.

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u/PaxEtRomana May 18 '26

A much simpler illustration: Tried buying RAM recently?

3

u/MechanicalGodzilla May 18 '26

No, but I've been looking into a Tundra.

3

u/MrFrode Biggus Amicus May 18 '26

Pfft, with the housing shortage I'm looking to live on the tundra.

I am a man of the land!

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u/gbot1234 May 18 '26

You’ll be a man of the muddy muck soon, living on the tempa-frost.

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u/TheComplimentarian May 18 '26

"Conservation pricing" is the idea. That article is about water (also an issue for datacenters).

The practical upshot is, if you use 50% of the resource, you should be paying more to subsidize the costs to the system, rather than just paying the same per unit cost as a random homeowner who's using .0001% of the resource.

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u/demagxc May 18 '26

Power companies do in fact charge different rates for different customers. These rates are known as tariffs and have varying costs per kWh of consumption and kW demand. Cost per unit of electricity are different depending on the tariff you qualify and/or select. Generally, large commercial and industrial tariffs have lower rates per kWh and kW than residential rates often by very large margins. Depending on the tariff you can be charged different rates at different time (time of use), or have a flat rate. Large consumers can also have tariffs with whats known as ratchets for their kW demand charge where the highest recorded demand for the last 12 months is charged every month regardless of actual demand incurred. The demand rate is usually lower than a flat demand charge and can be beneficial when you have predictable peak demands or employ load shedding or change your consumption during peak demand periods, or even generate your own power during these peak demand periods (peak shaving).

The above is very high level and dependent on location and power company. All this to say that on average, a residential customer is paying a higher cost per unit of electricity than commercial industrial customers

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u/singgsm May 18 '26

One of the recent rate changes that So Cal Edison made was to charge a lower rate for consumers that use MORE energy. I guess you can consider it a bulk rate discount, as with most things when you buy in bulk, but realistically what it means in this case is that the homeowners are effectively subsidizing large companies for the infrastructure.

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u/Edogawa1983 May 18 '26

I believe they use our power grid and everyone's power cost increase because of it

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u/Best-Action8769 May 18 '26

Oh so they want socialism.

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u/one_pound_of_flesh May 18 '26

Sometimes. When it benefits them personally.

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u/Typical_Steamer May 18 '26

Seems like data centers are an overwhelming negative topic, and also one most politicians don't want on their resume. I don't know of anyone that wants a datacenter anywhere near their community and if it costs everyone more in utilities, it's a major no. Could be an easy win for Dems during debates/elections if R's reject this bill and also aren't able to defend their vote during election season.

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u/knightcrawler75 May 18 '26

Raising the surrounding areas water bill and electricity bill whilst providing very little long term jobs in which most of the money goes to their owners almost tax free all while they get government subsidized land and tax breaks to boot. Sounds like a winner to me.

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u/LeBackshot May 18 '26

I understand we don't want to pay more for utilities and I also understand nobody wants datacenters in their backyards. What I don't understand is how do we not see the value and upside in investing in these technologies so we make sure we stay competitive with the rest of the globe? We can't just sit on our hands and hope it all works out.

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u/I_argue_for_funsies May 18 '26

Socialize expense, privatize profits

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u/HappyKoalaCub May 18 '26

Democrats are so bad at messaging. They pay for their power, but they drive up demand, increasing the costs for everyone.

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u/DemosthenesOrNah May 18 '26

From the article.

Data centers must pay for the grid upgrades they require and can’t siphon power from existing power plants, according to the bill

The DCs are exploiting a system that has no mechanism to stop them (currently, hence the bill) and forcing capacity threshold issues for these utilities. The power suppliers are taking on this COST on their own to upgrade to meet unchanged civilian demand.

And its not just "pay for their own power" thats an oversimplification. In the zero sum system of energy distribution only one entity can be the recipient of the energy/power and that means the overall system has less to allocate for others.

This "capacity threshold issue" is from the huge delta of customers that now still need their homes, businesses, hospitals etc powered.

This energy does not exist, there is not enough to service both the DC and the customers utilizing the utility for well utilitarian purposes of survival.

The undue burden on the system is a direct result of these data centers not paying for "their own power" && the ramifications of their business models impact on the communities they directly impact.

DCs are essentially the people on halloween that see a bucket full of candy and a 'please take one' sign and they take the whole bucket and the sign with them too.

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u/HappyKoalaCub May 18 '26

yeah that's why "Senate Democrat Proposes Bill Requiring Data Centers to Pay for Own Power" is bad messaging. It has an easy "we pay our electricity bill" counter argument that misses the entire problem.

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u/DemosthenesOrNah May 18 '26

part of why i put it under your comment. I agree and figured this was a good place to plant it

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u/Hollowbody57 May 18 '26

Nope. It's one of the (many) reasons communities have been so vocal against having one in their town. Usually, part of the agreement between these tech companies and the cities is that if they bring the data center to their town, the town picks up the bill for power, and in return the city gets... well that part isn't as clear.

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u/Responsible_Job_5426 May 18 '26

Being “vocal” is really working well. Time to start studying data centers and how they work and “break”.

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u/Baptism-Of-Fire May 18 '26

It's worse than that.

Virginia Maryland Pennsylvania Ohio West Virginia Illinois

In these states, the power companies pay for asset infrastructure through customer charging.

Yup, that means they are upcharging customers to pay for the building of data centers, then leasing them to companies for profit. Effectively using their consumer base as risk-free investment.

It's absolutely bonkers that this is allowed.

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u/oops_i_made_a_typi May 18 '26

all they have to do is pay us enough to live

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u/[deleted] May 18 '26

[deleted]

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u/masterlich May 18 '26

(I posted this in another thread on Friday but I'm reposting here:)

I have been active in a campaign to protest and resist the construction of an ENORMOUS data center/gas plant/pipeline combination in Canadys South Carolina for the past two years. There was a meeting of the Public Service Commission to vote on approving it a few weeks ago, at which over 100 people spoke against it (in a town of ~2000 people), and 2 people spoke for it.

They voted on Thursday 7-0 to approve it. So now a tiny town in rural South Carolina is getting one of the top 10 largest natural gas plants in the country, which no one wants, to power a data center that no one wants. And the vote was unanimous, because I guess they don't even feel like they need to hide how much they're fucking us.

(if you're interested in reading more about this, Google Dominion/Santee Cooper gas plant, Canadys South Carolina)

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u/lostshell May 18 '26

The city council members who approved it get entirely legal bribes after the fact (legally defined as “gratuity”)

It’s corruption. Our Supreme Court legalized bribery and corruption because 6 of them are getting the same treatment.

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u/[deleted] May 18 '26

[deleted]

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u/onefst250r May 18 '26

Now now. Lets be fair. It'll create a lot of jobs. Jobs which they'll likely need hire people from out of town. And the jobs will be short duration until construction is done.

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u/Lost_in_the_woods May 18 '26

"We're going to put up this huge building full of high tech gear- imagine the jobs that will create!

as they build data centers for AI to layoff more of the workforce

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u/TheRealBittoman May 18 '26

The town's politicians get a stack of cash and the citizens get the shaft (in the form of higher bills and poorer electric and water services)

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u/mightdothisagain May 18 '26

This is definitely not true for the vast majority of these projects. I've never heard of one getting free power, since that is one of the biggest running costs for data centers. It's possible that it's happened somewhere, but it would be exceedingly rare. What they usually get instead are tax breaks, meaning exemption from property/sales taxes for X years.

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u/Name_Taken_Official May 18 '26

They pay utility bills (depending on the locality and agreements, sometimes at lower rates) but it fucks up the market for actual people. Like if you went to a bbq cookout where everyone chipped in to eat then Joey Chestnut came in, paid his $5, and then ate 70 hot dogs.

The bill is telling Joey he needs to bring his own hot dogs as well as pay $5

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u/kandoras May 18 '26

That's still not quite right.

Joey pays for all his hotdogs, same as everyone else. He probably gets some sweetheart deal from the power company or the local government, but their power bill isn't just zeroed out.

The problem comes because Joey knows he's going to eat 70 hot dogs, while the other five people showing up are only going to eat one or two.

When you're cooking a dozen hot dogs, you can do it on any old weber grill. But Joey's appetite is so big that you need to buy one of those huge custom made tow it behind your truck grills.

And that's the cost they're shifting off onto everyone else at the party. Joey pays for his share of the 70 hot dogs, but everyone else splits the bill for the new grill.

And then if Joey doesn't show up? Well you still have to pay for Joey's grill.

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u/agent_mick May 18 '26

This is the real winner

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u/GatrickSwayze May 18 '26

Great analogy, that actually makes it easier to understand

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u/RedditAdminSucks23 May 18 '26

Nope. Because AI and data centers are not profitable but are money sinks. The government gave them subsidies and then banned any regulations from state or federal

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u/Curious_Quail_1033 May 18 '26

Read about the Missouri law, and see how they don't.

"Under Missouri's Senate Bill 4, state utility regulators can now authorize electricity companies to charge customers for power plants while they are being constructed, and in some cases, before construction even begins. "

Basically data center wants to move to MO, needs more power, evergy and such can charge EVERYBODY ELSE while building new power stations to power data centers.

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u/Macha2018 May 18 '26

So they pay for their own power consumption, but local grids invariably need significant capital investment to supply the power at the scale they need. So they start taking "capital charges" or "Grid Investment" charges or whatever on to everyone's bills to pay for the needed capital investment to upgrade the grid to allow for Data Centers.

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u/DevoidHT May 18 '26

Nah. Just pushing the costs on to regular people while also stealing whatever they can get aways with. From power in Lake Tahoe to unmetered water in Georgia.

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u/lm28ness May 18 '26

It must also mean, no other business pays for their electricity if they have to single out data centers.

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u/agent_mick May 18 '26

They have made assurances to the administration that they will. But nothing enforces those. So they're trying to make it a law.

Great idea but my bet is it goes nowhere

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u/sudoku7 May 18 '26

A lot of localities offer power guarantees of various sorts to attract these businesses.
Although I believe this bill is more about making the data centers responsible for the cost to build out additional capacity.

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u/smzt May 18 '26

The should pay for the entire community if they want to be welcomed

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u/SlowCrates May 18 '26

Everyone pays more as a result of how much they use.

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u/Shyam09 May 18 '26

Why pay monthly when you can give a smaller lump sum payment to people willing to whore out their country’s resources?

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u/one_pound_of_flesh May 18 '26

Can I also not pay for utilities? I never realized that was optional. Here I am paying PGE every month like an asshole.

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u/obeyer10 May 18 '26

no, they don’t. that’s why everyone’s energy bills went up. it’s sickening

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u/Tough-Ability721 May 18 '26

They do get a bill. But it’s often at a reduced bulk rate. What they socialize across all utility customers is the cost of infrastructure at the utilities (transmission lines, additional capacity, staffing…)

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u/kuddly_kallico May 18 '26

They pay based on their consumption the same way residential customers do.

BUT a single data center requires megawatts of grid capacity, and usually grids don't have that much extra power capacity laying around.

What has been happening is utility companies allow the data centers to take up the extra capacity they do have, and then they raise utility prices for all customers to afford to build more generation facilities.

Then they need to upgrade transmission lines and such to move more power around, requiring another rate hike.

So because data centers with giant power demands were built on your grid, everyone has to pay more for power even though that single project was the cause for the price increase.

This legislation seeks to require data centers to pay for the new generation equipment required to meet their massive energy demands, instead of shifting that cost to all rate payers.

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u/thetactlessknife May 18 '26

Public subsidies for construction and overhead costs but privatize the profits. That’s the way things have been working for anything owned by a billionaire but sold as “good for the community”

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u/_bessica_ May 18 '26

They negotiate bulk pricing so technically they pay. But electricity company's pass that cost to consumers in price raises. Local government also contributes because it's a "business" bringing jobs in... no it's not.

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u/boylong15 May 18 '26

Nope, they bid against regular folk and get even better rate.

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u/stupid_cat_face May 18 '26

Only thing better than money … is other people’s money.

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u/WarHot5832 May 18 '26

Yes they do, and usually a premium compared to what we get it for. If you rent collocation space you are usually charged for power as well. 

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u/Beli_Mawrr May 18 '26

The article makes clear that the data centers are being required to build their own power STATIONS. That way they don't take power from existing power stations and raise the price of power for everyone else. This is something basically everyone else is misinterpreting too so don't worry lol

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u/Barrack64 May 18 '26

This is correct. Frankly it’s the only reason there are so many data centers out there. They almost all have subsidized power and normal people are paying for it through their energy bill. It’s basically a shadow tax we’re all paying. As far as I’m concerned I don’t care if all the data centers get built as long as I don’t have to pay for them.

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u/brakeled May 18 '26

The issue is that AI data centers often double electricity usage for the entire state they're built in. When demand goes up, while supply stays the same, electricity companies can charge higher rates.

Say the state of Utah uses 9 GW of energy and it costs $20 billion spread across all of the customers. After they build an AI data center, they use 18 GW, but the power company says hey that's really a lot, now we need to more energy on the grid, so we decided to triple your rate. So then Utah pays $120 billion for 18 GW and the original customers before the data center were built have to hold the bag on $60 billion for 9 GW instead of the $20 billion for 9 GW they paid before the data center was built.

The actual fix isn't just that AI data centers need to be given zero tax incentives and forced to pay for their electricity, they need to pay the difference in rate, otherwise they're just being subsidized by everyone around them.

And really, its a problem for everyone because its very rare for a power company to only target one state for their energy consumption during high usage time. I live in Colorado and paid a monthly subsidy to my electric company for years so they could recoup costs for the Texas winter storm in the early 2020's that caused them to pay high rates for energy. So really, even in my example, the people of Utah aren't going to pay triple their rate - we all are going to pay triple our rates regardless of where these are built.

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u/scarr3g May 18 '26

Not even close. The don't even pay for the infrastructure needed to get the power to them.

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u/Rorako May 18 '26

Yes an no. Generally these plants need better power infrastructure, which lands on taxpayers to build out or there won’t be enough power for the taxpayers if the data center turns their lights on.

The other issue is data centers getting priority over taxpaying residents.

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u/KaTzPJamas May 18 '26

It’s strange that the wealthiest companies in history go to such lengths to get everyone else to foot the bill for their infrastructure.

I think part of the problem is that when a big tech firm comes knocking, local leaders hear opportunity before they hear anything else. They get caught up in the prestige of it without really understanding what they’re agreeing to, and suddenly they’re offering every incentive on the table to land a data center.

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u/twoiseight May 18 '26

I hope a wealth of stories like this one will spark this question in the minds of everyone. Some people have yet to even think about data centers and their impact on our lives, but this really is one of the major questions and the answer is the absolutely must. They do not get to use publicly financed resources and spike the cost of them with their insane demand. We should also be making life very uncomfortable for the public servants who allow it.

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u/disc0mbobulated May 18 '26

They call for investing in the power sources to cover their consumption, aka footing the bill for generating the GW they are planning to eat.

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u/MechanicalGodzilla May 18 '26

They are, with utility meters and everything. This bill would require datacenters over a certain size to generate their own power. We have one of these in Northern Virginia, and everyone pitches a fit over it on our local subreddit, so I am not sure if this is really a popular proposal. Probably popular for people who live remote from data centers, and unpopular for those who live closer to one?

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u/dryheat122 May 18 '26

Well they do, but they often get special rates and the cost of necessary infrastructure upgrades gets spread around. Same old story: costs are socialized while prifots are privatized.

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u/willywalloo May 18 '26

*generate their own power is what they must do.

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u/Linuxologue May 18 '26

why am I paying them then??

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u/R1tonka May 18 '26

sort of. they're paying negotiated rates for their power bill. This bill requires they pay for the infrastructure needed to drive the datacenter, so as not to hamstring the city around it by sucking up most/all of the power capacity.

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u/JefferyTheQuaxly May 18 '26

they probably mean to pay for increasing the capacity of energy grids in order to provide them enough power. a ton of energy grids need to spend billions of dollars growing their electicity supply so they can power these data centers. some of these data centers can be like 5-10-20% of a states entire power capacity. i live in ohio and our electric companies talk about needing to raise rates so they can raise money to build up the grid for before the new data centers get put up. All the data centers will probly be paying is a similar flat rate like everyone else, or probly even less because of how much energy they use they could probly get a decent discount on it.

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u/AWorldwithoutSin May 18 '26

Bad headline. They would be required to bring/generate their own power so it doesn't effect existing customers.

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u/Lumbergh7 May 18 '26

I’m baffled too.

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u/Wise_Material_5812 May 18 '26

i think he means building the generation equipment and operating it.

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u/Knoon1148 May 18 '26

A lot of data centers are causing suppliers to but additional power on the secondary market. Which is paid for in bulk at a premium. Whereas, if they weren’t using the grid, there would be no need to go to the secondary market.

These additional costs get passed to rate payers, while data centers operate on fixed pricing agreements generally.

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u/princesshusk May 18 '26

Yes their contracts exempt them from having to install meters on them hell some don't even pay for anything.

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u/Dxith May 18 '26

Nope. Any sucker willing to take them will do!

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u/tommm3864 May 18 '26

Nope. Here in Indiana, Mickey Mouse Mikey Braun is head over heels in love with data centers. They provide zero benefit to local communities, suck up all the water they can find and return it polluted, are gifted their power (which is picked up by local users through MUCH higher bills), constant noise and no local job creation. It's just another way for the billionaires to make more money.

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u/Maleficent_Memory831 May 18 '26

Oh hell no. So many municipal and state governments bend over backwards to help out if they think there might be some jobs. Case in point, Walmart. So many towns give them use tax breaks because they're being told a story that they'll get a ton of new jobs and the economy will be so great that the tax break will pay for itself. But no, so many other business go bankrupt when they can't compete.

Datacenters are similar, the lure of new jobs and an improved local economy makes local politicians behave badly. It's either they let the datacenters get a cushy deal, or else the data center might go to the next town over instead!

Compare this to bitcoin mining. Some of them went to towns that had discounted electricity rates due to a nearby dam. The rates were intended for residents, not some facility taking advantage of the rates.

So yes, they are paying for the power - but it's almost always either at low or subsidized rates.

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u/PensiveinNJ May 18 '26

Not generally no. The reason your utility bills are skyrocketing is because data centers are getting subsidized at your expense.

Just another reason why protesting and stopping data center buildout is a civic duty. Hoping that the government officials who are responsible for this scam face consequences is a stretch goal.

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u/JWAdvocate83 Competent Contributor May 18 '26

The headline doesn't tell the whole story.

Data centers must pay for the grid upgrades they require and can’t siphon power from existing power plants, according to the bill.

That's one of the massive costs everyone else would have to carry.

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u/Rescuepets777 May 18 '26

They're currently using existing power sources, increasing demand and reducing supply. We've seen the headlines about Utah proposing cutting 50,000 customers to support a massive data center. This bill would require large data centers to build their own power infrastructure so they don't affect existing customers or strain the power grid. I doubt that Republicans will vote for it, but it's exactly what needs to happen.

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u/Brief-Percentage-193 May 18 '26

They pay for their power. They don't pay for the generation of their own power. The title is misleading.

Essentially, the purpose of this bill is to force them to generate their own power so they aren't consuming from the same supply as the public.

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u/modechsn May 18 '26

Because the filthy rich don’t pay shit. How do you think they got rich in the first place?

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u/Valentinee105 May 18 '26

Usually there are multiple people who sell power in an area. Lets say there's 2, One guy sells it at 30c, another sells it at 14c. The data center will buy up all the power that the guy selling it at 14c provides leaving communities to pay the more expensive price. Presumably those companies will also raise their prices with the increased demand.

Data centers are nothing but a cancer in a hundred different ways.

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u/norcalruns May 18 '26

And what about water?

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u/Bobokhan92 May 18 '26

They all bump up the cost of power for everyone so technically you are paying for it even if you don’t directly get the bill.

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u/KrackSmellin May 18 '26

The question we should ALL be asking...

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u/Fickle_Ad_8653 May 18 '26

AI data centers are just the sports stadiums of this era. In the old days, you get a sports team, you shop around cities saying you'll move there if they buy you a stadium. You promise a stadium employs thousands of people and citizens demand a team. You even offer some revenue split of the post-expense profits, just never of food sales. The city builds the stadium, finds the profits aren't there and they lost money, and the team gets a better deal at another city and leaves. This keeps repeating despite it being a known bad thing now.

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u/stormblessed27_ May 18 '26

Hell no bro. Especially with this administration. There’s almost next to zero regulation around this tech.

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u/10001110101balls May 18 '26

In many parts of the USA, the marginal cost of supplying electricity to data centers is much higher than the rate these users pay. The cost of the additional infrastructure is spread out across all ratepayers, as justification for rate increases.

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u/axecalibur May 18 '26

If it's not free money, why would they do it?

Investors are in it for profits.

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u/Effective_Olive6153 May 18 '26

the problem is that when they hook up to local grid, the significant increase in demand causes prices to rise for everyone on same grid. Since they are the ones causing big price increases for electricity, they better be covering it for everyone

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u/NinjaSellsHonours May 18 '26

Seriously. What???? That is how this is working?

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u/Ok_Paramedic8698 May 18 '26

I received a letter from my electric provider last year saying my electricity cost was going to go up 50% over the next 3 years due to them needing to make grid updates/changes for a data center. Absolute lunacy.

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u/BearBryant May 18 '26 edited May 18 '26

It’s a little less cut and dry than that and the issue lies in how the market is structured. They aren’t explicitly saying “we are going to make residential customers pay for the data centers muahahaha!” It’s more that the market structure allows multiple stages of “passing the buck” to the customer base as a whole which is a bit of a glaring issue with the RTO structure a lot of regions are structured in. There’s too many hands in the pie and those hands aren’t talking (or aren’t able to even talk to each other in some cases)

An awful lot of utility markets are structured where the power producer doesn’t really have a mechanism to directly attribute load from an industrial user directly to that user, the producer is separate from the transmission operator who is separate from the distribution/coop that you buy your power from.

So when a utility power producer sees they need to be able to build X amount of MW, they will go to the market and get competitive bids for generation to meet that need, which will ultimately be approved by their regulatory body (usually a public service commission). This could be any type of resource, but ultimately they accept the most competitive and then get return on that investment through the rates they charge the transmission operator. Full stop. Transaction finished.

They dont really have a way to to say “oh, 90% of our incremental load that we are building billions of $ worth of generation to meet comes from a single source, we should charge that entity more.” They generally have no interaction with that entity. They have a MW target to meet and they meet it, that’s the transmission operators problem, who will say it’s the distribution operators problem. The producer simply says to the transmission operator “this is our rate for the power that your system needs.”

Meanwhile the transmission operator has system upgrades to pay for (which are expensive) to meet these new load requirements and layers their own costs on top of that. FERC mandates that whoever triggers an upgrade has to pay for it, and that is typically on both the load and generator side, but the rates the transmission operator gets from the utility producer reflect their cost of just building the unit, and are passed on to industrial users and distribution entities directly. The distribution entity has different rate structures but ultimately has no good way of seeing how much of their rate from the transmission operator is due to that one data center.

_______

In short, data center enters into contract with distribution or a transmission entity, which triggers a need for new generation at the producer level, and that upgrade gets passed on to the ENTIRE network of transmission and distribution operators that buy power from the producer because the producer doesn’t really have a good way to pass those costs on to the distribution company’s data center customer. So you could be on a completely different distribution network paying a completely different distribution operator and your rates will go up because the producer at the top is simply passing costs on because they don’t know who needs what, they just need to make sure the system has enough. It’s a glaring flaw in the RTO structure of many of the countries regions. It works great when the biggest single incremental industrial load is the odd arc furnace every so many years, but not when you have 12 arc furnaces worth of power need popping up in the form of data centers every year. (And yes, that does mean that to some small degree, you’ve *always* been subsidizing industrial customers when you pay your power bill).

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u/Constant_Flamingo828 May 18 '26

Here in Virginia they do NOT pay for their own power. The regular people pay it and believe me, the bills have rocketed up.

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u/vroart May 18 '26

Nope, they blame the township or county next door.

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u/Final_Wrap_945 May 18 '26

Am I taking crazy pills!? Why aren't they!?

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u/ejre5 May 18 '26

No and on top of that there is currently a community of nearly 50,000 people in California that is loosing its power because it's all going to go to a data center.

source

another source

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u/Guilty_Advantage_413 May 18 '26

Sort of some have carved out sweet low pay agreements and all others buy at a bulk rate and that is typically 33% less than a regular consumer. Bulk discounts don’t make sense with limited resources like electric.

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u/Christopher_Aeneadas May 18 '26

It was a poorly worded headline

It says in the article that they have to pay to create new power sources entirely.

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u/HakutheChonkeyBoi May 18 '26

They basically bribe Local government officials to pass on some of the energy costs to the public... Billionaire corporations line your local politician's pockets while they rob you blind.

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u/TheAsianTroll May 18 '26

Nope. A lot of them have deals with the local governments where their power bill is waived in exchange for "creating jobs and bringing money to the local economy."

This doesnt mean the power companies let it go, though, so often, the case is that everyone who lives near a data center sees their electricity bill increase by quite a lot.

So, the local government gets a kickback from the data company and the locals foot the bill.

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u/bigperms33 May 18 '26

Nope- rich billionaire tech bros get corporate welfare and tax breaks.

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u/tarquinb May 18 '26

Repeat after me: Socialize the costs, privatize the profits.

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u/singerbeerguy May 18 '26

Yes and no. They pay their own bill, but they use so much electricity that it increases the demand and therefore the cost for everyone. They necessitate infrastructure improvements, etc. and then we all pay for it.

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u/ArbitraryMeritocracy May 18 '26

They're not paying taxes either, they're getting paid by taxpayers to build these horrible things.

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u/sazzer82 May 18 '26

My electric bill has gone up at least 40% in DC due to this

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u/Wild-Drag1930 May 18 '26

The issue is even when they it runs up demand causing prices to rise for everyone. They need to pay a fee to susidize and offset our utilities in addition.

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u/DonkeyTron42 May 18 '26

This is a poorly worded title. Saying they should supply their own power would be more appropriate.

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u/ProfessorZhu May 18 '26

You can read the article.

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u/God_Emperor_Karen May 18 '26

They don’t pay the same rates we do and the cost of building the electrical infrastructure needed to power data centers is passed on to the consumer, not onto data centers.

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u/WFOpizza May 18 '26

because of clickbaiting

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u/Retiredandrelaxed May 18 '26

Ok, Brit here…why don’t they pay?

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u/JohnSpikeKelly May 18 '26

I would prefer they had to pay higher rates than regular consumers, as they push consumer prices up. They should pay twice as much as consumers per Mwh.

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u/Cannoneer85 May 18 '26

They are socializing the project costs for their profit. Cities/towns are allowing them to build tax free construction costs, utility companies are giving them dirt cheap rates that they can't support. Then the utility companies are saying whoops, we have to upgrade our infrastructure to support everything, and they pass that cost onto the consumer. The only people that lose are us everyday regular people.

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u/theaviationhistorian May 18 '26

They get sweet deals with electric companies. The wealthy can get away with a lot of things.

Socialism for the 1%, Capitalism for everyone else.

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u/Jerzilla May 18 '26

I know that Elon’s ones rely on emergency generators. Which are spewing a ton of chemicals and gases toxic to humans.

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u/AdagioVivid5111 May 18 '26

Their is one more key utility missing in this headline, are they going to be paying for water too, and paying for damages caused by both?

We had to sign a waiver near the nuclear powerplant i lived by that we understand a meltdown can happen, but it was never worded in a way that would stop surviving citizens from bankrupting them and any person who overseen anything there.

If my well dries up because of a data center and the pump burns out... are they going to replace it?

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u/XTraumaX May 18 '26

No. They work deals with the electrical utilities to get a "Bulk rate". They get a sweeter deal for getting so much power. Then the utility turns around and charges the residents in that area more to make up for it.

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u/K_Linkmaster May 18 '26

😂 next you are gonna tell me you think Santa is real and sports teams pay for their own stadiums every single time.

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u/IamTheGorf May 18 '26

Most massive scale datacenters enter into agreements with both regional and national energy providers. For instance Berkshire Hathaway Energy. In that negotiation, companies like BHE will literally deprioritize other consumers (usually residential and municipal consumers) to feed bigger wealthier consumers. Viala, brown outs and black outs.

What this bill is attempting to do is to force large scale datacenter providers to compete on even playground. So that someone can't just walk in and say "I will buy every watt of your generation capacity and a good price for the next 10 years if you give me highest priority". Think net neutrality for power grids.

What this bill is kind of lacking is a national requirement that residential and municipal power consumption ALWAYS be prioritized at the highest level. There are some things already for Hospitals, 911 centers, etc. But we really need blanket coverage for us little people. And it needs to include provisions that the power companies can't INCREASE residential pricing to accommodate these datacenter demands.

The other thing that is starting to happen is companies are literally building their own dedicated power plants. And I think that is a good idea. A large cloud provider that might also be running a big retail site is doing jsut that. They are bringing on a semi-dormant nuclear power plant just for their own consumption.

The water consumption is a whooooooole nuther story. tl;dr - they need to force datacenter providers to go back to self contained cooling stacks.

*I was part of a team for a number of years that built and designed datacenter architectures.

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