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Some US Electricity Prices are Rising -- But It's Not Just Data Centers (washingtonpost.com) 75

Posted by EditorDavid from the power-plays dept.
North Dakota experienced an almost 40% increase in electricity demand "thanks in part to an explosion of data centers," reports the Washington Post. Yet the state saw a 1% drop in its per kilowatt-hour rates.

"A new study from researchers at Lawrence Berkeley National Laboratory and the consulting group Brattle suggests that, counterintuitively, more electricity demand can actually lower prices..." Between 2019 and 2024, the researchers calculated, states with spikes in electricity demand saw lower prices overall. Instead, they found that the biggest factors behind rising rates were the cost of poles, wires and other electrical equipment — as well as the cost of safeguarding that infrastructure against future disasters... [T]he largest costs are fixed costs — that is, maintaining the massive system of poles and wires that keeps electricity flowing. That system is getting old and is under increasing pressures from wildfires, hurricanes and other extreme weather. More power customers, therefore, means more ways to divvy up those fixed costs. "What that means is you can then take some of those fixed infrastructure costs and end up spreading them around more megawatt-hours that are being sold — and that can actually reduce rates for everyone," said Ryan Hledik [principal at Brattle and a member of the research team]...

[T]he new study shows that the costs of operating and installing wind, natural gas, coal and solar have been falling over the past 20 years. Since 2005, generation costs have fallen by 35 percent, from $234 billion to $153 billion. But the costs of the huge wires that transmit that power across the grid, and the poles and wires that deliver that electricity to customers, are skyrocketing. In the past two decades, transmission costs nearly tripled; distribution costs more than doubled. Part of that trend is from the rising costs of parts: The price of transformers and wires, for example, has far outpaced inflation over the past five years. At the same time, U.S. utilities haven't been on top of replacing power poles and lines in the past, and are now trying to catch up. According to another report from Brattle, utilities are already spending more than $10 billion a year replacing aging transmission lines.

And finally, escalating extreme-weather events are knocking out local lines, forcing utilities to spend big to make fixes. Last year, Hurricane Beryl decimated Houston's power grid, forcing months of costly repairs. The threat of wildfires in the West, meanwhile, is making utilities spend billions on burying power lines. According to the Lawrence Berkeley study, about 40 percent of California's electricity price increase over the last five years was due to wildfire-related costs.
Yet the researchers tell the Washington Post that prices could still increase if utilities have to quickly build more infrastructure just to handle data center. But their point is "This is a much more nuanced issue than just, 'We have a new data center, so rates will go up.'"

As the article points out, "Generous subsidies for rooftop solar also increased rates in certain states, mostly in places such as California and Maine... If customers install rooftop solar panels, demand for electricity shrinks, spreading those fixed costs over a smaller set of consumers.
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Some US Electricity Prices are Rising -- But It's Not Just Data Centers More

Some US Electricity Prices are Rising -- But It's Not Just Data Centers

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  • The Trump regime illegally withheld funding (Score:3, Insightful)

    by rsilvergun ( 571051 ) on Sunday October 26, 2025 @04:59PM (#65752086)
    For a ton of solar and wind projects. Nobody has the wherewithal or the balls to go up against him so he can basically rule by Fiat. It's why we keep having no Kings protests before trying to remind you and well, it's not working.

    This means that a shitload of electrical and supply that should be hitting the market right now isn't and it's going to cost you money. That's on top of his national sales tax that he's passing off as a trade war.

    If you take Trump out of the picture inflation drops to 2% and we would be experiencing an economic boom right now.

    But despite that at least half the people here think that the Republicans are better for the economy and more patriotic.

    If that describes you, then What the fuck is wrong with you?

    I don't want an answer I want you to answer that question to yourself. Learn some fucking self-reflection for a change.

    • Re: The Trump regime illegally withheld funding (Score:5, Insightful)

      by OrangeTide ( 124937 ) on Sunday October 26, 2025 @05:09PM (#65752100) Homepage Journal

      People won't get a clue until the lights go out and the freezers at the stores are empty.

      • Re: The Trump regime illegally withheld funding (Score:4, Interesting)

        by ArchieBunker ( 132337 ) on Sunday October 26, 2025 @05:11PM (#65752106)

        But at least the libs are suffering too is what they'll say.

        • And they'd be retarded for doing so given that the division-of-interest is:

          * those with power / those without power (1)

          (1) - no pun intended :P - although I suppose in the future, electrical power might be a thing only available to the powerful, who can say - the future is orange!

          Wake up n00bs!

      • Or maybe Joe Biden but they will never blame themselves or Donald Trump.

        They aren't capable of thinking for themselves anymore if they ever were and TV tells them how to think and TV tells them that Trump is their man.
    • Nobody has the wherewithal or the balls to go up against him so he can basically rule by Fiat.

      Would you be happier if he ruled by Volvo?

    • For a ton of solar and wind projects. Nobody has the wherewithal or the balls to go up against him so he can basically rule by Fiat.

      Nonsense. The opposition has taken the Trump administration to court repeatedly. They are suing over this too https://www.theguardian.com/us... [theguardian.com] but I doubt they will succeed. Your assertion that "This means that a shitload of electrical and supply that should be hitting the market right now" makes zero sense because these projects never started, the funding was cancelled recently, and the programs were a scam. Offshore wind only makes sense when they can charge a lot for the energy, so those weren't goin

      • Re: (Score:3, Insightful)

        by Ksevio ( 865461 )

        That's the point - we were shutting down old polluting plants that were costing us billions in extra health care costs and replacing them with renewable sources, but then Trump decided that windmills don't help his donors enough so shut down those. The only scam here is the billions being diverted from legitimate programs into Trump's secret police force

        • Okay, what I heard there was "turning off things that are already working and money we don't have to replace them."

      • Re: (Score:2)

        by radl33t ( 900691 )
        data do not support your partisan talking points. Many scholarly articles published over the last few years on the topic. I suggest you do some reading.

        • data do not support your partisan talking points. Many scholarly articles published over the last few years on the topic. I suggest you do some reading.

          On what exactly? The high cost of offshore wind energy is well documented. Here's the AI summary:

          Yes, offshore wind energy is currently more expensive than onshore wind energy and other power sources like natural gas, due to high costs for construction, installation, and maintenance. However, the costs are expected to decrease over time with technological advancements and a growing industry pipeline.

          Cost comparison
          Levelized Cost of Energy (LCOE): The LCOE for offshore wind is higher than for onshore wind a

    • If you look at the production and consumption graphs on https://www.eia.gov/energyexpl... [eia.gov] will you too see 10% overproduction of electricity in the US? Do you think they send the excess to ground?

    • Since as I understand it, you live in Singapore, what is it to you? You have no vested interest in the United States of America.

  • Price-Fixing. (Score:5, Interesting)

    by PubJeezy ( 10299395 ) on Sunday October 26, 2025 @05:34PM (#65752146)
    Price-Fixing. The media's coverage of rampant price-fixing and manipulation is laughable. The largest energy company in the country is Exxon. They have committed 646 violations in the past 25 years for over $3.3 BILLION in fines. And of course at least one of those violations is for price fixing: https://violationtracker.goodj... [goodjobsfirst.org]

    Our economy rewards cheaters. That's it. That's why we have all of the problems with jobs, housing an grocery prices. The 5 most successful corporations in the United States have all been found guilty of price fixing. Every single piece of data says that prices are going up because of collusion, market manipulation and fraud from within the companies selling these products. And all the media can do is scream " WHY ARE PRICES GOING UP?!?!?" louder and louder to drown out the explanation.

    Capitalism creates cartels and now they're dominating our country. We need trustbusters.

    • Price-Fixing. The media's coverage of rampant price-fixing and manipulation is laughable. The largest energy company in the country is Exxon.

      I have nothing good to say about Exxon, but since the article we're discussing is about electrical power cost and demand, Exxon really isn't a major player (although in the future they could be [powermag.com].

      • Sorry but you're completely off-base with that comment. It doesn't matter that Exxon doesn't run power plants, they are an up-stream supplier of fossil fuels to the folks that actually run the plants.

        Also, you completely missed my point about capitalism creating cartels and price-fixing being the norm. You want to look at some notable electricity producers? Two of the biggest are Duke and American Electric Power.

        Duke has already committed 6 violations related to price-fixing and market manipulation for

        • Exxon isn't a big player [Re:Price-Fixing.] (Score:4, Informative)

          by Geoffrey.landis ( 926948 ) on Monday October 27, 2025 @09:48AM (#65753152) Homepage

          So, in response to my saying Exxon isn't a big player, you point to Duke and American Electric Power. Neither one of these is Exxon. If you had used these as examples in the first place, I wouldn't have bothered to correct you.

          As for Exxon supplying fossil fuels to electric producers, yes, but they're not the big player. The primary fossil fuel used in electrical power production is natural gas, and the big player is not Exxon but BP, 16 billion cubic feet of natural gas per day in the United States. Number two is EQT, a company you probably never heard of (only a third as big a producer as BP, but still producing double the amount of natural gas as Exxon, a company primarily focused on oil.)

          Exxon is not and has never been the good guys, but they're only a bit player in electrical power, and most certainly are not driving the price increases.

          • You're completely delusional. Just like all of the other companies mentioned, BP has already been found guilty of price-fixing...6 times. You're a lazy troll and your behavior on this thread is indefensible. Grow up.

            Here's BP's track record: https://violationtracker.goodj... [goodjobsfirst.org]

            • You're completely delusional. Just like all of the other companies mentioned, BP has already been found guilty of price-fixing...6 times.

              So why did you call out Exxon, who was not involved, and did not call out BP, who was?

        • Capitalism doesn't create cartels, people try to cheat under any system. What you're saying is that there has been a regulatory failure that has allowed collusion to occur. But your evidence for this appears to be that regulators have successfully done their jobs, stopped the collusion and price-fixing, and have punished the offenders.

          So... are you complaining that the cases aren't being prosecuted fast enough?

          • BP was fined for price-fixing in 2003. So the regulators must have stopped collusion and punished the offender, right? So then why was BP fined for price-fixing again in 2005? Well this time the regulators must have solved the problem...but of course they were fined for price-fixing again in 2009. And again in 2010 and of course one more time in 2014.

            Your comment could make sense in a world where companies only ever get caught price-fixing once but in the real world, these firms keep getting caught doing t

  • North Dakota experienced an almost 40% increase in electricity demand "thanks in part to an explosion of data centers," reports the Washington Post. Yet the state saw a 1% drop in its per kilowatt-hour rates.

    The data centers provide a more continuous load then residential or small business. More energy delivered over an installed line capacity, producing more revenue. The line capacity represents capital investment, which is now more efficiently utilized and paid for by that energy revenue.

  • Then maybe decentralize production a bit. More competent people running more production facilities could compensate in a small way for some jobs lost to AI. Somewhere there exists a consultant who knows where reducing the economy of scale with the now less expensive production meets the expense of maintaining a given amperage network of transmission. I expect there's a point where fewer amperes doesn't make transmission cheaper and one where more watts doesn't make generation cost per watt significantly c

    • Re: (Score:2)

      by evanh ( 627108 )

      In other words, each State to itself. I doubt that's a big factor. Services are expensive all round. Roading costs are skyrocketing too.

  • Costs are spread out, but unevenly (Score:4, Interesting)

    by larryjoe ( 135075 ) on Sunday October 26, 2025 @08:02PM (#65752368)

    Most utilities support both residential and industrial customers like data centers. Most utilities give significantly lower rates to industrial customers. For example, in Santa Clara, CA, which has its own city electricity utility, residential customers pay $0.150 to $0.172/kWh while very large industrial customers pay $0.108 to $0.091/kWh. Of course, households pay a higher rate for using more electricity, while data centers pay less when using more. And most of the need for increased power delivery is due to new data centers, but households need to pay to essentially partially subsidize those data centers.

    • When retail rates are completely administered by commissions executing decoupling mandates, why maintain the textbook fiction that supply and demand has anything to do with prices, or that rising prices indicate scarcity? Nostalgia?

      • Yeah, as use from industry increases dramatically the costs for a house that's running an oven for dinner, plus some HVAC as its biggest draws should evermore approach a rounding error of negligible cost where maintenance of the lines is the biggest utility expense.
    • Those are State rules you're looking at. They vary wildly. For example, in Georgia, the rules are such that new data centers don't cause anyone else's bill to go up.

      Who is on your State's Public Services Commission matters. They set those rules.

  • Private Equity (Score:5, Interesting)

    by Inglix the Mad ( 576601 ) on Monday October 27, 2025 @08:00AM (#65752960)
    is another force. They've been jacking rates so badly in places like Superior, WI (amongst other places) that they locals have had enough to the point they are actively trying to buy the power facilities back.

    https://www.wpr.org/news/city-... [wpr.org]

    Ever since UPPCo was purchased by Axium (private equity) they've jacked rates considerably. Every couple of years, like in Superior, a new rate hike.

    “If we look at Northern Michigan, there’s a utility called the Upper Peninsula Power Company or UPPCO. This was acquired by a private equity firm in 2014. After the private equity firm took it over, shortly thereafter, they raised the bills. A couple of years later, bills went up again. Then that private equity firm sold it to a different private equity firm. Once the new private equity owners were in control, they raised bills again. Since 2014, UPPCO, being owned by private equity, has seen four bill hikes.”

    Now another private equity company is buying a major power group (Allete) in Minnesota.

    I think we've got to accept the fact that, if we don't reign in the bad actors, crony Capitalists are going to be the ones to destroy Capitalism.
    • Sounds like you need to vote in a new Public Utilities Commission, or whatever it's called there.
  • If data centers need infrastructure to deliver power, why don't they pay for it? I mean, if a housing developer builds a group of houses, he or she pays to build the roads, put in the sewage pipes, and so on. And so ... why doesn't the data center pay for it?

  • spreading solar costs (Score:4, Interesting)

    by awwshit ( 6214476 ) on Monday October 27, 2025 @11:01AM (#65753300)

    Rooftop solar is doing very little to retail rates in California. The out of data infrastructure and wildfires are the drivers of large rate increases.

    "The three primary factors driving IOU prices in California are wildfire mitigation and liability costs (4.3 cents/kWh), inflation in transmission and distribution costs (3.7 cents/kWh), and net metering for customer-sited solar, according to the study. Secondary factors include public-purpose programs such as energy-efficiency and lower-income customer programs (0.2 cents/kWh) and the state’s renewables portfolio standard (0.5 cents/kWh)."
    https://archive.ph/YsCB3#selec... [archive.ph]

    That is 8 cents/kwh for fires and infrastructure, and 0.7 cents/kwh solar impact. But this does not really tell the whole story, my electric bill is riddled with all kinds of fees and taxes.

  • I put a solar roof on; started the process last summer, signed the papers by the end of September, about a 5 month delay from the local utility for permitting, completed in march. My bill has 3 parts: a fixed customer charge (~$20 per meter; I have 2), a delivery charge (about 7 cents per KWh), and a separate generation charge (also about 7 cents per KWh). I pay delivery and generation charges for every KWh that the utility sends me, so 14 cents per KWh, and if I generate more electricity than I'm using,

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