This is in Virgina, which passed the Virginia Clean Economy Act in 2020. This mandated that Dominion (the power company) transition to 100% renewable energy by 2045. Personally, I think this is a good thing in the long run, but in the short run, it means that Dominion has had to invest a lot in building out renewable projects that haven't come online yet.
Lawrence Berkeley National Lab recently did an analysis on electricity prices in the US [1] and found that most of the rate increase in Virginia was attributable to the VCEA, and that load growth had a mitigating effect on price increases.
If you look at the overall report (not just Virginia), the places where electricty costs are rising the fastest are generally not the same places where lots of new datacenters are being built. It's easy to blame datacenters, but there are many factors at play here.
I appreciate that you linked a paper to support your opinion on this matter, though I read the summary PDF a whole lot differently than you did. I’m not sure I’d blame renewables anywhere near as much as you did.
For one thing, energy demand hasn’t been increasing at the consumer level per capita. So you either have a growing population or growing commercial usage (like with data centers) or both driving energy demand.
Is there some literature that points to an idea that it’s faster to build a gas or coal power plant compared to a renewable one? My understanding is that solar is cheaper than gas, right? Even solar plus grid scale batteries are in a similar ballpark. And let’s not forget that other infrastructure like transmission lines and substations do not have any concept of renewable versus not.
The last thing I’ll point out is that we literally have to switch to renewables. There’s no long term versus short term, really, when we think about it. If we don’t make the switch we’ll actually put all of this planet in a lot bigger trouble than asking people to set their air conditioner thermostats a couple degrees higher.
Have a look at slide 53 of the summary pdf. It's specifically about Virginia, and it says the same thing I wrote above (minus my personal opinion about 100% renewables being a good thing). Just to be clear, it doesn't say that VCEA is the only contributing factor to price increases: they attribute ~70% to VCEA, with higher natural gas prices accounting for the rest. There's a chart in the upper-right of the slide showing how these two factors have contributed over time.
I'm not an expert, but my understanding is that solar has a much larger up-front cost than, say, a natural gas plant -- but because there are no ongoing fuel costs, it is expected to be cheaper per kWh over the lifetime of the plant. So this is a great investment in the long term, but there are significant costs that must be absorbed in the short term -- and that's what is impacting prices right now.
The county narrative is cherry picking imo and poor journalism. They are part of PJM which contains one of the largest data centers hubs. The PJM grid serves something like 67mm residents. PJM also uses an annual forward capacity auction to set prices and that is at least partly to blame in price increases. They are trying to forecast peak demand 3 years in advance to set a price for power plant owners to stay online in the event of needing that peak capacity. It’s poorly designed and why they have had such significant spikes there.
That might be so, but is also simplifying things a little too much and pointing to the issue.
"It's a poorly designed grid". PJM might serve 65M+ users, but 2GW isn't easily able to be shipped across their grid. Dominion is proposing a 180mi 525kV HVDC line (ironically enough, from southern VA to northern VA) that can handle up to 3GW. But that's a $5 billion project. That number goes up. A PJM project proposal to ship power from NJ to VA is in the order of $12B.
So yeah, the grid can handle it, but now you're foisting twenty billion dollars of costs on to your users for the benefits of 37 customers. That's a ... pretty raw ... deal for the rest of them.
(And yes, PJM already has a grid that can supply some of those needs, and the reality isn't proposing that they run a new HVDC line just for these projects, but the capacity has to come from somewhere).
Agreed, this is a difficult topic to simplify. "The grid can handle it" is almost always a * statement.
Can it handle it today?
What about next year with the approved interconnects? What about in 2030?
Does "handle it" include summer load or just average, what if temps are 5 degrees hotter than power models ran?
What if PJM can't solve it's high priority overloads this year?
People want to talk about the grid as a binary system vs what it really is.
If serving those 37 customers forces choices that increase risk or cost for real customers (citizens, critical infrastructure like hospitals), it's a bad deal.
It seems like power utilities are optimized to solve problems, and serving these 37 customers can be framed as a solvable problem more easily than "Keeping the grid affordable and reliable" can.
Nobody has proven that those 37 customers are to blame compared to the poorly structured forward pricing system which is largely to blame for some of their recent pricing increases. Not sure where this grid can handle it narrative is coming from. Most of the woes in this article are cherry picked.
If you want to pretend the only source of information on this subject is the linked article I'm sure you can find many users here to debate within your arbitrary parameters.
Same goes for proof, which I'm sure would exclude power flow models if they were available for said debate.
Edit: We can agree the article is not comprehensive, and doesn't have data PJM and utilities have not published.
I’ve linked analyses explaining why PJM’s forward capacity market has been a major driver of recent retail rate increases, not just in this one county.
If you disagree, point to the analysis or data. Suggesting I’m “pretending” doesn’t address the argument. The article cherry-picks one county while largely ignoring the broader PJM pricing mechanics affecting millions of customers. Do better. Between pricing mechanics, input cost inflation and yes increase in demand has impact but not like the article likes to weave it.
Without seeing actual power flow modeling for the lines attached to these data centers no one on the planet can accurately weigh the expense of these customers.
You can't 8760 where and when overloads happen elsewhere, unplanned downtime can't be identified in (or out of) the ISO, you can't forcast demand, you can't plan pre-purchasing of power before it's on demand. You can't speculate on if reconductoring could save money, or remove overloads.
You want to look at rate increases as the core driver. So much so you dump it on replies to others comments.
Too many variables are opaque for me to have a discussion about what is the 'largest' factor when each item on the above list could represent 10 million to 8 billion+ in cost.
But I can tell you I won't be convinced that new large loads, and who approved them are not a contributing factor because no one has "proven" it in real time. That's the kind of logical falacy that results in dismissal of real issues.
Who said it was a poorly designed grid? I think you missed what I said. Their forward price auction system misaligns prices 3 year in advance. My point is a lot of the price increases for PJM is due to this auction system.
404 media has never been interested in being good journalism, but rather driving signups to to their website by people who don't know what proper journalism looks like
So don't allow data centers to connect until enough clean energy has been brought online to meet their needs without impacting cost or availability for retail ratepayers. It's easy really. Say no.
It's so strange to me that the argument previously was "we don't have enough energy generation for EVs and heat pumps to electrify and decarbon" but data centers are thought of as must run load that everyone has to suffer in some way to enable (through increased rates or risk of blackouts), when they have very little positive impact for everyone except a small minority investing in them.
> It's easy to blame datacenters, but there are a lot of factors at play here.
It is because they are the problem. We need as much clean energy as quickly as possible to mitigate climate change, we do not need data centers, broadly speaking.
(if you replaced all of the farmland/ag land, the size of the state of Oregon, harvested for ethanol with solar, you would have more electrical generation than all current US electrical generation combined as of this comment; this is simply a question of will, proven by China's solar PV deployment rates [installing ~90-100GW of solar PV per month])
>It's so strange to me that the argument previously was "we don't have enough energy generation for EVs and heat pumps to electrify and decarbon" but data centers are thought of as must run load that everyone has to suffer in some way to enable
This is because the argument that we didn't have the grid capacity for EVs, heat pumps, and residential solar was never sincere. You could tell because the followup was never "and we should invest more in the grid" but rather the reactionary "and that's why we can't use EVs."
The same people would be opposed to data centers, if not for the fact that the AI buildout is making them all rich.
Their post said that load growth had a mitigating effect on prices. Not letting the data centers come online would, presumably, result in higher prices.
That seems slightly weird, but that sounds like there's some large fixed costs that they can spread over the entire subscriber base, so the extra data centers are picking up some of those fixed costs.
Agreed that in some situations, on some US electric grids (ISOs/TSOs), data centers are absorbing their electrical supply costs that would otherwise be externalities. This is good, I fully support this. This is not uniform unfortunately, and remains to be solved for in totality imho. I take no issue if we get to a point where the AI bubble pops and we're left with net new electrical infrastructure that continues to provide benefit decades into the future while the data centers sit silent (similar to the "fiber boom bust glut" at the turn of the century). I take issue with the AI bubble costs being pushed citizens already, broadly speaking, unable to make ends meet merely out of a desire to speculate (and no one can be sure how long this exuberance and hype cycle is going to last; as long as it lasts, humans who need electricity at a reasonable cost are at risk).
TLDR Humans need electricity to live, data center loads are a luxury that can wait for power to be provided, when available.
In the past couple decades, the vast majority of electricity demands have gone down due to modern substitutions for things people want being way more efficient. People use LED / CFL bulbs instead of incandescent bulbs, heat pumps instead of resistive heating for water heaters and house heaters, etc.
People have also deployed lots of solar to their houses.
So by every normal measure, just by looking around outside and evaluating how I live my life, even with an electric car, my power demands have gone way down.
So the fact that there's some gooner class stroking AI and crypto coins out their network ports and making my electricity more expensive, well, yeah, I'd say that nonsense is lots of externalities that should be better managed.
Residential energy reduction is one small piece of it.
The de-industrializing of the US is a much larger reason we have been able to use cheap parlor tricks vs. actually building things for the past 40ish years.
Those cheap tricks are now running out of easy gains, and the chickens are coming home to roost. At some point you run out of your grandfathers investment into future society and basic infrastructure.
To anyone paying attention to it, this problem has been a slow moving disaster for decades. It’s effectively impossible to build net new generation or large scale transmission upgrades on any reasonable timeframe or budget. Even getting a wind farm in the south end of my state interconnected to the load center metro area in the central part of the state has been over a decade so far and no ground actually broken. Just constant NIMBY.
Agree! My wish is that instead of focusing purely on demand (it’s kind of hard to disaggregate) we refocus on figuring out how to renew generation efforts and updating our transmission. I have seen the same exact issue locally. Large solar farms tens of miles away from civilization in pure farm land that get pushed back on for no good reason.
We have gotten lucky and lazy for the past few decades.
I think the "party line" is that the goal shouldn't be "1950s grid, but bigger and with more red meat!"
Renewables actually cover a lot of the newer demand and can be put around where it doesn't require as much transmission capacity because the production is happening closer to the demand.
And frankly, these jumbo sized data centers can just go figure out how to power themselves. If they want to put PV and wind and some peaker plants on their campus and they can actually meet the environmental requirements, go to it. So far they seem to be dumping AI dioxin into the local waterways, but it is probably possible to run these things without grid power.
In my whole career I've seen computers getting smaller and more efficient. Sometimes you'd need more of them, especially if your product is growing, but almost never would you need these radical increases in power draw to keep up with the red queen.
You mean boomers have been voting against any and every infrastructure investment besides more roads while they lived off the investments of their parents and grandparents? Worse generation in American history.
>Goldman Sachs economists forecast that data centers will account for nearly half of U.S. growth in power demand through 2030. As a result, they saw consumer electricity prices rising about 6% annually this year and next.
but it also cautions
>Even electricity accounts for only about 2.5% of consumer spending, according to the Labor Department.
Electricity has gotten more expensive, it's only growing twice as fast. It's also unclear how much of that it's due to AI, as goldman sacs claims. For instance, if you look at the BLS figures for electricity prices, it shows a huge jump in 2021-2022, well before the datacenter boom started. Others have mentioned rates are going up due to modernization efforts and/or the switch to renewables.
Thank you this. Super helpful. There were so many articles and most of them did not mention price I skipped through it aggressively.
I wish there was more science driven reports based on what’s really happening. So much of it seems to be spun into people’s emotions that’s it’s hard to make sense of it. The public energy companies like to blame data centers but then data in certain geographies suggest otherwise. There was a good semi analysis months ago on how pricing I believe in New England was less about data centers and more on how inefficient the forward auction was constructed for prices there.
I only skimmed because what I saw was either no evidence or low. They to touched on demand but not immediately the correlation to price which is hard to connect without supply and other mechanics that go into different electric grid geographies. This feels very similar to the water argument or the anti-solar farm crowd. Lots of emotions and not as many facts. I am going to lean on the original research link.
No worries, voters are engaged so I am not concerned. Data centers are a third rail in politics at the moment. I encourage politicians and lobbyists to voice their support so we know who they are, as elections have consequences.
Why would anyone be worried? I was asking for actual science behind your claims. If you cannot it’s ok, just cements my thinking similar to the water claims people like to make. It’s the modern hysteria.
My mental model of HN is there is a subset of forum participants who either don't believe the impact data centers are causing, or simply don't care. I’m not here to change hearts or minds (mental models are rigid, humans are emotion vs data driven); only to share data, and consume data.
I believe the data shows data centers to have an outsized impact on the costs discussed. Others may disagree, but the facts are the facts, especially if we're asking schools to conserve power while serving data center loads (per this post and related thread). That is not a fact in support of "data center power consumption is not of material concern, and does not require potential regulatory intervention." Quote the opposite (again, imho). If data centers do not have enough power, the solution is simple; force them to load shed and operate dynamically based on the remaining power available to them until more power is brought online.
Again, show one critical research paper that draws a solid link towards data centers and price increases. You linked to so many articles, many of which just spoke on demand increases. I absolutely believe that in some grids, data centers have driven some of the increase but you claiming that data centers are the only problem reads like those folks scared of solar farms being built.
Just because you want to believe it does not make it true. You are claiming it’s 100% the reason and I am suggesting it’s probably part of it but unclear if it’s 5% or 90%.
So far, the data are clear--data centers are not increasing electricity rates. Those are the facts. https://www.instituteforenergyresearch.org/the-grid/the-numb... This may change in the future, but so far, there is no statistically significant correlation.
Not only that, but states with increasing electricity consumption have lower rates. So it's possible data center will lead to lower rates.
> IER is a member of the advisory board of Project 2025, a collection of conservative and right-wing policy proposals from the Heritage Foundation to reshape the United States federal government and consolidate executive power should the Republican nominee win the 2024 presidential election. The Institute's CEO and founder, Robert L. Bradley Jr., is a senior fellow at the American Institute for Economic Research and Energy & Climate Change Fellow at the Institute of Economic Affairs in London. He has written eight books, including Energy: The Master Resource; Climate Alarmism Reconsidered; and Edison to Enron.
> Overall, we rate the Institute for Energy Research as Right Biased due to its strong advocacy for fossil fuel expansion and deregulation, aligning with free-market conservative energy policies. We rate its reporting as Mixed for factual accuracy, as it does not always align with the consensus of science by selectively presenting data that favors fossil fuels while downplaying or omitting information on climate change and renewable energy viability. IER is a nonprofit organization that does not fully disclose its funding sources. However, past reports indicate financial ties to fossil fuel interests, including donations from ExxonMobil and groups associated with Charles Koch—a key funder of climate-skeptical and free-market advocacy. While the institute claims to support “energy freedom,” its funding sources suggest a strong alignment with the fossil fuel industry.
(I've forwarded your IER citation to a data science practitioner in the energy space to decompose, more to come)
I am not suggesting that data centers or any load growth for that matter have no impact on prices but rather challenging the idea than data centers are the primary/only reason certain regions have had price increases. Most of the shared links focus on PJM which imo has a flawed auction model that requires 3 year forecasts that nobody would expect to get correct. But it makes for sensational journalism because you can show pictures of data centers up against homes.
I have yet to see any strong research showing a correlation to data center growth and price increases. If you have any beyond a gut feeling I would love to read!
Data Center Power Demands Are Contributing to Higher Energy Bills - https://www.eesi.org/articles/view/data-center-power-demands... - February 26th, 2026 ("As data centers expand nationwide, utilities are receiving hundreds of gigawatts in interconnection requests, with implications for the power grid and consumers. Dozens of utilities received data center requests for at least 700 gigawatts (GW) of power connection development in 2025, which is more than the 477 GW in electricity that the United States consumed in all of 2023. Even though many of these projects will never be built, the requests are still leading to a ramp-up in energy infrastructure investments, including generation facilities, transmission lines, and transformers.")
No more PJM data centers unless they can be reliably served: market monitor - https://www.utilitydive.com/news/pjm-data-center-interconnec... - November 26th, 2025 ("The PJM Interconnection’s market monitor urged the Federal Energy Regulatory Commission to rule that large data centers can only come online if the grid operator can still meet reliability metrics.")
> The number of data centers in the U.S. has increased sharply in the last decade and nearly all forecasts suggest that their growth will accelerate in the next decade, mainly driven by the rapid adoption of AI. Since data centers are extremely energy intensive, they have led to significant increases in energy consumption. After two decades of relatively static demand, demand for energy in the U.S. is accelerating rapidly, and demand growth is driven in large part by data centers.
> Data centers have had a particularly strong impact on Northern Virginia: More than half of all the nation's energy consumption attributed to data centers occurs in the state-mostly in Northern Virginia, where the needs of the federal government and national security agencies are important drivers of demand.
> Capacity market prices in the last auction nearly doubled across the PJM region and by more than 14 times in Virginia, signaling an urgent need to secure new transmission and generation to ensure reliability for consumers. Billions of dollars of new investment in generation and transmission capacity will be needed to restore a healthy reserve margin and to recover the portion of reserve capacity that has been consumed by data centers.
> We estimate that failing to make such investments in a timely manner would force regulators to acquiesce to rate increases of as much as 70 percent in the next decade in order to ensure that the grid functions properly and provides energy to all users. The consequences of such a failure could be the appearance of regular brownouts and blackouts in Northern Virginia and across the country.
(If you want to talk to someone at Brookings, FERC, UtilityDive, or another domain specific firm to confirm, let me know and I will connect you to them)
Is there any reason to single out data centers, other than that they are the degrowther bugaboo of the year? Such a rule should apply to any industrial use such as a new factory, if it is to exist at all, which it shouldn't.
In the long run, green energy and data centers are ultimately going to be complimentary.
One of the biggest problems with investing in a renewable grid is curtailment and managing demand or production spikes. In California, they already have to turn off solar plants during peak hours to help manage overproduction.
Even if you have massive quantities of energy storage, you don't have enough "inertia" in the grid to keep power levels consistent as DC power sources flick on and off.
Data centers can act as massive variable loads that can ramp up or down that turn excess energy into something vaguely profitable. And they can also help to create demand for more supply of intermittent green energy sources.
Coal was made unprofitable by fiat and the plants were demolished (supply decreased).
Then, datacenters (demand increased, to put it mildly).
The explanation that one chooses for this is a function of one's other politics but the fact is, one has become a political rallying cry (opposition to demand increase) and the other (blame for supply decrease) has not, and this is the discussion we find ourselves in.
- never actually shows how these new data centers are driving up electricity costs
Funny. They imply causation but never show it. If they had evidence that data centers caused this 25% increase, or a large percentage of it, dont you think they would show it?
Actually, you could write the exact same article but sub out data centers with the clean energy rollout.
This is a popular social media take that is being pushed very hard by clickbait and doomposters, so it's not exactly going against the tide.
Social media is always trying to make things sound way worse than they are and journalists are always in a rush to latch onto those trending keywords, and artificially spin headlines vaguely connected to the topic. So if you only skim headlines it's easy to think something is a bigger problem than it is.
As a Virginian, this is good information to have. I see a lot of ludicrous objections to data centers here (the most ludicrous being water consumption, when most of our data centers have closed-loop systems and regardless the humidity here isn't evaporating water).
I've suspected that the energy regulations and the ruling party's close connection with Dominion Energy (the Governor recently attempted to fire the chair of Virginia Tech's board and replace him with the CEO of Dominion) have had an impact on power use more than data centers themselves.
a different framing of this same information is that Dominion made dumb investment choices in the 2000s and 2010s, locking into electricity that has a fuel cost.
Capacity shortfalls and needs to conserve (i.e., asking customers to reduce usage) are not necessarily 1:1 with rate increases and overall electricity costs. Especially in the short term.
In other words, large “base loads” like data centers could both reduce the average power bill AND contribute to capacity shortages and load shedding.
I work in industrial manufacturing and automation, several of my customers (those running steel foundries, aluminum die casting, plastic recycling and extrusion, and other power-intensive processes) represent a sizeable fraction of the utility usage in the small towns in which they're located.
They often have an individual contract with the utility and participate in load regulation: when you need liquefy a few tons of steel, those heaters have a lot of thermal inertia. If A/C loads are high they'll turn the power down, if wind output is high, they'll turn it up, and so on.
Do data centers participate in the same sort of dynamic pricing and power adjustment? I understand that they're spinning up and powering down instances on demand, and that those demands are somewhat outside of their control, but are they able (and willing, and desirous of reducing their electric bills) to dynamically adjust compute in response to utility rates?
It’s a hard to answer because each grid will treat it differently. My own experience when trying to track some of this data down, DCs are largely having to do the same and that’s why a lot of the buildout includes behind the meter generation to make up for it.
There is not a good picture in aggregate though so it creates all kinds of narratives.
Of the data center rollouts I've been contracted to do safety systems for, ALL of them have gas turbines as part of their power infrastructure on property. They don't solely have gas, but they are mixed Solar/Gas every time.
A few of them in the future pipeline swear they will have nuclear but I don't see that coming to fruition soon.
And is that datacenter bypassing air quality regulation and backing up to a housing development? Most/all of the construction I have tracked meets air quality guidelines and fairly remote but I know that is not always the case!
I’m a few days late, but not sure why I got all the downvotes on this.
Many regions/markets have relatively stable retail rate structures, i.e., residential and most commercial customers don’t pay day-to-day and hour-to-hour electricity market prices. Their per-kWh and per-kW rates are adjusted on much longer time scales, like once a year.
So, big base load customers sign contracts in one year, resulting in better utilization of grid assets, so prices stay lower in the next year(s). But if those customers are not flexible (or are not on a rate structure that encourages them to be flexible), they could contribute to short-term capacity shortages this year. And that will have no impact on many rate payers’ bills, ant least not before rates get adjusted later.
Lawrence Berkeley National Lab recently did an analysis on electricity prices in the US [1] and found that most of the rate increase in Virginia was attributable to the VCEA, and that load growth had a mitigating effect on price increases.
If you look at the overall report (not just Virginia), the places where electricty costs are rising the fastest are generally not the same places where lots of new datacenters are being built. It's easy to blame datacenters, but there are many factors at play here.
[1] https://emp.lbl.gov/publications/factors-influencing-recent-...