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Comment by perpetuallunch | Hacker News Reader

I don’t understand why entry of a large consumer of electric in to an area should result in higher residential electricity prices.

The new large-consumer can pay for the electricity it uses all by itself. If new generating capacity is required to meet the new, higher, demand, that should be factored in to the supply contract with the new large-consumer.

What is the rationale for jacking up residential retail prices? And what is it supposed to achieve?

If the argument is the whole sale price increases because there’s more demand, none of that new demand is coming from the pre-existing residential users, what does it have to do with them?

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Here’s how it works:

- New DCs are going up everywhere and it’s in the media how they use a lot of power and try to negotiate cheaper everything

- People’s utility bills keep going up, particularly the transmission etc components that can’t be avoided by just buying from a different supplier

- Power utilities say they have to increase rates due to increasing demand and regulation that requires them to serve new DCs

- I know multiple people who’ve had their power shut off and can’t afford it on an average salary

So when working stiffs making $25 an hour face a $650 power bill that was $325 three years ago… yeah, they’re going to consider DCs the culprit.

Add on top of that plenty of marketing about how AI will leave you unemployed.

> If new generating capacity is required to meet the new, higher, demand, that should be factored in to the supply contract with the new large-consumer

My understanding is this wasn't done.

> What is the rationale for jacking up residential retail prices?

The most understandable explanations I've heard had to do with grid upgrades. Crap the utility owns and controls and has to change to accomodate the new power flows.

More often, however, it looks like local and state government engaging in industrial policy by trying to get residents to subsidise the new datacenters.

Upgrades also take time and may not be a good idea seeing how the current AI buildout is financed. There is a certain amount of capacity right now and AI behemoths have the financial muscle to take what's there. If that leaves too little for everyone else, prices will reflect that as soon as existing contracts allow.

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