Americans are discovering the massive underinvestment in the electrical grid. When you live in San Francisco, you can experience several power outages during the summer, and it's perfectly normal to have a generator at home. If you live like me in France, you can go several years without a power outage. You don't maintain your infrastructure, so you pay ridiculously low costs. And then, you're caught up in reality, here, dominated by data centers. And it's the fault of the GAFAMs ;)
I was looking into energy markets and how they work and it is truly a cluster of moving parts all along the Eastern Interconnect. The question is when is the shoe going to really drop? You can only keep prices going up on an inelastic good before something really bad happens, and this doesn't even touch climate tail risks like heat sagging tx lines across the grid.
There's quite a bit of flim-flam in the video, but the key falsifiable claim is that residential electricity demand is not growing. I am looking at the EIA Monthly Energy Review and it appears that residential electricity grows at ~1% CAGR this century. Which raises the question of whether the bills are now due for past underinvestment in generating capacity.
This has been obvious for several years now thanks to the crypto boom https://www.technologyreview.com/2022/04/18/1049331/bitcoin-...
Great video on how the public is getting screwed on energy deals.
Basically large tech companies have the deep pockets to push up prices at electricity auctions. But why bid in public when you can do those deals in private. That's the first problem. All that needs to be out in the open.
What really irks me is that the market is so manipulated that we can't do anything about it. Think about NEM 3.0 vs 2.0. Putting data centers in their own rate class does make sense as the first step.
In the US people are complaining about electricity like it’s a scarce resource while China has drastically overbuilt energy capacity (solar and nuclear) and gives 0 shits about AI or crypto. One of these approaches seems better thought through.
From 2022:
> […] Applying a new data set for country-level energy prices since 1960, this study evaluates the effects of energy prices on economic growth in 18 OECD countries by controlling for other important macroeconomic conditions that shape economic activity. Mean-group estimates that control for cross-country correlations are used to emphasize average responses across nations. Averaged across all nations, results suggest that a 10% increase in energy prices dampened economic growth by about 0.15%. Moreover, some evidence exists that this response may be larger for more energy-intensive economies.
* https://www.sciencedirect.com/science/article/abs/pii/S01409...
Though an interesting graph for Sweden on GDP growth and energy use:
* https://ourworldindata.org/grapher/energy-use-gdp-decoupling
Also, crypto helps!
Texas paid bitcoin miner Riot $31.7 million to shut down during heat wave in August: https://www.cnbc.com/2023/09/06/texas-paid-bitcoin-miner-rio...
Two of the biggest bitcoin mining companies in the world are battling it out in a Texas town of 5,600 people: https://www.cnbc.com/2021/10/31/bitcoin-mining-giants-bitdee...
Cryptocurrency Mining in Texas: https://earthjustice.org/feature/cryptocurrency-mining-texas Discussion: https://news.ycombinator.com/item?id=37516498
Texas even subsidizes the energy bill of crytominers directly, they receive discounts and subsidies while consumers pay more and more:
https://earthjustice.org/experts/mandy-deroche/how-much-do-w...
Actually it's because there isn't enough solar and generation because of previous policies. Check out how Alex Albrecht got screwed doing solar in Los Angeles.
Is the increased electric bill offset by reductions in taxes? The answer looks like "probably".
https://www.loudoun.gov/6188/Data-Centers-in-Loudoun-County
"Loudoun County is home to one of the largest concentrations of data centers in the world through which much of the world's internet traffic passes every day. The industry has helped to diversify Loudoun County's economy, which has included bringing new jobs and revenue streams to the county over the past 14 years that have helped to keep real property tax rates relatively low."
The energy costs of certain parts of Maryland are about to skyrocket, or have already risen dramatically, driven by datacenter demand, primarily but not exclusively from Northern VA.
https://www.wusa9.com/article/tech/science/environment/data-...
https://content.govdelivery.com/accounts/MDOPC/bulletins/3ea...
https://www.thebanner.com/economy/maryland-energy-cost-virgi...
I am an engineer at a large utility in the Pacific Northwest. My ratepayers pay very little for power, We generate with hydro which is very, very cheap. There are very few opportunities for more hydro. Every new MW we add is going to cost two orders of magnitude more per MWh compared with the existing stuff. We would not need to add capacity like this, except that we are being absolutely deluged with requests for enormous new data centers, which will require purchasing power from these very expensive sources. This will drive up prices for everyone. There's a lot of people in this thread that are confidently claiming things will happen in systems they barely understand. I'm here to tell you this will create a power affordability crisis in my region, and it hasn't even started yet. The effects won't be fully seen for years.
I feel like the solution is for the state owned power company to add capacity to scoop up the additional revenue. This is quite literally an opportunity to advance society while generating more tax revenue and *improving* public services.
Blaming tech for using power is regressive, the real issue here is bad energy policy.
Related:
Electricity prices are climbing more than twice as fast as inflation
https://news.ycombinator.com/item?id=44931763
Big Tech's A.I. Data Centers Are Driving Up Electricity Bills for Everyone
https://news.ycombinator.com/item?id=44905595
The U.S. grid is so weak, the AI race may be over
https://news.ycombinator.com/item?id=44910562
AI is booming so are household utility bills
Clear example of privatization of everything... until its the big corporations who need to get something done - then its socialism in disguise. And of course they hide all the deals behind closed doors so their customers can't see who all, and how much they're subsidizing.
If there is a sudden increase in demand/supply issues due to large corporations they should be the ones to subsidize the bill. I'd argue in the communities this affects they should be forced to cover for everyone who lives in the area for materially making their lives worse.
Not to mention utility companies should be forced to be transparent in the pricing/deals they make with tech companies. They are likely just luring them in with a deal and passing off the rest to their customers so they still don't lose out in the short term. They want the best of both worlds - still making all the same profits short term by passing on to customers while getting the long term lock-in for these data centers.
This video is unconvincing. The thesis of the video basically boils down to "AI companies are using electricity, driving up prices, and residential consumers are paying for it". However it neglects that most of the power usage is caused by the same residential users, who are getting something out of it. 80–90% of AI energy usage is estimated for inference (eg. generating responses on chatgpt), not training[1]. Moreover despite AI companies being unprofitable as a whole, they're making fat margins on inference[2]. Therefore it's reasonable to assume that most of AI electricity consumption that the video complains about is as a result of ordinary people using AI. Taking this into account, blaming AI companies for jacking up electricity prices in this context makes as much sense as blaming airlines for jacking up oil prices. They're only doing so because people are buying their services, and presumably deriving some sort of utility from it.
[1] https://www.technologyreview.com/2025/05/20/1116327/ai-energ...
[2] https://martinalderson.com/posts/are-openai-and-anthropic-re...
in Chelan County where I live they came up with a Large Load policy specifically to protect the rates of other local users... the large load customer gets short-term access to power and then has to source it elsewhere (with the PUD in the middle). Microsoft is here and apparently plans to source from Helion long-term which is building their first generator just down the street. they also have to pay for their own grid upgrades as needed.
more information here: https://www.chelanpud.org/about-us/events-calendar/event/202...
The best way to make the grid fair is to remove fixed rate accounting altogether. The reality is that all power must be delivered instantaneously. Any meaningful arbitrage (i.e., adding actual value to grid services) must occur within milliseconds. The ability to purchase contracts on power that hasn't been generated yet is what is driving all the volatility and exploitation.
There is a reason that Griddy (variable rate wholesaler for consumers) had to be killed in Texas. The popular narrative is that they "fucked" their customers over in 2021. The reality is that anyone who had been using their variable rate system for more than 12 months (and made any attempt whatsoever to respond to demand signals) had easily compensated for the $9/kWH crunch that lasted merely ~72 hours. Most of their other customers who I talked to had no problem with the situation. There was a deliberate PR campaign (likely by the other retail electricity providers in the market) to make it seem like an unbelievably impossible situation for a normal person to cope with. Now it's illegal to have wholesale rates for consumers in Texas. We've gone two steps in the wrong direction.
Would have liked a text version. And that would save energy too.
Warren Buffett is going to be rich!
Ah now I see why electric costs are increasing at double the rate of inflation. But hey I got to make some images of the Muppets in various movies using AI.
https://www.npr.org/2025/08/16/nx-s1-5502671/electricity-bil...
Unless the big data centers are entering into mandatory load reduction during high strain on the system, then theres going to be an increased cost to the little buyers.
The tradeoff is that Utilities can upgrade their systems and improve uptime thanks to the higher base load. It's up to the utils to negotiate well against the big data players.. good luck on that with politicians breathing down your neck to secure a big win.
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Like any other industry, I don't care what the electricity cost of data centres is if they create actual value. This is no different than a factory that makes car parts - you need energy to make stuff.
I think the part the bugs me is how over-hyped AI is, and there's a fear that all this electricity is being used as part of fundamentally unsustainable business models that will not prove sustainable long term. If that's the case, and we're overbuilding data centres what's going to happen to those buildings once the bubble pops?
Because of Trump, and just like Trump, this is a perfect storm. Unrestrained AI and crypto are causing a surge in demand at the same time Trump is spitefully and recklessly killing wind and solar installations and subsidies.
Trump-licans - the party of mean and stupid and self-destruction.
Some of us call this "capitalism". Prices are driven by offer and demand, efficient market allocation to who can extract most value from a resource, we like that on HN.
I don't think it's that hidden by now lol
The real reason is that fossil fuel plants have been offlined and decommissioned, and the reason this occurred is because they were made unprofitable by punitive regulation far more so than market forces.
News flash Casandra, a $65/mo power bill is peanuts. Try owning a home with HVAC.
I've got the solution! Digitize your brain and move into the data center. Can't recommend the show "Pantheon" enough.
Does anyone here care though? Everyone using LLMs are directly supporting lower quality of life and high cost-of-living across the country.
No person can do anything except fund Zuckerberg's next island purchase and laugh about how they’re using LLMs to vibe code their next unreleased hobby app.
It is truly sad that we are selling out our quality of life for short term gain for tech corporations.
This feels misleading to me.
I accept that data centers generate more load for a system. Which will make the overall system need more maintenance, which is something that others paying into the system will also have to support. But, I'm not clear on why this is a hidden cost.
Consider, if people get the new housing developments that they want, that would also add load to the system. This larger energy system will be more expensive to run, which will lead to higher costs. Adding houses would probably be even more expensive in the transmission maintenance costs associated.
Any model you do that tries to prevent this is essentially rent stabilization for early members. And that has a pretty good track record of not being a good idea.