If I build a house on undeveloped land and the electric company needs to run lines, do I also (in a much smaller way than a data center) increase the costs for all other customers? Is everything always just spread evenly?
Energy hungry infrastructure projects pay something called a "large-load tariff" to try to contain their second-order costs from leaking into residential rate payers pay for. It's not perfect, so a datacenter project could trigger some upgrades that cause rates to go up.
The situation is confusing everyone right now because it's impossible for the average person to tell why rates are going up. A lot of utilities are doing things like finally addressing old fire-prone infrastructure (see the California fires) and dealing with inflation for everything from their generation input costs to inflated costs for infrastructure to putting straight of Hormuz-inflated gas in the tanks of their fleet. Customers only see that their rates are going up and AI datacenters are on the news, so they put them together and assume datacenters are to blame for everything. Yet rates are spiking even in places with zero datacenters.
The topic has entered the domain of emotionally charged topics so nuance is hard to come by. Many of the anti-datacenter people are against datacenters as a proxy for their hatred of AI and the electricity and water arguments are just convenient justifications. This is how we arrive at the article.
In some states (like Oregon and Virginia) they do, but in a lot of states the regulations for rate structures are flat among all users so when there's a large surge in new demand the utility will build out new capacity and spread the cost of that new capacity to all rate payers with no regard for the fact that the new capacity would not have been needed without the new demand (from data centers). So everyone who was already using the electricity pays the new higher rates along with the new large-load user.
These companies building data centers will often make a lot of PR statements about how they are fine paying the extra cost for extra use while at the same time lobbying behind the scenes to actually avoid that happening and fighting against changes to utility rate structures that would raise their costs. By and large they can't be trusted.
electrical supply is not infinite. datacenters have high electrical demand. more demand + same supply = increase prices.
>Why doesn't the data center bear an extra cost for the added infrastructure?
the problem is that added infrastructure is not built instantaneously. it lags behind. so costs will be high until more supply-side infrastructure is in place.
i agree that there should be some sort of stipulation that when you build your mega datacenter that you also have to build out electrical infrastructure at the same time. but unfortunately, that is not how it is.
The cities are paying exorbitant prices for electricity to pay for safer infrastructure for rural customers (undergrounding).
Some cities have divested from PG&E and enjoy much lower electricity prices as a result.
In some sense, sure, any time you buy something you apply some upward price pressure. Of course, whether the resulting price changes measurably depends on many things, like the scale of your purchase relative to the scale of the market, the price elasticity of demand, who the marginal buyers and producers are, etc.