Close Menu
economyuae.comeconomyuae.com
    What's Hot

    AMD’s stock is rallying as analysts make their case for a 40% gain from here

    July 10, 2025

    Trading firms Virtu and Citadel Securities clash over new options exchange

    July 10, 2025

    Stock indexes are back near record highs — even if individual stocks aren’t

    July 10, 2025
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    economyuae.comeconomyuae.com
    Subscribe
    • Home
    • MARKET
    • STARTUPS
    • BUSINESS
    • ECONOMY
    • INTERVIEWS
    • MAGAZINE
    economyuae.comeconomyuae.com
    Home » US utilities plot big rise in electricity rates as data centre demand booms
    Company 

    US utilities plot big rise in electricity rates as data centre demand booms

    Arabian Media staffBy Arabian Media staffJuly 10, 2025No Comments4 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Unlock the Editor’s Digest for free

    Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

    US power providers are seeking to impose big price increases on consumers following booming data centre demand, sparking debate over who should pay for the electricity burden of artificial intelligence.

    Utilities have sought regulatory approval for $29bn in rate increases in the first half of 2025, a 142 per cent increase over the same period a year ago, according to a new report by PowerLines, an energy affordability advocacy group.

    These increases highlight the question of whether surging electricity costs will be shared among all consumers, or charged directly to the large industrial users driving the new demand. Power consumption is expected to more than double in the next decade because of energy-intensive AI, according to BloombergNEF.

    “What we’re . . . seeing is a deer-in-headlights dynamic,” said PowerLines executive director Charles Hua. “A lot of states don’t have a playbook for how they can meet rising [data centre] demand while balancing affordability and utility bills.”

    US customers are served by a sprawling network of different utility companies, with many of the biggest planning prices increases.

    National Grid, with customers in New York and Massachusetts, received approval in April to raise rates by $708mn, or up to $50 a month for each customer.

    Meanwhile, PG&E, which serves 5.5mn business and residential customers in northern and central California, requested a $3.1bn rate increase in April, while Oncor, which serves 13mn customers in Texas, proposed an $834mn increase in June.

    The Northern Indiana Public Service Company was allowed to increase monthly rates by $23 a customer, for a total of $257mn.

    Utilities say the increases are in part needed to repair infrastructure damage, which has become more common because of climate change.

    Massive capital investments are also needed to shore up the US’s ageing electricity grid and meet rapid demand growth.

    But consumer advocates object to the price rises, and question whether households should bear the cost to ensure the US maintains its lead in AI technology.

    One tool a growing number of utilities and regulators are turning to in order to keep bills down are so-called large-load tariffs, which charge big energy users for their excess load on the system.

    AEP Ohio, a utility, in October filed a request with the Public Utilities Commission of Ohio, to charge data centres for 85 per cent of their projected energy use each month even if they use less, and pay an exit fee if their project folds.

    Critics of these arrangements say it is not clear whether the costs are being allocated fairly. Some agreements between utilities and data centres take place behind closed doors.

    Ari Peskoe, director at Harvard Law School’s electricity law initiative, said “these closed door proceedings are problematic as the regulator doesn’t get the benefit of multiple parties weighing in, and we don’t know” the terms of the deals.

    “Meanwhile the utility is spending billions of dollars on infrastructure,” he added.

    A recent Mississippi state law bars utility regulators from reviewing contracts between a utility and a data centre. Kansas regulators are allowed to approve contracts favourable to data centres on the grounds they will spur economic growth or local employment.

    Another option is clean energy transition tariffs, which involves data centres committing to buying clean energy through utilities, which funds new renewable projects.

    The Public Utilities Commission of Nevada in May approved an agreement for Google to buy power from Fervo Energy’s geothermal plant.

    Rich Powell, chief executive of the Clean Energy Buyers Association — whose members include Google, Meta, Microsoft and Amazon — said the tariffs “insulate rate payers from higher costs while giving buyers long-term supply certainty”, though some cost sharing is necessary.

    Utilities say they only invest in infrastructure when they have certainty that data centre projects will come to fruition, and that large customers such as data centres will help make their fixed costs more manageable.

    PG&E said it “wants what our customers want — safe, reliable, clean and affordable energy service. We are delivering on our commitment to stabilise energy bills.”



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleHow many school runs were handled this year?
    Next Article Trafigura-owned biodiesel plant to close in new blow to UK industry
    Arabian Media staff
    • Website

    Related Posts

    Trading firms Virtu and Citadel Securities clash over new options exchange

    July 10, 2025

    Ministers reveal ban on upward-only rent deals for commercial leases

    July 10, 2025

    Jamie Dimon tells Europe: ‘You’re losing’

    July 10, 2025
    Add A Comment
    Leave A Reply Cancel Reply

    Top Posts

    10 Trends From Year 2020 That Predict Business Apps Popularity

    January 20, 2021

    Shipping Lines Continue to Increase Fees, Firms Face More Difficulties

    January 15, 2021

    Qatar Airways Helps Bring Tens of Thousands of Seafarers

    January 15, 2021

    Subscribe to Updates

    Your weekly snapshot of business, innovation, and market moves in the Arab world.

    Advertisement

    Economy UAE is your window into the pulse of the Arab world’s economy — where business meets culture, and ambition drives innovation.

    Facebook X (Twitter) Instagram Pinterest YouTube
    Top Insights

    Top UK Stocks to Watch: Capita Shares Rise as it Unveils

    January 15, 2021
    8.5

    Digital Euro Might Suck Away 8% of Banks’ Deposits

    January 12, 2021

    Oil Gains on OPEC Outlook That U.S. Growth Will Slow

    January 11, 2021
    Get Informed

    Subscribe to Updates

    Your weekly snapshot of business, innovation, and market moves in the Arab world.

    @2025 copyright by Arabian Media Group
    • Home
    • Markets
    • Stocks
    • Funds
    • Buy Now

    Type above and press Enter to search. Press Esc to cancel.