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.
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.
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.
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.
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.
> […] 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.
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.
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.
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.
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.
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.
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.
> add capacity to scoop up the additional revenue.
they are; but Big Tech isn't paying the cost to add that capacity, because it's getting volume discount prices to attract them in the first place. So the utility has to raise prices on everyone else to cover the cost of adding the capacity.
so essentially, all the other consumers are subsidizing the extra power needed for the data centers (instead of the data centers paying for it)
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.
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.
37 comments
[ 2.3 ms ] story [ 42.0 ms ] threadIf 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.
https://earthjustice.org/experts/mandy-deroche/how-much-do-w...
https://www.npr.org/2025/08/16/nx-s1-5502671/electricity-bil...
https://imgur.com/a/d14oNOP
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.
> […] 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
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.
[1] https://www.technologyreview.com/2025/05/20/1116327/ai-energ...
[2] https://martinalderson.com/posts/are-openai-and-anthropic-re...
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.
Blaming tech for using power is regressive, the real issue here is bad energy policy.
they are; but Big Tech isn't paying the cost to add that capacity, because it's getting volume discount prices to attract them in the first place. So the utility has to raise prices on everyone else to cover the cost of adding the capacity.
so essentially, all the other consumers are subsidizing the extra power needed for the data centers (instead of the data centers paying for it)
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.
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
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
https://news.ycombinator.com/item?id=44931763