Individuals and small businesses have paid more for energy in recent years, and their electricity tariffs can rise even more. This is because the cost of power plants, transmission lines and other equipment that concessionaires need to meet data centers, factories and other major electricity consumers are likely to be passed on to all who use electricity, according to a new report.
Wood Mackenzie’s report, an energy research company, examined 20 major energy consumers. In almost all of these cases, the company found that money that large energy consumers paid for electric dealers would not be enough to cover the cost of the equipment needed to serve them. The rest of the costs would be bored by other concessionaire customers or by the concessionaire itself.
“Dealerships either need to socialize the cost with other consumers or absorb this cost-essentially their shareholders would bear the loss,” said Ben Hertz-Shargel, who is the global chief of research in grid edge da Wood MacKenzie.
This is not a theoretical dilemma for dealers and state employees who supervise their operations and approve or reject their tariffs. The demand for electricity is expected to grow substantially in the coming decades as technology companies build large data centers for their artificial intelligence businesses.
The demand for electricity in some parts of the United States is expected to increase up to 15% over the next four years after several decades of little or no growth. The rapid increase in data centers, which use electricity to feed computer servers and keep them refrigerated, has pressed many dealers. Demand is also growing due to new factories and greater use of electric cars and heating and electrical cooling.
In addition to investing to meet demand, dealers are spending billions of dollars to protect their systems against forest fires, hurricanes, heat waves, winter storms and other extreme weather conditions. Natural disasters, many of which are linked to climate change, have made the US electrical networks less reliable.
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This expense is one of the main reasons why electricity tariffs have increased in recent years. US houses using a typical 1,000 kilowatt-hour electricity average per month paid an average of about $ 164 in February, according to the power information administration. This was over $ 30 more than five years ago.
Dominion Energy, a large energy -owned energy concessionaire from Richmond, Virginia, is one of Wood Mackenzie expecting you to spend more on new infrastructure than it will be able to recover by selling electricity to data centers and other large users. More data centers were opened in Virginia than in any other state.
When asked about the opinions of Wood Mackenzie, Dominion said that on April 1 presented a proposal to electricity regulators in Virginia demanding that customers of large load pay their “fair part” of the concessionaire’s costs. “Ensuring fair cost allocation and mitigating financial risks are not new concepts for the company,” said Edward H. Baine, president of Dominion Energy Virginia, in a testimony that Dominion presented to state regulators and provided “The New York Times.”
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“Addressing both needs and risks associated with the growth of high -loading electrical customers with high load factors is a priority of both public and regulatory policy for Virginia.”
An analysis of 2024 performed by Virginia officials concluded that the data centers paid the total cost of the service they received. But this report warned that the addition of many major electricity users could increase rates to all users if the state did not make political changes to protect individuals and small businesses.
The Wood Mackenzie report found that some states have policies to protect individuals and small businesses against higher tariffs. The main one is Texas, where customers can choose a different energy source from the dealership that keeps the lines that deliver electricity to their homes. This arrangement, according to Wood Mackenzie, helps protect individuals from having to pay for network improvements that benefit mainly or entirely large users.
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Hertz-Shargel said many dealers also had programs that allowed large electricity consumers to buy free energy from emissions directly from energy producers such as solar and wind power plants. These programs, he said, could be reformulated to help ensure that the cost of new power projects is largely or fully bored by users responsible for significant improvements in the network.
Policies that states and concessionaires have implemented significantly reducing the risks of passing on improvement costs to high load customers, but “they do not offer complete protection,” said Hertz-Shargel.
“Only removing the infrastructure caused by date centers from the concessionaire books, as allowing large loads to hire third parties to generation through clean transition tariffs, that both consumers and dealership shareholders will be fully protected.”
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This article originally appeared in The New York Times.
