Data points.
Data Centers could in many cases be a downward pressure on rates, as they bring big new revenue on line to help pay for Transmission and infrastructure.
Examples here from Indiana and Arizona.
Indiana Michigan Power announced Tuesday it will file for regulatory approval to lower base electric rates, which the utility said represent the largest portion of customer bills.
The move is part of I&M’s new Customer Benefits Plan, which must be approved by the Indiana Utility Regulatory Commission before taking effect. The utility attributed the proposed rate decrease to increased revenue from large customers, including data centers such as Google’s Fort Wayne site.
The plan also includes a “Benefits Bank” designed to help stabilize customer rates by providing a buffer against future cost increases. I&M said it also wants to make strategic improvements in infrastructure and technology to reduce outages and improve reliability.
The announcement comes as advocates have raised concerns over electric rate increases tied to data center growth. I&M has also filed separately to accelerate new power plant construction, as demand is projected to nearly double between 2025 and 2030.
“Our priority is to keep rates as low as possible while delivering reliable power and growing our communities. We know customers are concerned about affordability and the impact of data-center growth on rates. The fact that we can reduce rates while continuing to invest in the infrastructure and technology that supports reliability, is evidence that growth in I&M’s service territory is benefiting all customers.”
– Steve Baker, I&M’s President and Chief Operating Officer
Google also previously agreed to reduce its data center’s electrical use during times of peak demand.
Below, Arizona Utility CEO tells an interviewer that new Data Centers will have to pay their own way and will not burden ratepayers.
In last night’s State of the Union, the President said that Data Centers will have to pay their own way.
In a nod to voter frustration over rising electricity prices, President Trump on Tuesday said he was negotiating pledges from major tech companies to pay a greater share of the energy costs associated with new data centers.
Silicon Valley is spending hundreds of billions of dollars to build power-hungry data centers for artificial intelligence as demand for electricity is increasing across the United States. That has led to widespread fears that the A.I. boom could cause utility bills to spike for ordinary households.
Mr. Trump’s announcement during his State of the Union speech was light on details, and experts said that any promises by tech companies to pay more for their electricity could be difficult to verify or enforce in practice. Yet the move underscored the extent to which White House officials and Republicans have worried that rising electricity prices could hurt them in the midterm elections this year.
“We’re telling the major tech companies they have the obligation to provide for their own power needs and can build their own power plants so no one’s prices will go up,” Mr. Trump said. He called it a “ratepayer protection pledge.”
In recent weeks, both Microsoft and Anthropic have publicly pledged to pay higher electricity rates to cover their costs. Many tech companies are also building their own power plants, largely fueled by natural gas, as Meta is doing with a data center in El Paso, Texas.
“We absolutely want to pay our fair share of all costs associated with serving us,” Briana Kobor, head of energy market innovation at Google, told a recent gathering of utility regulators in Washington.
Experts say that such pledges could potentially help curb electricity costs for everyone else but the effects would depend on the specifics of the plan. “If you could wave a magic wand and have tech companies pay for every nickel that’s being spent on infrastructure, that would have a significant effect,” said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University.
“But it gets complicated in practice,” he said. “There are a lot of big question marks here.”
It can be difficult to figure out which expenses should be assigned to new data centers, such as the cost of upgrading transmission lines. The contracts that data centers sign with local utilities are typically confidential, which can make it hard for the public to verify whether tech companies are paying all of their associated costs. In some parts of the country, regional grid operators and regulators may also need to rewrite complex rules on how to allocate their costs.