As policymakers look for ways to shield utility customers from rising power bills tied to data center development, a new paper from the Electricity Law Initiative at Harvard University said consumers are already paying a price.
Ari Peskoe, executive director of the initiative, and Eliza Martin, a legal fellow at the initiative, dug into 40 regulatory proceedings across the country and found data center infrastructure costs are finding their way into power bills — to the benefit of utilities that earn a return on those investments.
“Hiding subsidies for trillion-dollar companies in power prices increases utility profits by raising costs for American consumers,” the authors said.
One example is a $23 million substation in Virginia that “likely, if not certainly, would not be needed at this time” if not for data centers, according to staff of the state utility regulator. The utility said the project would be paid for through its regulated transmission tariff, half of which is ultimately assigned to residential ratepayers.
