From TIME · John Farrell · · 2m
Why your power bill keeps climbing
Data centers are not the real problem. America's 100-year-old electricity system is.
In brief
Data centers are not the real problem. America's 100-year-old electricity system is. Electricity rates have risen thirty percent in five years. The cause is not data centers but an outdated monopoly utility model that blocks cheaper local power generation. Originally reported by TIME.
The real culprit behind rising bills
Electricity rates have risen thirty percent in the past five years. The typical American household pays an extra three hundred dollars annually. But data centers are not the main cause.
An outdated system from the 1900s
The U.S. still runs its economy on a one hundred year old utility model built for the early nineteen hundreds. Using this antiquated electricity delivery system in the modern era has large and widespread consequences.
Utilities are shutting off power
Utilities in at least eight states are preemptively shutting off electricity service. Some states are responding to threats of catastrophic wildfires often sparked by their own utility equipment.
How monopolies took over
From the mid nineteen nineties to two thousand fifteen, mergers shrank the number of investor owned utilities by almost half, even as electricity use rose twenty percent. Congress repealed key provisions in two thousand five.
Utilities block cheaper alternatives
Utilities have crushed potential competitors by using loopholes in infrastructure planning rules, lobbying for right of first refusal laws, and adding high fees to grid connection for solar and batteries.
Local power could meet all demand
Research by Rewiring America suggests that nearly all forecast demand from data centers could be met with residential or business clean energy assets such as solar, batteries, and heat pumps.
California proves the savings work
The gigawatts of rooftop solar installed by California home and business owners saved all in state utility customers over two billion dollars in two thousand twenty four alone.
Break up the monopolies
Only breaking up for profit utilities and removing the profit motive from electricity delivery can end the perverse incentives that drive utilities to abuse their market and political power.
“Only breaking up for-profit utilities and removing the profit motive from electricity delivery can end the perverse incentives that drive for-profit utilities to abuse their market and political power.”
Restructure like AT&T was split
Like the federal government's breakup of AT&T fifty years ago, separating the public function of running the network from the competitive function of supplying services can unleash lower costs and innovations.
Put the public back in charge
Restructuring the utility system to tap fair and open markets run by accountable grid operators would build a cleaner, more efficient, and resilient grid better able to meet modern economy challenges.
The short version
Electricity rates have risen thirty percent in five years. The cause is not data centers but an outdated monopoly utility model that blocks cheaper local power generation.
