Voter anger over the cost of living is hurtling forward into next year’s midterm elections, when pivotal contests will be decided by communities that are home to fast-rising electric bills or fights over who’s footing the bill to power Big Tech’s energy-hungry data centers.
Electricity costs were a key issue in this week’s elections for governor in New Jersey and Virginia, a data center hotspot, and in Georgia, where Democrats ousted two Republican incumbents for seats on the state’s utility regulatory commission.
And guess what: even if (when) the AI bubble bursts, power bills are still going to remain high anyway because of all the extra capacity utilities are scrambling to build to accommodate it. That infrastructure doesn’t go away just because the business case for it does.
Even if it did go away, it wouldn’t matter… Price goes up, price stays up. That’s how a disregulated economy works.
Just like what we saw during the pandemic, prices artificially went up and they haven’t gone down
And electricity prices permeate thru a whole lot of other prices as oil does. So this is inflationary. How much, I don’t know.
Volume of electricity used is very correlated to gdp. Price depends on what specific electricity generation technology is switched on to meet the extra demand. That can get very pricey (see Texas for examples).
Power prices are set at the bid price of the last generation unit that is needed. Usually this is the running cost of that unit, with no additional premium for installation costs.
In a competitive market the infrastructure costs can only be reclaimed if demand remains high.