Big Tech data centres are driving up power bills

For years, electricity costs for the Belden Brick Company in Sugarcreek, Ohio, had been relatively stable. Last year, they surged by 90% — largely because of rising power demand from data centres in the region.

The 141-year-old brick manufacturer, whose products can be found in iconic buildings including the Texas Alamo and Notre Dame ​University, is seeing power bills rise mainly from a monthly capacity charge, which recently jumped from $1,600 a month to $12,000.

Belden Brick is among many manufacturers across America’s heartland where costs are rising as power-hungry data centers serving the artificial intelligence industry ‌proliferate.

Factory electricity bills, a core expense, are rising faster than for many homes and other businesses, according to a Reuters review of U.S. energy data and interviews with nearly a dozen manufacturers and industry advocates.

Federal, state and local governments responding to consumer anger and grid-stability concerns are pushing Big Tech to pay more for their expected demand. But some of their proposals lump in smaller factories with tech giants such as Meta and Amazon, whose power needs can dwarf even large manufacturers by a factor of 50.

Meta declined to comment. Amazon did not respond to a comment request.

Capacity charges are designed to compensate power generators for ensuring the grid has enough electricity for peak ​usage and to spur development of new supply. They generally account for about 10% of residential bills but can represent up to three times that for manufacturers, according to interviews with manufacturers, attorneys and energy experts.

Such fees have soared in the 13-state region covered ​by grid operator PJM Interconnection due to stagnant supply and demand from data centers, where one server warehouse can use as much electricity as a mid-sized town.

-Reuters