This week, spokesmen from Google, Amazon, and other data center representatives testified before the Pennsylvania Public Utility Commission (PUC). They discussed the rise in demand for data centers, the energy demand that comes with them, and how state regulators can protect consumers from rising costs.
 
Our lives exist online. And online, the internet, is physically stored in data centers.

 

“With an average of 21 connected devices per household in the U.S., the role of data centers is expected to grow,” Lucas Fykes said, energy policy director for the Data Center Coalition. “As consumers and businesses generate twice as much data in the next five years as they did in the past decade.”

Data centers require massive amounts of electricity to operate.

“What we're seeing in load growth… is where one data center coming online is using the energy of a mid-size city,” Kimberly Barrow said, vice chair of the PUC.

Electric grids don’t have the energy supply to meet demand… so with small supply and lots of demand, prices are set to skyrocket. That’s where the public utility commission’s work starts.

“We want to make sure we're protecting consumers and our ratepayers from potential stranded costs for upgrades for load that may not come into play,”  Stephen DeFrank said, chairman of the PUC.

Pennsylvania’s PUC wants to create tariffs—extra fees and rules, and specific utility rates—for ‘large load customers’. This would apply to any entity that uses electricity that is pulling massive amounts of energy at once.

“The surge in data center electricity demand should be understood in the context of the much larger electricity demand that is expected to occur over the next few decades,” Fykes said, "from a combination of electric vehicle adoption, on shoring of manufacturing, hydrogen utilization, and the electrification of industries and buildings."

This week’s public hearing was a chance for regulators and data center owners to give input on how those tariffs work.

“The general idea is to capture a customer who is imposing new costs on the system,” Brendon Baatz, in energy market development with Google LLC.

Data center advocates want strict deadlines for things like feasibility studies or estimates for how long it takes to get connected to the grid. But, they want the fees they pay to match the size of projects, and for there to be flexibility in other parts of contracts.

“When we're waiting months to even a year for a study, it's very problematic, obviously,” Baatz said.

In turn, the PUC wants transparency on the final contracts agreed to between large load customers and the local energy companies selling electricity too them. Barrow also raised concern that utility commissions are getting inaccurate estimates of how much energy demand is expected.