Data Centers Are Not the Problem. Bad Policy Is.

“Cato’s Travis Fisher and Huddleston have an even better idea: Let data center developers contract directly with private generators or build their own power, through “consumer-regulated electricity” (CRE) reforms: 

[CREs] allow for privately financed, off-grid electric utilities to serve new customers under voluntary contracts. These utilities would be physically “islanded” from the regulated grid and would not be subject to economic regulation at the state or federal level. Because they would not interconnect with incumbent systems, CRE utilities would impose no costs, reliability risks, or stranded-asset exposure on existing customers.

Letting these giant, cash-rich companies pay their own way makes abundant (pun!) sense, yet utility regulations and related factors make that impossible in most places. And that, not data center demand, is the problem. Fortunately, as Fisher writes, there are some positive developments in this regard: A few states have already begun experimenting with CRE, and the White House’s voluntary Ratepayer Protection Pledge, signed by most hyperscalers, gestures at similar principles. But much more needs to be done—and fast.”

https://thedispatch.com/newsletter/dispatch-markets/data-center-water-electric-taxes-benefits/