But most Americans would be surprised to learn that their bills will keep climbing—even if no new hyperscaler data centers ever show up. And that raises an even more revealing question: Why is the U.S. still running its economy on a 100-year-old utility model built for the early 1900s?
As a country, we should commit to adopting and linking new technologies like solar and battery storage, giving individuals and communities more control over power production and supply, and offering the cheapest and cleanest way to meet our power needs. However, the old monopoly utility system creates powerful incentives for companies to act against the public need for clean, cheap energy and to thwart existing public oversight mechanisms. Accelerating technological improvements for local power generation and resilience further widens the gap between the outdated utility model and the opportunities of a modern electricity system.
This revised regulatory framework held for 50 more years, but as an economic philosophy of “bigger is better” took hold in our national politics in the 80s and 90s, the fervor of market consolidation swept up the utility industry, too. From the mid-90s to 2015, mergers shrank the number of investor-owned utilities by almost half, even as electricity use rose 20%. The death knell of market competition came in 2005, when Congress repealed key provisions of its 1935 legislation and lifted a ban on utility political contributions, sharply reducing federal oversight and dramatically increasing political influence. Fewer and larger utility companies have meant more power for shareholders and poorer service for consumers.
This old and expensive utility model is increasingly at odds with remarkable technological innovations underway in the production and distribution of electricity. Research by Rewiring America suggests that nearly all the forecast demand from data centers could be met with residential or business clean energy assets such as solar, batteries, and heat pumps, much faster and more affordably than utility-preferred investments like large power plants and transmission lines. Similarly, community solar projects can be built in mere months and share electricity among many “subscribers” (including renters and others typically left out of rooftop solar adoption). This is why experts like myself believe that local resources can directly lower energy costs for millions of consumers and simultaneously make grids more resilient against climate events such as wildfires or storms.
We can prevent data centers—or the next big energy demand—from spiking energy bills, but it requires acknowledging two fundamental truths.
Second, 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.
The electricity monopoly model has failed, unable to reconcile central planning and private profits with electricity democracy enabled by modern technology. We can restructure our utility system to tap the best resources from fair and open markets run by accountable grid operators, if we break up the monopoly corporations that stand in the way. Putting the public back in charge would allow us to build a cleaner, more efficient, and resilient grid, better able to meet the challenges of the modern economy, and make good on the promise of this public service that Americans can depend on.
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