I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
I keep hearing how everyone’s electric bills are going up with AI data centers near them. Why aren’t the companies paying the bill? Or is it building the infrastructure to accommodate them the issue?
The same way you pay more for gas in summer or when the economy is doing well: demand is higher so prices go up.
Don’t forget that when the bubble pops companies holding the bag will be trying to recoup their initial capital so the price won’t go down.
I’m not sure about that. The way I see it, there will be more supply for the below-expectation demand, which would make prices go down
Let me introduce you to a little scam called “price stickiness”
Basically prices are quick to go up but VERY SLOW to go back down… on the opposite side, wages are quick to go down but VERY SLOW to get back up
I never said it would happen immediately 😉
well, if it won’t happen in our life time, I assume it to be “never”
They can turn off some generators and adjust the supply down for ideal revenue/profits, reduce staffing levels, and extend equipment life. There’s no reason for them to charge you $50 for something once you’ve told them you’ll pay $100 for it.
You should listen to some of the recordings of the energy traders at Enron. They did this stuff all the time.
Still nothing terribly new here. Energy has always had inelastic demand, meaning usage doesn’t change much with price. Whether gas costs 1, 3, or 5 dollars people still need to get to work and will still buy stuff. Maybe people will start to combine trips or whatever with higher prices, but nothing huge.
Exactly, so there’s never a reason to bring down the price. If anything you’d bring down the supply (e.g. Enron during the California energy crisis).
I mean… Gas prices are relatively low right now, at least here in 'Merica. I’ve seen them more than double what they are now, how did that happen?
Gas isn’t energy, it’s fuel. It’s a commodity with a global market. Producers have to physically store it. Refined gasoline has a shelf life and production is planned weeks to months in advance. If demand falls off their product depreciates and they have storage expenses. If a gas company cuts production below demand competitors can ramp up and eat that market share because consumers have options.
But electricity tends to be a captured, monopolistic market. There’s no scalable physical storage. The supply is whatever they are producing locally right now and they have some say in that. There’s no tanker of Saudi electricity coming to relieve the market and you’re not going to drive your house to a filling station to top off your electricity.
Liquid natural gas is similar, in that most people will just pay whatever is asked for what’s pumped into their homes, but less dramatic because it is a physical commodity that can be replaced or substituted.
It absolutely is. Do I need to explain why that’s a ridiculous take, or have you had enough coffee by now to realize it?
Ah, but you are forgetting about corporate greed and industry collusion.
Which wasn’t a factor before? 😉