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AI supercomputers need lots of electricity. Should California raise their bills?
An Amazon Web Services data center in Hilliard, Ohio, under construction. Ohio is one of several states moving ahead on regulations for data centers.
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Brian Kaiser
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Bloomberg via Getty Images
)
Topline:
California is falling behind other states in building data centers that power artificial intelligence supercomputers, as well as putting guardrails around their environmental impact. Democratic state lawmakers are now exploring rules for data centers aimed at protecting sustainability and energy affordability.
What’s on the table: Democrats are considering new special electricity rates for data centers aimed at controlling costs for other customers, similar to policies in Indiana, Ohio and West Virginia. They’re also weighing new energy reporting standards to better understand the supercomputers’ impacts on California’s electric grid.
Why now: Electrical utilities are embracing data centers as a catalyst for increasing electrical demand (and padding their bottom line) following an era of energy efficiency. PG&E anticipates new data centers coming to Northern California will require power equivalent to 6.5 million new homes in the next 10 years.
Walk the tightrope: Environmentalists and ratepayers argue an influx of new data centers could, if not managed properly, leave ratepayers with costly stranded assets, or even outpace the growth of renewable energy on the grid. Big Tech-backed lobby groups, however, fear aggressive new rules will make California a less attractive option for building advanced tech infrastructure.
The kicker: if lawmakers don’t find a way forward soon, they risk losing a critical sector of the booming AI industry to other states, while simultaneously failing to align data centers already in California with the state’s ambitious climate goals.
Go deeper: The full story is in POLITICO's California Climate newsletter.
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