(Photo from Amazon website)
- Kelley Williams says there’s more to the data centers story as electricity demand increases.
“Who you gonna’ believe? Me or your lying eyes.” Substitute Entergy’s spokesperson for Chico Marx, and you have the current gaslighting telling you don’t believe what you see happening in other states and what common sense tells you will happen here. Just trust Entergy not to raise electric rates for small customers to benefit Amazon’s data centers.
And don’t worry that Senate Bill 2001 sidelines Mississippi’s Public Service Commission (PSC) and runs interference for Entergy. Mississippi’s politicians and economic developers who passed SB 2001 say economic development is more important than affordable, reliable electricity.
SB 2001 makes Mississippi more vulnerable to monopoly utility abuses than other states — which are waking up to data center effects. The Washington Post’s recent “Data Center Backlash” highlighted these effects: “Data center projects dramatically increase load, costs, and planning complexity for utilities especially electric and water systems if not paired with new capacity, demand management, and clear cost-allocation rules.”
SB 2001 gives Entergy clear exceptions to capacity demand management and cost-allocation rules for spending (investments) related to Amazon’s data centers. And the more Entergy spends for Amazon’s plants, transmission lines, substations, etc., the more it makes (guaranteed 10%+ return). And since the plants, transmission lines, substations, etc. for Amazon also serve small customers, Entergy says it’s only fair that they pay for part of the spending.
And not to worry that the spending is padded to expedite service for Amazon, and is not subject to competitive bidding, and that rate increases for small customers are unlimited (SB 2001 removed a 4% annual cap on rate increases).
The WP says this about cost shifting retail rates. “In states with dense clusters of facilities, residential electricity rates have risen notably as infrastructure costs are socialized across all customers.” “If data center demand is over-forecast or projects are cancelled after utilities invest, other ratepayers can be left paying for underused plants and wires that were justified primarily by expected data center growth.”
Entergy’s Chico says not to worry. There are no dense clusters of facilities in Mississippi. True, but what happens when other opportunists take advantage of future sweetheart political deals — justified in the name of economic development? Also remember Amazon’s load is large relative to Entergy’s residential demand, which is only about a third of utilities’ residential demand in other states with clusters of facilities. So it doesn’t take a cluster here to distort Entergy’s residential rates. Amazon is big enough by itself. Especially with SB 2001 carve-outs that favor Amazon and Entergy at the expense of residential customers.
There’s another residential rate increase lurking due to Amazon that flows straight to small customers. The WP says: “Higher wholesale and capacity prices. Large, round-the-clock data centers’ loads increase demand, which can push up wholesale energy and capacity prices that flow through to customers’ bills.” Entergy buys imported electricity from the grid to meet system demand when it can’t generate enough electricity. Data centers increase the cost of this electricity and demand for it. This high-cost electricity flows directly to residential customers’ bills. Amazon makes it more likely that Entergy will import high-cost electricity for residential customers.
There’s more to this data centers backlash story. It may be too late to save Entergy’s small customers from higher rates due to Entergy and Amazon’s sweetheart deal. But it’s not too late to help them understand that their rates are going up to benefit Amazon and Entergy because of legislators who say economic development will help Entergy’s poor customers (who already spend more of their income on energy than customers in any other state) have better lives.
Maybe in theory. But as Yogi said: “In theory, there’s no difference between theory and practice. In practice, there is.”
