When Big Tech signed President Trump’s Ratepayer Protection Pledge in March, promising to pay for all the new grid infrastructure upgrades required to service their data centers, we cautioned that “voluntary pledges from trillion-dollar tech giants have a habit of evolving.“
Seven months later, the hyperscalers are pushing back on how much of the grid’s bill is theirs to pay.
The past week brought a Democratic Senate report and a North Carolina utility settlement, and FERC is expected to rule on whether new data centers must bring their own power.
But before anyone grabs a pitchfork, ask the question none of them answers: how much of this bill is really AI’s, and how much is the cost of decades of grid neglect?
On Friday, Senators Elizabeth Warren, Chris Van Hollen and Richard Blumenthal released Power and Profits, the result of a nearly yearlong investigation into seven data center operators including Amazon, Google, Meta and Microsoft. The headline finding is as you would expect: the companies’ promises to cover their full costs apply to infrastructure serving only their own facilities, not the full cost of shared grid upgrades their arrival triggers.
The companies broadly opposed the “but-for” standard consumer advocates are pushing, under which a data center pays for any shared upgrade that “would not have been built but for the data center.” One hyperscaler told Senate staff that such upgrades often provide a “system benefit which should be shared among all ratepayers.”
They also balked at minimum bills, which advocates want set at 80% to 90% of contracted demand whether the power gets used or not. One Big Tech firm called a 90% floor “insanely high.” Another called 85% to 90% “unreasonably high,” since facilities often don’t use all of their projected demand.
Two days earlier, Duke Energy announced a settlement, signed by Amazon, Google, Meta, Microsoft and North Carolina’s utility consumer advocate, that it says ensures data centers “will pay upfront for all costs to connect to the grid.“
The settlement itself is more nuanced. Data centers prepay the full cost of equipment that serves only them, such as a dedicated substation. For shared transmission upgrades, they post a letter of credit covering the estimated cost, collateral that starts shrinking once the facility consistently draws 75% of its contracted demand.
Whether data centers get directly charged for any slice of those shared costs is punted to a Duke study due a year after approval, and would apply only to future contracts.
