My fellow pro-growth/progress/abundance Up Wingers in America and around the world:
What problem does a data-center moratorium solve, exactly? As these warehouse-sized supercomputers face growing public backlash, they’re blamed for higher electricity bills and strains on the power grid—all while failing to provide enough jobs or tax revenue. But are they actually the problem, or are they exposing problems that have existed for years in America’s electrical grid?
Today on Faster, Please!—The Podcast, I am joined by Shuting Pomerleau, the director of energy and environmental policy at the American Action Forum, where she studies electricity markets and energy policy.
We discuss New York’s controversial decision to pause construction of large data centers, whether AI is really driving up electricity prices, the economic benefits of data centers, who should pay for expanding the grid, and how states should respond to growing demand for power.
In This Episode:
* New York’s Data Center Slowdown (0:16)
* Dealing with Demand (7:09)
* What is the Right Step Forward? (14:24)
* Who is Paying Up? (19:27)
* Can Regulation Fend Off Data Center Growth? (23:39)
* Where Do Data Centers Go from Here (27:44)
A lightly edited transcript of our conversation will appear in my Week in Review issue on Saturday. (Another option is using the Substack auto transcript function.)
But here are some edited highlights from the chat:
On New York’s data center moratorium…
My concern is that pausing this will send a very strong signal to investors, data centers and developers, a very chilling signal saying, “you’re not really welcome here.” This is such a fast-moving space. One year is actually a lot of time.
On what’s really driving electricity price increases…
What has been really driving the electricity increases mostly in the residential sector is the local distribution system—the maintenance, repairs, upgrades that cost a lot of money. It was almost like a coincidence with the AI data center boom and the sentiment against AI. We see that in electricity prices, but if you look into the real price level changes, it’s still quite flat both at the state level and across the country.
On the policy challenge of funding AI infrastructure…
What is a fair share? That is a question that has always been on my mind. The data centers are not all sitting there across the country doing their own thing separate from the remaining population. They’re providing digital services and great services for us, you and me, using AI. So, what is a fair share? How can they pay exactly how much they use?
On the economic benefits of data centers…
The opposition to AI data centers is probably one of the biggest pieces of misinformation out there. The right way to look at it is these are businesses that are paying taxes; they’re paying property taxes. If you look at Loudoun County, about 90% of the county’s operating budget comes from data centers.
On whether regulation can slow the AI data center boom…
I think of the AI data center boom in the United States as a fast-moving train. It’s going to move; it’s going to happen. I think the New York States moratorium, some of the local opposition across the countries may slow down some of the application of development, but not very significantly. I think what will have a material impact on the pace of AI data center development is all the discussion about who’s paying for it.
On what needs to happen with data centers…
First, permitting reform. It will alleviate the burden off of a lot of people’s minds, and a lot of stakeholders’ minds. Two is, we really need some reform in our grid, in terms of interconnection. I would say interconnection is your keyword, both on the generation side, connecting to generation sources and to large load customers.
On sale everywhere: The Conservative Futurist: How To Create the Sci-Fi World We Were Promised
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit fasterplease.substack.com/subscribe
