Data centers could cut your electric bill, Evergy says
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Data centers — notorious energy hogs — could actually lower your electric bill, Evergy says.
The big picture: The utility company says large energy users like data centers could take up a greater share of its costs — easing the pressure on household bills, even as electricity demand skyrockets.
Driving the news: Data centers require a massive amount of electricity, which is prompting concerns over new generation construction and power grid capacity.
State of play: Jason Klindt, senior director of external affairs for Evergy, says electric utility companies across the country are seeing "massive energy demands like we haven't seen, I would really say, ever."
- That's because of large-load consumers like data centers and advanced factories that build things like EV batteries and microchips.
- All that energy demand means utility companies need to generate more power.
- Generation infrastructure is typically paid for over time by the consumer, as is the case with several Evergy projects already underway, KCUR reports.
Yes, but: Evergy is asking regulators in Missouri and Kansas to approve new tariffs for big energy users, which would shift some of that cost to those companies, the Kansas City Business Journal reports.
- "We're working on rates that are both attractive to large customers, but also protecting our existing customers," Klindt tells Axios. "We don't want this to be a burden on any other customer class."
Case in point: In Ohio, the Public Utilities Commission voted to require data centers to pay a minimum of 85% of the energy they're contracted to use over 12 years, Axios Columbus reported.
The fine print: Klindt points to a 2020 study prepared for Kansas officials, which found that big energy users can actually dilute the average consumer's share of energy demand, reducing costs.
- Large-load users also pay a greater share of the fixed costs of a utility company, such as surplus energy during low-demand hours, which helps lower the burden on households.
- "Having somebody use that energy and pay for it is certainly helpful in terms of fixed costs," Klindt says.
What we're watching: Data center projects are also chasing on-site generation.