Who Pays for the Power

Wyoming got the principle right in 2016: the customer who causes the cost pays the cost. My job is to make sure that principle keeps holding as the loads get bigger, and that you can see it holding.

Where I stand: Data centers should pay the full cost of the power, lines and plants built to serve them, and households should be able to see the proof. Wyoming has a good rule on the books. It was written for one customer in 2016, and it needs an independent check now that a dozen more are lining up.

What I’ll do as your commissioner:

  • Ask the Public Service Commission for an independent, public review showing that large data center loads aren’t shifting costs onto household bills.
  • Work with the state Office of Consumer Advocate to get public cost studies for each major new connection.
  • Make sure the county comments on the state’s new rules for private power plants that serve data centers, so local air, water and road impacts are counted.

Click a topic to read more.

Someone has to pay for the wires

A single large data center can draw as much electricity as a city. Serving it can take new substations, new transmission lines and new power plants. Those cost millions of dollars, and the question for every household is simple: who pays?

How electric rates work, simply

In Cheyenne and much of Laramie County, electricity comes from Black Hills Energy (Cheyenne Light, Fuel and Power). Like any regulated utility, it recovers its costs from customers. The Wyoming Public Service Commission (PSC) decides which costs go to which group of customers: households, businesses or large industrial users. That decision, made in PSC cases most people never hear about, is where your bill is set.

Wyoming’s data center rate: the cost-causer pays

In 2016, the PSC approved a special rate for very large customers, the Large Power Contract Service (LPCS) tariff, designed with Microsoft for its Cheyenne data centers. Under it:

  • the data center pays for the lines and equipment needed to serve it;
  • its power is bought at market prices, outside the costs that set household rates;
  • the customer builds its own backup generation, which the utility can call on at peak times;
  • each customer gets its own contract, with its own rates.

The utility calls this “the cost-causer is the cost-payer.” Microsoft’s newest substation, about $39 million, is being paid for by Microsoft, and the utility told the PSC it will have “no impact on rates for any other customer.”

What’s changed since 2016

The rule was built for one customer. Today Black Hills serves about 12 data center sites for roughly 8 customers, and it is negotiating with about a dozen more. Google’s Project Tembo, south of Cheyenne, starts at 2.7 gigawatts and could grow to 10.

The protections may be holding. But the assurance that households aren’t paying comes mainly from the utility itself. At this scale, residents deserve an independent, public review that checks the numbers, and a fresh one every time a major new load connects.

Bring-your-own-power projects

Some projects plan to make much of their own electricity. Project Tembo, for example, will draw on Black Hills Energy, fuel cells and a nearby natural gas power plant. Generating on site can keep costs off the shared grid, but it raises new local questions:

  • Air: gas turbines and backup diesel generators need state air permits.
  • Gas and water: fuel supply, pipelines and cooling water.
  • Rules: the PSC is now writing rules for private “non-utility” generators that sell power directly to data centers (Docket 90000-193-XO-26), and public comments are open.

Those rules will shape Laramie County for decades. The county should be in that conversation.

What a county commissioner can do

The county doesn’t set electric rates. It can still make sure residents are represented where rates are set:

  • Speak up at the PSC. File public comments in data center cases and rulemakings, and ask to take part formally where the county has a stake.
  • Ask for the numbers. Request public cost studies before large loads connect.
  • Work with the Office of Consumer Advocate, the state office that represents ratepayers in PSC cases.
  • Connect the dots. Power, water and roads are approved by different offices. The county is the one place where all three meet.

Growth should pay for itself

Wyoming got the principle right in 2016: the customer who causes the cost pays the cost. My job is to make sure that principle keeps holding as the loads get bigger, and that you can see it holding.

Paid for by Committee to Elect Lynne K. Davis.

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