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California passed a new fire safety law more than four years ago. It still isn’t in force.

For more than four years, California has had a law on the books meant to protect homes and buildings during an urban firestorm like the Palisade and Eaton fires. But it’s never gone into effect.
In theory, the policy was simple. It directed state officials to develop new rules for buildings in areas with high fire risk, which would govern what people were allowed to put within the five-foot perimeter immediately surrounding their homes. A large body of evidence shows that clearing this area, known in the fire mitigation world as “zone zero,” of combustible materials can be the difference between a building that alights during a wildfire and one that can weather the blaze.
The new rules — essentially just a list of items allowed in that five-foot zone — were due two years ago, by January 1, 2023. But the State Board of Forestry and Fire Protection has yet to begin a formal rulemaking process. Ask anyone who’s been following this thread what’s taking so long, and they’ll almost certainly point to one thing: politics.
“There’s a ton of science about what to do, but the science has run into challenges with social acceptance, and therefore political acceptance,” Michael Wara, director of Stanford University’s Climate and Energy Policy Program, told me. People do not want to be told how they can or can’t landscape or furnish or otherwise adorn the outside of their homes. Inevitably, when the rules do come out, you’ll hear about Gavin Newsom coming to take away people’s decks and policing gardens.
No one thinks that zone zero rules, if enacted and adhered to, could have prevented fires in the Pacific Palisades or Altadena or saved every structure in the recent fires’ path. But alongside other fire mitigation strategies, zone zero design can significantly lower the chances of a given building burning, and therefore the chances that a fire will spread to neighboring buildings, and ultimately reduce the risk of fires becoming compounding, devastating disasters. Wara likened it to car safety rules like seatbelts and airbags — people still die in car accidents, but far fewer than would otherwise.
The question now is whether the record-breaking destruction in Los Angeles will be enough to convince people that zone zero rules are effective and worthwhile. Past experience shows the answer is not an obvious yes.
There are three ways buildings ignite during a wildfire, Yana Valachovic, a forest scientist with the University of California Agriculture and Natural Resources Fire Network who specializes in community resilience and the built environment, told me. They are either exposed to burning embers, direct flames, or radiant heat, though most often a combination.
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Embers — hot, hard debris of burned material from a fire — can be carried miles away from their origin by the wind and create new spot fires next to homes. “What happens with those embers is they get thrown at the building, they hit the walls, the siding, and then drop to the base and collect at the base,” Valachovic said, “so you can have not just one, but thousands of embers at the base of our structures.”
Embers can also penetrate buildings through open windows and ventilation systems. If radiant heat from nearby burning structures causes windows to shatter or fall out, that can also create new vectors for embers to enter the home. “Embers find their way,” Valachovic said.
Fire mitigation experts promote two strategies for reducing vulnerability, and they go hand in hand. The first is home hardening, which could mean building with fire-resistant materials but also includes smaller but effective actions like covering air vents with fine mesh screens and sealing gaps to try to block embers. The second is creating so-called “defensible space,” or a buffer around the building, where any vegetation is carefully selected and managed to slow the spread of fire to and from the building. California divides defensible space into three different zones: Zone one extends from 5 feet away from the structure to 30 feet, and zone two goes out to 100 feet away. Then, of course, there’s zone zero.
The state has had regulations on the books to require at least 30 feet of defensible space in high-risk areas since 1965, and it updated the standards to establish a two-zone system in 2006. In both cases, the rules were “really framed around, how do you interrupt flames running at the building?” said Valachovic. The regulations included thinning trees and removing lower branches, clearing some trees that were closer to homes, clearing dead wood and litter, and pruning branches that hang over buildings. But they still allowed for vegetation right up against the house.
Since then, wildfire post-mortems have found that this scenario of flames burning a path to a building is not a primary driver of structure loss. “It was missing the point,” Valachovic told me of the previous rule structure. “What we’ve seen now for the last decade is that embers are really driving our home loss issue, and so we’re basically allowing all this vegetation and combustible material to be present in the zone that is really very vulnerable.”
In August 2020, after Governor Gavin Newsom declared a state of emergency in California due to an explosion of wildfires, the state legislature passed AB 3074, which finally sought to bridge the gap by creating a new, “ember-resistant zone” — zone zero. Had the rules been implemented under the timeline mandated by the law, new homes would have had to comply beginning in 2023, and existing homes would have had to comply beginning in 2024. Like the earlier defensible space rules, they would have applied to homes located in parts of the state designated as Fire Hazard Severity Zones. These are generally areas that you might think of as the “wildland-urban interface,” where homes abut wildland vegetation like forests or scrublands, but others extend into more urban areas. Almost all of the burned area in the Pacific Palisades, for instance, would have been subject to the rules, while only a small portion of the homes in Altadena are in the zone.
When I reached out to the California Natural Resources Agency, the umbrella group for both the Board of Forestry and Fire Protection and CalFire, to ask if there was an updated timeline for the regulations, one of the first things that Tony Andersen, the Deputy Secretary for Communications, told me, was not about the timeline but about the ultimate cost of compliance.
“We recognize there are costs associated with doing this work around homes and structures,” Andersen told me via email, “and we are focused on identifying options for financial assistance as well as education and outreach to help owners prepare and prioritize mitigations.” He then noted that the rulemaking was a “complex process” that the agency wanted to get right, and said it aimed to present a draft proposal to the Board “as soon as is feasible, most likely in the coming months.”
Andersen’s response illustrates one of several tensions that have made it difficult to write the zone zero rules — and will ultimately make them difficult to implement. If the rules say you can’t have a wooden deck, for example, or you can’t have a fence that touches the building, homeowners could face costly retrofits. And despite witnessing the horror of destructive wildfires, many homeowners don’t want to switch their wooden fence for a metal one, or replace their bushes with gravel.
Five feet might sound like a negligible amount of space, but people are attached to the aesthetics of this zone. Homeowners have become used to “softening” the line where the walls meet the ground by filling it in with vegetation, Valachovic told me. “We really developed this idea that we don’t visually want to see our foundations,” she said. “From a fire defense perspective, this idea that we have combustible material basically ringing our houses and our structures, that is problematic.”
Several people I interviewed for this story asked if I had seen a documentary about the aftermath of the 2018 Camp Fire in Paradise, California called Bring Your Own Brigade. The film captures a series of city council meetings in 2019, when officials were considering updating local building standards. They weigh a number of ideas that would reduce the risk of embers collecting on top of, inside, or next to homes, including eliminating gutters and requiring roof overhangs and a five-foot setback for any combustible material.
At the time, the Camp Fire was the deadliest and most destructive wildfire in state history, killing 85 people, displacing more than 50,000, and destroying more than 18,000 structures. But during a public hearing, community members lashed out at the potential cost, warned that new standards would prevent displaced residents from moving back, and decried the aesthetic implications.
“Paradise is an individualistic town,” one person says. “That’s part of the charm and the quirkiness. We don’t need consistency and uniformity.”
In another scene, a city councilmember asks Paradise Fire Chief John Messina to narrow down the list to just one rule that would make the community more fire resistant. “That five-foot barrier around your house is extremely important,” he replies. “That would be the No. 1 thing out of all of this that I would say would defend your home the best and have the most impact.” Shortly after, the council votes down the measure.
Michael Wara, who recalled the scene to me over the phone, said a similar thing happened when the fire chief in his community in Mill Valley tried to get the city council to adopt zone zero rules. “The word got out in the community that this crazy fire chief was going to make us rip up our front yards,” he said. When the council convened for a vote, more than a thousand people showed up to oppose it. The council ended up passing it as a voluntary measure.
To Wara, part of the problem is the language used to communicate these ideas with the public. “Zone zero” and “hardening” conjure a bunker mentality, he said. “I do not want my family to live in a bunker that is hardened to attack. I want my family to live in a home that is welcoming.”
He also thinks the state can reach a compromise, like allowing succulents and other fire-resistant greenery in zone zero. The rules don’t have to turn these areas into gravel and concrete wastelands to be effective.

The Los Angeles County Fire Department recently included photos in a notice to homeowners about defensible space rules and the upcoming zone zero regulations that illustrate how landscapes might strike that balance. The images feature stone walkways immediately next to homes, followed by raised beds made of metal and concrete containing attractive landscaping. Not quite “quirky” and “charming,” but far from a barren dystopia.
Despite the delay in implementing zone zero, California has tried to pitch it as part of a strategy to solve the state’s insurance crisis. In 2022, Insurance Commissioner Ricardo Lara enacted new rules requiring insurance companies to provide discounts to homeowners who do home hardening retrofits and create defensible space.
“That’s terrific,” Dave Jones, the director of the Climate Risk Initiative at the University of California, Berkeley, and Lara’s predecessor as insurance commissioner, told me. “But you don’t get the discount if they won’t write you the insurance.”
Jones said the bigger issue is that the models insurance companies use to decide whether or not to write a policy do not account for fire mitigation efforts. A homeowner could take every action on the list for home hardening, create a zone zero, live in a community that’s investing in aggressive fuels reduction, and so on, and insurance companies could still deny them coverage. Last year, Jones wrote a bill that would have required companies to change the models they use to determine coverage to account for mitigation. Several insurance industry trade groups opposed the bill, arguing that it was “premature and impossible to implement given the real-world data constraints,” and that it was “inconsistent” with the state’s efforts to “restore a healthy and competitive insurance market.” It didn’t pass.
If following zone zero guidelines meant having a shot at getting insurance, maybe people would be more open to doing it, Jones argued to me. But as things stand, that’s not the case. “I don’t think the failure is so much in the state developing the standards as it is in the lack of political courage to stand up to the insurance industry and say, hey, look, enough is enough. We’re going to pass a law to require your models to account for this.”
This past year, the California legislature passed a law giving existing homes three years, instead of just one, to comply with zone zero rules once they are finalized, whenever that is. And if the regulations are finalized this year, it’s possible that some of the rebuilt structures in the Pacific Palisades and Altadena will have to meet them.
Ultimately, Valachovic sees hope in fire mitigation work. The narrative that climate change is driving these destructive wildfires can make people feel helpless. But there are so many low-cost, simple things people can do to reduce their exposure. “I just feel like we have a moral imperative to share practical, reasonable actions that people can take to make a difference, and to know that with that, the odds improve substantially.”
Editor’s note: This story has been updated to clarify the role of the California Natural Resources Agency in the rulemaking process.
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It’s an off-off-cycle election year, but there are still a handful of key elections going on in Georgia, New Jersey, and Virginia.
With the Trump administration disassembling climate policy across the federal government, state elections are arguably more important to climate action than ever.
Here are the key races we’re watching where clean energy, public transit, and other climate-oriented policies are on the ballot.
There are only 10 states in the country that hold elections for a Public Service Commission, a small group of regulators who oversee utility companies, and Georgia is one of them. As Charles Hua, the executive director of the nonprofit PowerLines, recently put it, these officials are the “Supreme Court justices” of energy. They preside over what kinds of infrastructure gas and electric utilities will build, where they’ll build it, and how much rates will go up as a result.
The election in Georgia is long overdue after being held up by a lawsuit the last two election cycles. Two of the five current commissioners have served three extra years without being re-elected by voters. During that time, the commission has approved six rate increases for customers of Georgia Power, the largest utility in the state, in part to pay for major cost overruns on new nuclear reactors at Plant Vogtle. Now Georgia Power is proposing a major expansion of natural gas power — about 10 nuclear reactors’ worth — mostly to meet data center demand.
The two seats are held by Republicans Fitz Johnson and Tim Echols. They are being challenged by Democrats Peter Hubbard and Alicia Johson, who have vowed to push for Georgia Power to meet demand with clean energy.
Energy costs are at the center of the governors’ races in New Jersey and Virginia this year, and Democrats and Republicans are making opposite arguments about how to lower them. In New Jersey, Democrat Mikie Sherrill has vowed to freeze utility rates and clear red tape to “open the floodgates on new cheaper and cleaner energy projects,” including solar, battery storage, and nuclear. Her opponent, Jack Ciattarelli, thinks the key to lower prices is pulling out of the Regional Greenhouse Gas Initiative, a 13-state cap and trade program that incentivizes cleaner power generation and raises money for climate-friendly projects. He also wants to repeal the state’s electrification goals for vehicles and buildings and ban offshore wind development.
A similar fight is playing out in Virginia, although there it’s tied more to the state’s rapidly multiplying data centers. Virginia is already home to 13% of global data center capacity, with more coming online. A recent state legislative report warns that customers are looking at increases of $14 to $37 per month by 2040 as a result.
The Democratic candidate for governor, former U.S. Representative Abigail Spanberger, wants to expand solar and wind power and invest in building efficiency. She’s also advocated for data centers to “pay their fair share” of new energy infrastructure, and said she will encourage them to pilot advanced clean technologies like small modular nuclear reactors and hydrogen. She’s running against Winson Earle Sears, the current lieutenant governor of Virginia, who has questioned the reliability of renewable energy, arguing for an all-of-the-above strategy that includes “clean coal.” While “beautiful clean coal,” it may be one of Trump’s favorite energy sources, the reality is, it’s still just coal.
The governor’s seat isn’t the only one that’s up for grabs in Virginia. Whoever wins will need the House of Delegates on their side. Democrats currently have a razor thin 51-seat majority, and all 100 seats are on offer. Even a blue wave in the House doesn’t guarantee strong climate action, however, according to the nonprofit advocacy group Climate Cabinet. “Which candidates win will determine whether Virginia expands on” its climate law, the Clean Economy Act, “or backslides,” the group said in a “races to watch” memo.
Voters in Charlotte, North Carolina, and the whole of Mecklenburg County, will be asked whether to increase their sales tax by 1% to fund new transportation projects. Roughly 60% of the estimated $20 billion raised by the tax will go toward the expansion of rail and bus service. Charlotte is among the fastest-growing cities in the country. During a legislative hearing this summer, State Senator Mujtaba Mohammad said an average of 130 people move to the area each day. “We are experiencing longer commutes, more car accidents, higher car insurance premiums, more pedestrian-related accidents and less revenue to address our crumbling critical infrastructure," he said.
The Charlotte Area Transit System finalized a new long-range plan this year to foster “transit-oriented communities,” by increasing bus frequency, extending service hours, adding microtransit options to underserved neighborhoods, and adding 43 miles of new rail. But the plan is only possible with funding from the sales tax.
Sales tax increases are a common way to raise money for public transit systems — legislators in California recently voted to put a sales tax increase on next year’s ballot to address a looming fiscal cliff for transit in the Bay Area. Illinois also voted last week to increase the sales tax in the Chicago area by 0.025% to raise money for its ailing transit system, among other measures.
A few smaller elections where climate is also on the ballot this year, according to Climate Cabinet:
A new report from the Rhodium Group finds that the range of likely temperature outcomes has essentially not changed since 2023.
It’s that time of year when COP, the annual United Nations climate conference, draws near, and a flood of reports assess how much progress the world has made (or not made) to limit global warming. Given the sharp reversal in U.S. climate policy under President Trump, it may seem inevitable that the future will look bleaker than before. His administration has spent the past nine months dismantling nearly every bit of domestic climate policy implemented by its predecessor, and has even managed to thwart international efforts at climate cooperation.
The annual climate outlook from the Rhodium Group, a U.S. energy and climate research firm, offers a somewhat hopeful counterpoint to that narrative, however. It finds that the range of possible climate futures has essentially not changed in the past two years.
A full decade has passed since the landmark Paris Agreement on climate change, and in that time the world has avoided the most catastrophic scientific projections. In 2015, the UN’s Intergovernmental Panel on Climate Change, or IPCC, projected that global average temperatures could increase by as much as 7.8 degrees Celsius by the end of the century without significant shifts in policy and advancements in technology. Now, the Rhodium Group estimates that warming is highly unlikely to exceed 3.9 degrees by 2100, and could be limited to 2 degrees.
The numbers themselves are not hopeful. This is a vast range in terms of the potential impacts implied, and even 2 degrees of warming should not be considered “little.” The IPCC estimates that compared with a scenario that limits warming to 1.5 degrees, more than twice as many people would be exposed to severe heat at least once every five years in a world 2 degrees warmer; ice-free summers in the Arctic would occur 10 times more often; the number of plant, animal, and insect species that lose at least half their habitat would be two to three times larger; and crop yields and fisheries would suffer roughly twice the losses.
Putting those dire projections aside, what’s interesting is that this 2- to 3.9-degree range is about the same as what the Rhodium Group forecast when it published its first Climate Outlook report in 2023. Also relatively unchanged: a finding that global power sector emissions will peak within the next decade, and that total emissions will likely remain constant or subtly decline through 2060, but then go up again as Global South countries see more rapid economic development in the latter half of the century.
The reason the numbers haven’t changed much, despite some seemingly dramatic policy changes that have occurred in the interim, has to do with Rhodium’s unique approach to projecting the future.
Many of the reports that come out around this time, such as the UN’s annual Emissions Gap Report, try to assess where the world is headed based on currently enacted policies as well as pledges, such as the “nationally determined contributions” that countries submit to the UN. Those might include promises like, “We’ll build X quantity of renewable energy by 2030,” or “We’ll protect X amount of our forests.” The models assume that these policies and pledges are fixed. They do not contemplate future ramp-ups or potential reversals. They also use fixed assumptions about GDP and population growth, oil prices, technology costs, etc.
A recent report by Wood Mackenzie, for example, estimates that temperatures will climb to 2.6 degrees by 2060, and then models a few other potential discrete scenarios, including one that shows what it would take to limit warming to 2 degrees.
The limitation of this approach is that the trajectory for each variable these models use is deeply uncertain, Hannah Pitt, one of the authors of the Rhodium report, told me. “Even a small change in GDP growth can have really big implications for emissions — likewise for oil prices and renewable costs and all that,” she said. “We try to take into consideration the wide range of uncertainty we have in the future of those core drivers of emissions.” That requires modeling thousands of scenarios with different combinations of how those underlying drivers might evolve.
Then, rather than assuming that policies on the books today remain static, Rhodium uses data on how climate and energy policy has historically responded to economic inputs like oil prices and GDP growth, in different parts of the world to project how policy might change going forward, using a carbon price as a proxy for policy ambition.
This approach takes into account such a wide range of possibilities that the results aren’t likely to change much year to year. Both in 2023 and now, the modeling incorporated the prospect that a Trump administration or something like it could reverse some progress, and that energy demand could soar. “We are looking at the long-term evolution of policy, not the administration fluctuations,” Pitt explained. It would take a true step-change in policy or a major technological breakthrough to produce a noticeable change in the trajectory, she said.
What are those breakthroughs? At this point, they aren’t a mystery. Cheaper clean firm power — like advanced nuclear, fusion, or geothermal — would be a huge help. Solutions for decarbonizing flying and shipping are also on the list. We also need to make it affordable to produce iron, steel, cement, and petrochemicals with far fewer emissions.
On the policy side, bending the curve might mean something like stricter electric vehicle requirements. As mentioned earlier, economic development in the Global South is expected to shift emissions back upward later this century — in part because if policy evolves the way it has historically, and if more and more people around the world are buying cars, the cars may not be 100% electric, and emissions from transport will go up.
None of this is to say that the Trump administration’s actions will have no effect on warming. Recall the report’s expansive range of future warming scenarios of 2 to 3.9 degrees — it’s very possible that policies enacted today will push the world closer to one or the other. A separate recent Rhodium study that dives into the specifics of U.S. policies found that emissions in 2035 could be 0.8 to 1.2 gigatonnes higher than what the group projected in the same report last year, largely due to Trump’s policies.
It should be comforting that one administration can’t veer the world too far off course — although by that same logic, we can’t expect a single administration to shift projections in a positive direction, either. A "breakthrough" in something like decarbonized cement will likely happen over years, through a feedback loop of sustained policy support and technological development.
There is no “too late” when it comes to addressing the technology and policy gaps the report highlights, Pitt said “Of course, the sooner the better,” she said. “But the difference between a 2.8-degree future and a 2.5-degree future saves lives. So the effort to drive these technology costs down is worthwhile, even if it doesn’t happen on the timeline that we would hope.”
Utilities are bending over backward to convince even their own investors that ratepayers won’t be on the hook for the cost of AI.
Utilities want you to know how little data centers will cost anyone.
With electricity prices rising faster than inflation and public backlash against data centers brewing, developers and the utilities that serve them are trying to convince the public that increasing numbers of gargantuan new projects won’t lead to higher bills. Case in point is the latest project from OpenAI’s Stargate, a $7-plus-billion, more-than-1-gigawatt data center due to be built outside Detroit.
The project was announced Thursday by Michigan Governor Gretchen Whitmer, who focused heavily on the projected economic benefits of the projects while attempting to head off criticism that it would lead to higher costs. In the first sentence of her press release, she said that the project will “create more than 2,500 union construction jobs, more than 450 jobs on site and 1,500 more across the county.” Also, it “will be one of the most advanced AI infrastructure facilities in the U.S., especially when it comes to its efficient use of land, water, and power.” Oh, and it “will not require any additional power generation to operate.”
The utility set to power the project, DTE Energy, released its quarterly earnings Thursday, as well, which described a 1.4-gigawatt project it had already executed. In a presentation for analysts and investors, DTE said that the new data center would pay for “required storage through a 15-year energy storage contract,” and that it would “support affordability for existing customers as excess capacity is sold.”
On a call with analysts, DTE Energy chief executive Joi Harris further asserted that the project has “meaningful affordability benefits to our existing customers.” As the data center ramps up, she explained, it can use existing excess capacity on the grid. By the time it reaches full strength, it will enjoy the benefits of “nearly $2 billion of incremental energy storage investments and additional tolling agreements to support this data center load.”
Who will pay for energy storage and tolling agreements? A DTE spokesperson, Jill Wilmot, clarified in an email that “DTE will meet the 1.4 gigawatts of demand from the data center with existing capacity,” and that “new energy storage will be built — and paid for by the customer” — that is, Stargate — “to help augment times of peak demand, ensuring continued reliability for all customers.”
Data centers help spread out the fixed costs of the grid more widely, Wilmot went on. “Data center development in DTE’s electric service territory will not increase customer rates,” she said, adding that “DTE is ensuring the data center will absorb all new costs required to serve them — in this case, battery storage. Our customers will not pay.”
That said, Wilmot did not answer a question about whether there would be any network or transmission upgrades necessary. She told me that she expected DTE would make a filing for the project with Michigan regulators later Friday.
Consumer advocates were skeptical of the utility’s claims. “When you are talking about new demand as massive as what would be created by this data center, we can’t afford to just take DTE at its word that other customers won’t be affected,” Amy Bandyk, the executive director of the Citizens Utility Board of Michigan, told me in an email. She called for Michigan regulators “to require DTE and the data center customer to agree on a tariff specific to that customer that includes robust protections against cost-shifting and provisions that any incremental costs will be solely covered by this new customer.”
More utilities and data center developers are trying to explicitly head off claims that data centers are driving up electricity rates. In another recent data center announcement for a multi-billion-dollar project in West Memphis, Arkansas, Google and the Arkansas Economic Development Commission said that “Google will be covering the full energy costs for the West Memphis facility and will be ramping up new solar energy and battery storage resources for the facility.”
Drew Marsh, the chief executive of Entergy, the utility serving the project, confirmed on an earnings call earlier this week that Google “will protect energy affordability for existing customers by covering the full cost of powering the data center in West Memphis.” He also said that in Mississippi, where Amazon has announced a $16 billion project, “customer rates would be 16% lower than they otherwise would have been due to these large customers.”
So why are utilities — which, after all, get paid by ratepayers for the investments they make in their systems — telling their investors about all the money they’re not charging ratepayers?
In short, utilities and developers know they’re on political thin ice, and they don’t want to kill the golden goose of data center development by stoking a populist backlash to rising electricity prices that could result in either government-mandated slashing of their investment plans, caps on the rates they can charge, or both.
“Looking ahead, we anticipate the central issue will be how utilities protect residential customers from costs associated with large-load customers, or else face potential consequences from regulators,” Mizuho analyst Anthony Crowdell said in a note to clients earlier this week. “Data centers, and their associated load, have the potential” to “cause political push-back.”
This is already happening across the country. The frontrunner in the New Jersey gubernatorial race, Democrat Mikie Sherrill, for example, has promised to freeze electricity rates, which have seen a sharp runup in recent years. Indiana Governor Mike Braun, a Republican, said in a recent statement that “we can’t take it anymore,” in reference to rate hikes. Indiana has also rejected a number of proposed data centers, as I covered earlier this year.
This means that utilities will have to think carefully about how and to whom they allocate costs arising from data center development and operation.
“Allocation of cost will be pivotal as the current ’pocketbook issues driving a lot of the U.S. political debate could create some challenging regulatory outcomes should data centers put pressure on customer bills,” Crowdell wrote.
But what’s said in an announcement to the media or to investors may not always reflect the reality of utility cost allocation, Harvard Law School professor Ari Peskoe told me.
“Don’t trust a utility press release or comment from a CEO of a monopoly that says Hey, these rates are good for you,” he told me.
Peskoe told me to pay close attention to the regulatory fillings utilities make for their data center projects, not just what they tell the press or investors. “Are the utilities themselves actually making these claims as strongly as their CEOs are making them in investor calls? And then once we do have a regulatory process about it, are they being transparent in that regulatory process? Are they hiding a lot of details behind the confidentiality claims so that only the participants in that proceeding actually get to see the details?”
Peskoe also pointed to other costs that might be incurred in the course of data center development that get socialized across the rate base but aren’t necessarily directly tied to any one development, like the transmission and network upgrades, that have contributed to large price increases in the PJM Interconnection territory.
“What you’re looking for is a firm contract that ensures the data center is going to be paying for every penny that the utility is incurring to provide service, so that it’s paying for all the new infrastructure that’s serving it,” Peskoe said. Without that, all you have is a press release.