How to resolve AdBlock issue? 
By Pedro Nava, David Beier and José Atilio Hernández
Artificial intelligence and California have been intertwined from the beginning, and the technology is poised to deliver significant benefits - if consumers and workers are protected. We serve on the Little Hoover Commission - an independent bipartisan entity that has in the past two years released three major reports on AI, the most recent of which focuses on AI data centers.
Our central recommendation is to protect electricity rate payers and tell AI firms to pay their own way.
Our report comes at a time of an emerging national consensus on AI. The American people want the potential benefits of AI in health care and better services. But they are deeply worried about the costs. In the last year AI and electricity has gone from a third tier --even obscure --debate to being a top shelf concern across the country. California can cement its leadership role in AI when the Governor and the Legislature link arms to enact into law a set of comprehensive and enforceable -- and equally applicable statewide -- new laws that protect electricity rate payers and require the truly giant users in AI to pay for their own electricity.
There is understandable concern that data centers could raise electricity prices. Because of the centers’ enormous power use, they often require massive transmission projects that will be added to the grid – a cost that, under current rules, all ratepayers would have to bear.
But we believe there is an alternative vision that could help protect average consumers from shouldering the electricity burden created by data centers -- if the state takes certain steps to ensure that data center developers pay their share. In the best of circumstances, it’s even possible that data centers might lower electricity costs for average families.
That’s because a lot of your electric bill reflects the basic cost of building and maintaining the electrical grid, rather than generating the power you use. Those built-in costs of the grid are shared by everybody, and the more broadly they are spread, the less each individual or company has to pay.
Our report includes a series of recommendations to help ensure that data centers don’t push up electric bills for regular families, but we’ll focus here on just four.
First, data center developers should be on the hook to cover the costs they impose on the system. There are various ways to do this – Ohio requires that they buy at least 85 percent of the electricity they predict they will use, for example – but the exact mechanism is less important than the concept. If a data center says it will need a lot of power for the next 10 years, the company behind the facility – not other ratepayers – should bear the risk. If a data center requires expensive upgrades to the transmission system but then closes up shop a year later – economists call this a “stranded asset” – everybody else’s rates will go up, not down. California must make sure that doesn’t happen.
Second, California regulators should have access to all relevant information from data centers, such as how much power is used and when. That will help assess local impacts and improve planning for the future. Some reporting is required now, but the Legislature should ensure that regulators have access to the data they need.
Third, data centers should be integrated into the grid in a way that ensures the reliability of the system. For example, during grid emergencies – think of a hot summer day that spikes demand and pushes the grid to the breaking point – data centers should be required to curtail their power use.
And fourth, California should make sure we don’t sacrifice our clean-energy goals because of data centers. Climate change remains a critical challenge, and Californians are justly proud that we have led the way in transitioning to a cleaner electrical supply. That must remain a priority. One example: require that data centers have clean back-up power supplies, so that if they must temporarily shift away from using power off the grid, they don’t rely on, say, polluting diesel generators. That shift away from diesel may take some time, but the system needs to move in that direction.
The AI data center boom is the biggest and fastest capital construction project in American history -- bigger than the space program and the Interstate highway system and occurring in a shorter time frame. Alternatively, think of data centers that require the electricity of Seattle and build hundreds of them simultaneously. We owe all Californians a strong, sustainable future where the risks to electricity rates are not borne by rate payers.
Pedro Nava is Chair of the Little Hoover Commission. David Beier and José Atilio Hernández are members of the Commission, and served on the subcommittee that oversaw the study on data centers.