Fueling AI Data Centers

By Larry Huss,

Like lemmings to the sea, liberals and progressives are lining up to delay, block, or otherwise hinder the development and deployment of artificial intelligence (AI). Maine has rushed to be first, but it will soon be followed by Minnesota, Washington, Oregon, Virginia, New Jersey, and New York. (I would have included California, but they seem fixated on protecting or destroying the career of Rep. Eric Swalwell (D-CA), who is running for governor but is really facing the demons created by his own libido.)

Maine’s governor, Janet Mills (D-ME), now seeks to ban the development of AI data centers. Her argument—and it is a valid one—is that the amount of electricity necessary to power these AI centers will overwhelm the public power grid, resulting in blackouts and brownouts and imposing undue costs on regular ratepayers to expand generation and distribution facilities. The problem with Ms. Mills’s solution is reflective of the liberal and progressive inability to think outside the box; every decision is a series of straight-line choices. It is reminiscent of former President Barack Obama, who saw appeasement as the only alternative in dealing with belligerent governments (Iran, Venezuela, Cuba, Syria, Hamas, Hezbollah, etc.).

For the cognitively challenged Ms. Mills, the only choice is between draining an already strained public utility network and denying the expansion of AI. But there is another choice that not only eliminates the additional burden on the public grid but shifts the burden of paying for power growth singularly to those increasing the demand. It’s pretty simple. In fact, it is so simple that Ms. Mills could have resolved it by giving her Republican counterpart in neighboring New Hampshire, Gov. Kelly Ayotte,* a call. Earlier this year, Ms. Ayotte stated:

“The global race for artificial intelligence and the inability of the U.S. electricity sector to keep pace have state policymakers scratching their heads. Some respond by restricting data centers’ use of local grids; others put existing customers and taxpayers on the hook for investments to accommodate the new demand. The electricity sector is in a state of crisis.

“New Hampshire recently approved an elegant solution: Let anyone build. In August Gov. Kelly Ayotte signed HB 672, which minimizes red tape for electricity providers that don’t connect to the existing grid, thus bringing more competition, speed and innovation to the state. In the spirit of reducing bureaucracy, the bill itself fits neatly on one page.

“Off-grid electricity providers in New Hampshire will no longer be subject to public-utility regulation. This means they are free to develop projects, operate or enter into commercial agreements without going hat in hand to state bureaucrats. ‘New Hampshire welcomes entrepreneurship and innovation in energy,’ says state Rep. Michael Vose, who sponsored HB 672. Recent analysis suggests regulatory hurdles can add anywhere from one to five years to projects.

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“For more than a century, government has regulated innovation in the electricity industry with a heavy hand. But visionaries like Thomas Edison and George Westinghouse, not regulators and technocrats, made the electricity sector great. A century ago, we mistakenly traded the ability of competitive businesses to tinker and experiment for the presumed logic and efficiency of monopoly utilities. Now New Hampshire has reversed that.

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“For years, leaders of the fast-growing data-center industry have expressed frustration with the slow expansion in the electricity sector. New Hampshire deserves credit for recognizing that the status quo wasn’t cutting it. HB 672 could re-create in the Granite State the fierce competition from the early decades of the electricity sector, when the growth and innovation were extremely fast.”

Instead of banning growth in AI data centers, require them to bring their own power. There are numerous companies planning, building, and installing small modular reactors (SMR). They are scalable by simply attaching one unit to the next. They are produced in factories, delivered to the site, and can be installed concurrent with the construction of the data center. The best part is that general ratepayers are not on the hook for the construction, generation, or expansion of the electric grid.

But liberals and progressives are so besotted with the idea that government should exclusively control the generation and distribution of electrical power that they cannot—or will not—entertain a private enterprise solution.

It’s too bad. AI data centers would have provided a significant boost to Maine, which ranks thirtieth among the fifty states in economic growth. Don’t count on the other lemmings halting because of these facts—especially in Oregon, where one of the earliest successes in small modular reactors was born at Oregon State University. Someone in Oregon should tell the Democratic governor, the Democratic legislature, and the Democratic public utility commission: the government isn’t the only, or even the better, solution.

There are a lot of problems with AI, but where to build them and how to power them don’t even make the top twenty.

* We have driven through that area to see the fall colors and it is possible that, because of the density of the forests, Gov. Mills did not know she had a neighboring state; but more likely, it is because she couldn’t bear the thought of following the example of a Republican toward a free-enterprise solution.