PPL's 'positioning' about data centers - vested interests

Correction:

My letter to the PUC incorrectly stated that data centers would cause a distribution rate increase. Distribution rates increases are not related to data center growth.

PPL has the highest profit margin of any utility in the North East

According to the Energy and Policy Institute, PPL has the highest profit margin of any investor owned utility in the Northeast. 20% profit margin for a firm protected from competition. Certainly better for shareholders than it is for customers or for employees.

The 'on-paper' potential for a once in a lifetime increase in transmission, distribution, and generating revenue for humongous data centers is very compelling for PPL leadership who wants to please shareholders and get bonus pay.

Need for Reliability Improvements

Yes, it is noticeable that reliability has suffered over the past 5 years. After PPL completed a multi-year Smart Grid project in the early 2010's, reliability was quite good. Recently it has been deteriorating. Yes, increased reliability would be appreciated. But more investment should come from profits and less from customers.

Given the PPL's profit levels, more investment needs to come from profits rather than rate increases on customers. PUCs all over the country need to figure out how to balance spending and rate increases.

Data centers pay for their own system upgrades

Have written previously about issues with the AI bubble. In letters to my representatives. And in an article about the public sector bamboozling by the techlordlings: Don't be a sheeple on the AI CONundrum.

We are about to see a huge AI bubble burst. The broken bones of this bubble will be the husks of unfinished data centers and bankrupt firms. Bankrupt firms won't pay for anything, much less system upgrades.

For those of you who don't see a bubble. Please explain the capital flight from private equity funds? (It's because people know it is a bubble now and they want to deploy their capital elsewhere.)

PPL is not a huge company. A small number of large unprofitable data center ventures could easily distress the company and leave stockholders, customers and employees exposed.

They can help lower your energy bill

That is not my experience. Have seen the demand skew the cost of electricity higher. The risk is that the contracts will be meaningless when a large swathe of the AI data center businesses goes belly up. The paper savings will never become facts.

Really the only way for PPL to protect itself and its employees and customers is to get cash on the barrel head and not act as the bank for transmission and generation development.

Residential customers are protected from extra costs

This is only true, if the data centers are run profitably and can pay. There is serious doubt that AI firms can generate enough revenue to feed their voracious need for capital equipment, much less operating costs.

Really the only way for PPL to protect itself and its employees and customers is to get cash on the barrel head and not act as the bank for transmission and generation development.

Everyone plays by the same rules

It is true that PPL has to follow rules for connection requests. I sympathize with the ambiguity PPL faces in the AI data center business model and its bubble.

There are mechanisms for PPL to protect stockholders, customers, and employees.

In summary

1. PPL is the most profitable investor owned utility in the Northeast
2. More investment for reliability improvement should come from profits and less from customers
3. These huge AI data centers are an unproven business model that many consider a risky bubble. PPL needs to mitigate those risks commercially to protect stockholders employees and customers