Monday Edition · Mon 19 Oct 2026
Who Pays for the Load
From Texas to Nova Scotia to the streets of Paris, fast ambitions are colliding with slow infrastructure and stretched public budgets. The pattern is the same each time: the bill is quietly pushed onto existing ratepayers and taxpayers, and this weekend in France showed what happens when people notice.
The Zevin Intelligence Journal
Published
A week of the same question
This week's news contains one question asked in several languages. In Austin, Texas regulators face a Monday deadline to report on a freeze on data-centre permits ordered by the governor. In Washington, the federal energy regulator has told states that they, not the grid operator, must decide which large power users are cut off first in a shortage. In Nova Scotia, a data centre is due to switch on before the wind farms meant to power it. And in France, 550,000 people marched against a budget built on €54 billion of savings. The question in every case is who pays.
The physics of ambition
Ambition moves faster than infrastructure. A company can decide to build a data centre in months. A transmission line takes years to plan, permit and build. A power plant takes longer. Water rights take longer still. When demand arrives before supply, someone has to bridge the gap, either by paying for new capacity quickly or by accepting higher prices and less reliability on the capacity that exists. The bridge is rarely paid for by the party that created the demand.
Texas says pay your own way
Texas Governor Greg Abbott has put the principle bluntly. "Data centers must pay their own way, protect our grid and water," he said when he ordered state agencies to stop issuing permits to data-centre projects until audits of their power and water use are complete. The state's grid operator and water board are surveying more than 400 data centres. The freeze is crude, and it hurts projects that planned to bring their own power. But it starts from the right question: before we approve the load, who will pay for the wires, the plants and the water?
Washington hands the question back
The federal answer has been to hand the question to the states. On 9 October, the Federal Energy Regulatory Commission rejected most of a plan by the eastern grid operator PJM to curtail new large loads during emergencies, saying it intruded on state authority. That may be legally correct. It also means that dozens of state commissions will now write dozens of different rules on who gets cut off first. Large companies will shop for the most lenient. Households, who cannot move their homes across state lines, will live with whatever their state decides.
The Nova Scotia lesson
Nova Scotia shows the timing problem in its purest form. When a data centre comes online before the renewable generation built to serve it, its power must come from somewhere in the meantime. That usually means the existing grid, with its existing customers. The promise of clean, self-supplied power is real, but it is a promise about the future. The cost in the present falls on the system everyone already pays for. Contracts that spell out who covers that gap should be a condition of approval, not an afterthought.
The hidden subsidy
When the costs of new demand are spread across all customers, the result is a hidden subsidy. A household's electricity bill includes the cost of grid upgrades, reserve capacity and emergency measures. If those costs rise because of a handful of very large new customers, the household pays for infrastructure built mainly for someone else. The amount on any single bill may be small. Across millions of bills, it becomes a transfer from the many to the few, decided in technical proceedings few people follow.
France is what noticing looks like
France offers a different version of the same story. A minority government needs €54 billion in savings to bring down a deficit, with public debt at €3.6 trillion, or 119% of GDP. The costs of past borrowing, higher interest rates and an energy shock from the Gulf have to be paid by someone. The budget asks students, teachers, public servants and households to absorb much of it through spending restraint. On Saturday, hundreds of thousands made clear they had noticed. The violence by a minority was inexcusable. The anger of the majority was not irrational.
The common pattern
The cases differ in scale and politics, but the pattern is the same. A decision is made at speed, whether to build, to borrow or to grow. The infrastructure and public finances that support it move slowly. The gap is filled by spreading costs across people who were not part of the decision. For a while, nobody notices. Then the bill arrives, in a higher power rate, a closed school or a cut service, and trust in the institutions that made the decision erodes.
| Place | Fast ambition | Slow constraint | Who carries the gap |
|---|---|---|---|
| Texas | 400+ data centres | Grid, water, permits | Ratepayers unless audits change rules |
| PJM states | Large new loads | Emergency capacity | Set state by state after FERC ruling |
| Nova Scotia | Data centre online first | Wind farms later | Existing grid customers in the interim |
| France | Deficit reduction | Public services, debt | Households and public-service users |
The case for growth
The counterargument deserves a fair hearing. Data centres bring investment, construction jobs and tax revenue. The digital economy depends on them. Some states will welcome the projects that Texas delays, and the jobs will go there. Governments that refuse to borrow or spend can fall behind in defence, education and technology. Demanding that every new project pay every cost upfront could slow useful growth. The point is not to stop building. It is to be honest about who carries the cost while the building happens.
Make the beneficiary pay first
The fairest principle is simple: those who benefit most should pay first. For data centres, that means connection agreements that require large users to fund the grid upgrades they trigger, to bring or contract new capacity before they connect, and to accept interruption first in a shortage. For governments, it means budgets that spread restraint in proportion to ability to pay rather than loading it onto public services that the less well-off depend on most.
Transparency is the precondition
None of this works without transparency. The Texas audit keeps individual companies' responses confidential. That may protect commercial secrets, but it also prevents the public from seeing how much power and water each project will use. FERC's approval of a registry for large loads of 50 megawatts or more is a step in the right direction. State regulators should publish what each large project will draw, what upgrades it triggers and who pays for them. People accept costs more readily when they can see them.
Prices that tell the truth
Pricing is the other tool. If the cost of serving a large new load is reflected in the price that load pays, the incentive to build where capacity exists, or to bring new capacity, follows naturally. If the cost is averaged across everyone, the incentive disappears. Regulators have the tools to design tariffs that reflect the true cost of new demand. They have often chosen not to use them, because averaging is easier and less visible.
The risk of doing nothing
The risk of ignoring the question is not only financial. It is political. Every time a bill arrives that people did not agree to, trust in institutions weakens. France's protests began with students angry about crumbling schools and grew into a broad revolt against a sense that ordinary people pay while decisions are made elsewhere. A grid that raises household bills to serve data centres, without explanation, risks a similar reaction. The populist response to that anger rarely produces better policy.
What good policy would look like
Good policy would combine four elements. Large new loads would fund the infrastructure they require. Their power and water use would be published. Tariffs would reflect the real cost of serving them. And public budgets under strain would be designed so that the people least able to bear cuts are not the first to absorb them. None of these is radical. Each requires officials to make costs visible that are now hidden in averages and technical rulings.
The editorial line
This newspaper supports growth, including the AI buildout and the public investment Europe needs. We also believe that growth built on hidden transfers is fragile. The data-centre boom will be more durable if communities see that it pays its own way. European budgets will be more durable if citizens see that restraint is shared fairly. The protests in France are a warning that the patience of those asked to pay without being asked is not unlimited.
What to watch
In the coming weeks, three tests will show whether this lesson is learned. The first is what Texas does when its audit concludes in December, and whether its rules make large users pay for the capacity they need. The second is how state commissions in the PJM region set curtailment priorities after FERC's ruling. The third is whether France's government reshapes its budget to share the burden more evenly after Tuesday's vote. In each case, the question will be the same: who pays for the load?
Sources
- Houston Public Media, Gov. Abbott orders TCEQ to pause environmental permits for data centers, 21 Sep 2026 · houstonpublicmedia.org
- Utility Dive, FERC rejects most of PJM's large load interconnection plan, Oct 2026 · utilitydive.com
- CNBC, France hit by worst unrest in years as Macron condemns violence, 19 Oct 2026 · cnbc.com
- Data Center Dynamics, FERC approves PJM's request to create data center database · datacenterdynamics.com
Related
- Texas Regulators Face Monday Deadline to Report on Abbott's Data-Centre Permit Freeze as States Inherit the Fight Over Who Pays for the Load
- France Counts 550,000 Marchers and Nearly 2,400 Arrests as the Budget Faces Its First Vote on Tuesday
- OpenAI Discloses Four Cases of Its Models Breaking Through Test Boundaries, Including Forged Tokens and a Borrowed Wallet