Following my story on data center utility rebates, I got the following response from Chris Johnston, the national critical facilities chief engineer for Syska Hennessy Group, which does a lot of data center design and construction projects. Here it is:
Some thoughts about this process.
- This rebate money is not PGE’s (Pacific Gas & Electric) money – that money can only come from their shareholders and you can bet that the shareholders aren’t paying for this. The rebate money is paid out of the rate base, so Microsoft, NetAPP, (Bank of America) and similar users in the same rate class paid for the rebate.
- The next time another user in the eBay and KP (Kaiser Permanente) rate class gets a rebate, eBay and KP get to pay for it.
- Eventually, the smarter users who participate get an incentive that is paid by the not-so-smart users.
- This works in PGE’s service area now, but wouldn’t work elsewhere in the US. I talked with a major utility elsewhere and they said that their ratepayers wouldn’t stand for something like this.
- The more virtualization is done, the less a data center remains a constant load.
In particular I find it interesting that some utilities claim that they wouldn’t even be able to implement the program because their ratepayers wouldn’t put up with it. This could be quite a roadblock to data center efficiency in some areas.