Data centers face double-digit increases in utility costs

Computerworld - Utility costs are shooting up this year, and that's potentially bad news for data center operators, who sometimes pay for electricity by the megawatt. Users in the Northeast, in particular, are seeing big increases. In Connecticut, for instance, rates for commercial and residential customers rose this month by more than 17% -- and are slated to go up again by another 22.4% in April.

Electricity costs have always been high in the Northeast because of that region's dependence on fuel supplies from elsewhere. But Connecticut officials believe that state's rates "are right in line" with increases elsewhere in New England, said Beryl Lyons, a spokeswoman for the Connecticut Department of Public Utility Control in New Britain.

"Undoubtedly, I don't care where you go, the price of generating electricity has gone through the roof because for the most part it uses fossil fuels," said Lyons. "There wasn't anything we could do on this one."

Electricity costs may prompt some IT shops to become more aggressive about energy conservation and start adopting systems that use low-power chips and variable-speed motors. But it's unlikely to lead to a relocation of data centers to regions where power is less expensive, according to three data center managers.

Baltimore-based Thomson Prometric, a testing and assessment services firm that is part of The Thomson Corp., is in the process of relocating its data center. But the new one will be located just three miles from the existing facility because the company didn't want to lose its employees, said Bob Williams, who runs the data centers.

The monthly electric bill to run Thomson's 1,000-server data center is about $15,000. And while Williams is concerned about rate increases that could follow state deregulation efforts and the recent purchase of the main Baltimore utility by a larger provider, Juno, Fla.-based Constellation Energy Group Inc., he said other issues, such as reliability, are more important.

"The [electricity] cost is one thing," said Williams, "but an outage is devastating and will cost me a lot more than the increase in energy costs."

Electricity costs vary widely, depending on fuel source, with states that are dependent on natural gas paying the most for electricity, according to Robert Burns, a senior research specialist at the National Regulatory Research Institute at Ohio State University in Columbus. Nationally, electric costs are up about 8% this year. The states seeing the smallest increases are those in the northern Midwest, where a fair amount of the electricity is generated by coal-fired plants.

Bill Hunter, data center manager for