Dark by Design
Signals Brief #7 (2026.02.23) | Shedding Light on Transparency and Ratepayer Protections
In the late 1990s, telecommunications companies laid enough fiber optic cable to circle the Earth more than a thousand times. They were racing to meet a future they could see clearly: the internet was coming, bandwidth would be everything, and whoever owned the pipes would own the era.
They were right about the future. They were wrong about the timeline.
By 2002, only 2.7% of that fiber was lit. The rest sat dark underground — paid for, installed, and waiting for demand that arrived years later than the projections said it would. Hundreds of billions of dollars in capital evaporated. Pension funds collapsed. Workers lost jobs. And the infrastructure itself? It eventually became the backbone of the modern internet — but the communities that hosted it, the ratepayers who financed it, and the workers who built it absorbed the cost of the gap between vision and reality.
I am thinking about the lessons learned from that era of fiber infrastructure when I look at what’s being built today for AI.
The numbers are staggering in the way that infrastructure numbers always are — large enough to feel abstract, specific enough to suggest something real is happening. Sightline Climate is currently tracking 190 gigawatts of data center capacity across 777 large-scale projects announced since 2024. At least 16 gigawatts are slated to come online this year alone — but only 5 gigawatts are currently under construction. In the United States alone, $200 billion in digital infrastructure changed hands in 2025.
The stated rationale is AI. Every organization including banks, logistics companies, hospital systems, and government agencies is being told it needs AI infrastructure — and the hyperscalers are building capacity to serve that demand before it fully arrives. That’s how infrastructure investment works: you build ahead of the curve.
The question I keep returning to is: how far ahead? 5 years? 10 years? Or longer? How much is enough and how might we design the system to ensure it serves as a public good?
When the utility AEP Ohio required data center developers to make real financial commitments before locking in grid capacity, projected demand dropped from 30 gigawatts to 13 — more than half simply disappeared. In Georgia, regulators approved nearly 10,000 megawatts of new capacity for data centers in December 2025. And a report commissioned by the Southern Environmental Law Center found that it had a 1-in-500 (or 0.2%) chance of actually being needed. Meanwhile, Deloitte released its own survey of more than 3,000 enterprise leaders and found that only 20% of organizations are currently achieving AI revenue growth, even as 74% say they hope to. The gap between aspiration and monetization is wide — and it arrives years before the infrastructure being built to serve that demand ever gets used.
The demand is real. The timeline may not be.
Here is where the telecom story rhymes with the present — and where it diverges in ways that matter.
In the 1990s, fiber was financed mostly by debt. When demand didn’t arrive on schedule, companies went bankrupt. The loss was painful, but it was concentrated: investors and creditors absorbed most of it.
Today’s buildout is financed differently. Private equity firms — Blackstone, KKR, Brookfield, DigitalBridge, among others — have deployed over $108 billion into data center acquisitions in the last four years. These funds typically operate on 5 to 7 year investment horizons. They build, fill, and sell. The data centers themselves have useful lives of 15 to 20 years. The grid infrastructure built to serve them — substations, transmission lines — lasts 30 to 40 years or more.
When the fund exits, the infrastructure doesn’t leave with it.
What stays behind gets absorbed into the utility rate base — the mechanism by which utilities recover infrastructure costs from all customers, regardless of who benefited from building it. The Union of Concerned Scientists documented $4.3 billion in data center grid connection costs passed to ratepayers in 2024 across just seven states. Residential bills in Virginia are up $20 a month. In Georgia, up 41% over four years. In Oregon, utilities recorded more than 53,000 household disconnections in a single year as bills climbed.
This is what the gap looks like from the ground: not a crash, but a quiet transfer — costs that move from capital into the rate base, from the balance sheet into the monthly bill.
There is a layer that makes this harder to see, and harder to fight.
Many of the communities where data centers are being sited don’t know who is building them, what they will be used for, or how long they will operate. In Virginia and Wisconsin, communities signed nondisclosure agreements with developers whose identities were concealed behind shell company names — in some cases for over a year.
NDAs have legitimate uses in commercial real estate. But when they are broad enough to prevent elected officials from sharing basic information with their constituents, they become something else: a design feature, not a side effect.
Community benefit agreements — the mechanism advocates propose to ensure data centers contribute to the communities they enter — are nearly impossible to negotiate when communities don’t know who they’re negotiating with, or what they’re negotiating over. You cannot bargain for your share of something you cannot see.
On Tuesday night, at the State of the Union, President Trump announced a Ratepayer Protection Pledge.
The announcement is a significant political acknowledgment of what dark infrastructure costs: not in the form of a collapse, but a steady draw on the grid — and on the people connected to it. It is the economic concern all politicians want to be seen addressing directly as the midterms approach. For the first time at a national address, communities from Virginia to Oregon heard what they’ve been saying for years: that AI data centers are driving up electricity bills, and that someone other than ordinary ratepayers should pay.
The announcement matters as a signal. What it isn’t yet is an enforcement mechanism. Tech leaders are being invited to sign a voluntary pledge — one that critics say sidesteps the regulatory proceedings where ratepayer costs are actually set.
No companies were named in the speech. No binding terms were disclosed. No enforcement framework was established. Consumer advocates called it a handshake deal — politically visible, legally unenforceable. Anthropic and Microsoft had already made voluntary commitments. Anthropic pledged to cover grid upgrade costs for its owned facilities, Microsoft committing to higher self-funded rates. These pledges carry significant carve-outs, and yet neither addresses leased capacity, which accounts for the majority of industry compute.
In the first half of 2025, utilities requested more than $29 billion in rate increases — double the prior year — driven largely by data center infrastructure costs.
I am not trying to predict how this ends. The fiber story ended better than most people remember — the infrastructure got used, and the internet it enabled genuinely transformed the world. The question wasn’t whether the vision was right. It was who paid the cost of the gap between vision and arrival — and in that story, it was workers, pension holders, and the communities that had built their economies around the promise of connectivity.
That question is being answered right now, in utility rate cases and capacity auctions and NDA clauses that most people will never read. The capital has an exit strategy. The grid infrastructure doesn’t. And communities are already absorbing the cost.
What I am watching: whether the governance frameworks now emerging — 300+ bills in 30 states in the first six weeks of 2026, binding statutory protections in Virginia and Oregon, ratepayer protection legislation with bipartisan sponsorship even in deep-red Oklahoma — can move fast enough to match the pace of the buildout. A presidential pledge is a start.
We are seeing more and more voluntary frameworks with built-in incentives–including in Pennsylvania—but without enforcement mechanisms, they are falling short of what communities actually need. Binding policy is what protects ratepayers when the next fund exits and the next facility goes dark.
These are the mechanisms in play. Presidential pledges create political pressure. Utility commission orders create legal obligations. The distance between those two things is where the transparency goes dark.