Data Center Operators Double As Energy Brokers 35
mattOzan writes "When data centers first opened in the 1990s, the tenants paid for space to plug in their servers with a proviso that electricity would be available. As computing power has soared, so has the need for electricity, turning that relationship on its head: electrical capacity is often the central element of lease agreements, and space is secondary. While lease arrangements are often written in the language of real estate, they are essentially power deals. 'Since tenants on average tend to contract for around twice the power they need, Mr. Tazbaz said, those data centers can effectively charge double what they are paying for that power. Generally, the sale or resale of power is subject to a welter of regulations and price controls. For regulated utilities, the average "return on equity" — a rough parallel to profit margins — was 9.25 percent to 9.7 percent for 2010 through 2012.'"
Contracts (Score:4, Insightful)
You mean, exclusive contracts can screw you over? WHO KNEW? See also: Every antitrust investigation. Ever.