WattThe / Data center / Power cost / TCO
The power bill is the largest operating cost of an AI facility. Model it from rack density, rate, and PUE — then project it across the asset life with escalation.
The core equation is short: rack kW × rack count × PUE × 8,760 hours × rate. It compounds fast. Twenty racks at 60 kW with a 1.3 PUE draw 1.56 MW from the grid — about 13.7 GWh a year — so every cent per kWh in the rate is worth roughly $137,000 annually. That is why AI capacity concentrates where industrial power is cheap and abundant, and why a facility's PUE and its negotiated rate matter more to lifetime economics than most capex line items.
Over a 5–15 year horizon, escalation dominates. Utility industrial rates have historically risen 2–4% a year, and constrained markets are moving faster; modeling a flat rate flatters the pro forma. Large loads can push back — through fixed-price PPAs, hedges, time-of-use scheduling of deferrable training jobs, or co-located generation — but every one of those levers gets negotiated against the baseline this calculator produces.
Power is typically 40–60% of an AI data center's total cost of ownership once the facility is running, ahead of staffing and maintenance. If you are underwriting a site, run the sensitivity: rate ±2¢ and PUE ±0.15 usually swing the model more than anything else on the sheet.
A constant 1 MW IT load at a 1.3 PUE draws 1.3 MW from the grid — about 11.4 GWh per year (1,300 kW × 8,760 hours). At 7.5¢/kWh that is roughly $850,000 annually.
Your utility bills you for total facility consumption, not just server load. Multiplying IT load by PUE captures cooling and electrical losses, converting rack power into actual metered grid draw.
For an operating facility, power commonly represents 40–60% of total cost of ownership over the asset life — which is why site selection is driven more by power price and availability than by land or construction cost.
Estimates are for planning and education, not engineering design or financial advice. Verify rates with your utility and confirm electrical work with a licensed engineer or electrician.
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