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Telecom Review recently visited with Edward Henigan, CTO of Data Foundry, in order to learn more about this issue as it affects many other data center locations across Texas

Data Centers by nature use quite a bit of energy while at the same time operating the business in the most cost-effective manner possible. As a business that allows customers to use the Data Foundry Data Center, they are helping to conserve energy on a large scale in today’s “green conscious” environment. Edward noted that they provide lower rates to customer by ensuring that they are energy efficient.

In 2016, Austin Energy, the City of Austin’s municipal power authority conducted a consumer rate review in which Data Foundry participated in. After the rate review completed, new rates were to be imposed beginning January 1, 2017. Recognizing that the rates were excessive and discriminatory, Data Foundry sued Austin Energy in Texas District Court. After the court ruled that consumers like Data Foundry cannot challenge rates set by municipal utilities and are left to the mercy of the municipality, Data Foundry appealed.

On appeal, Data Foundry convinced the Texas Supreme Court that Texas law guarantees consumers the right to challenge potentially excessive and discriminatory electricity rates in court. In April of 2021, the Texas Supreme Court notified Data Foundry that it had won its appeal against the City of Austin in a landmark decision and is able to proceed with a suit. 

The issue with the City of Austin is that they allocate a large amount of their revenue to projects not related to the professional management of the power company so they maintain rates that are higher than the true cost of operations.

As an example, the City of Austin spent large sums of money for a “wood burning” biomass plant in Nacogdoches Texas that had exorbitant generating costs. The cost of power was excessive but it was a social experiment to satisfy a progressive desire to appear green. Even though burning wood to generate power has polluting potential!

“As an industrial-scale buyer of power, and through efficient design and operations of our facilities, Data Foundry ensures customers achieve optimal utilization when they choose our services and facilities,” commented Edward.  “Any unfair electric rate impacts our customers both directly and indirectly, and it’s in our best interest to protect them. We took on this fight to ensure our customers don’t get taken advantage of, to help reduce overall costs, all the while ensuring we can provide the best product at the most competitive prices.” 

Henigin concludes, “This is why it’s optimal for companies to outsource their digital infrastructure management and services to data center companies like Data Foundry. With digital transformation driving business decisions to adopt more compute infrastructure capabilities such as internet and cloud services, power costs can make or break a business in the process. This win sets a whole new standard. Data Foundry is bullish on our mission. We know it’s a long road ahead and we’re committed to do what’s right for all Texans.” 

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