The power grid isn't nearly as affected by latency as data connections. Several years ago I worked at a company that outsourced its IT midway through my time there. The latency was so terrible that it took 45 minutes just to check one's email at the start of every day, a task which should have taken 5.

I don't understand. Can you go into detail?

Centralized operators have much better economies of scale and are able to specialize in fields that are non-core to other industries, like security.

That works because the power grid and power generators are heavily regulated by the government. Is AWS ready to classify itself as a utility and be under government regulation?

That seems like an unreasonable jump to make. Building power plants doesn't work ONLY because of a regulated energy market, though I'm sure it helps. What if the parent commenter hadn't used a utility as an example? If the example of "economies of scale" were ethanol fuel production, would you ask if AWS was ready to classify itself as a corn field?

Power only became regulated because it became so central to a functioning society.

In a couple more decades cloud computing will be almost ubiquitous and yes, it will become more regulated.

The AWS GovCloud region is already a move in this direction. Also the private cloud they are building for the CIA shows that AWS is willing to jump through various hoops for $$.