Even speculative AI energy consumption can raise electricity bills
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The technological aspirations of high-tech firms are set to necessitate a substantial increase in power-hungry data centers. This rising demand poses a risk of higher electricity bills for everyone, even if some data centers remain unbuilt.
Utility companies in the U.S. are hastily constructing additional power plants, transmission lines, and gas pipelines to accommodate the swiftly increasing energy demands of data centers. U.S. housing costs have surged nearly 30% since 2021—outpacing inflation—according to a report by Powerlines, a nonprofit organization focused on utility regulations in the U.S. Over the past two years, electricity bills nationwide have increased by $10 billion each year.
A new report published by the Southern Environmental Law Center, a Virginia-based environmental nonprofit, highlights that it might overestimate the demand stemming from speculative data center projects. Developers frequently submit overlapping requests for electrical services across multiple regions for each project before settling on a single location.
“If the anticipated load from the data center isn’t fully realized—all indications and frankly, common sense at this point indicate that. Rate payers will ultimately bear the economic burden of unnecessary and underused gas and electricity infrastructures,” says Megan Gibson of the Southern Environmental Law Center.
Former executives from firms such as Google and Meta admit that the practice of securing redundant data center power is typical, as outlined in the report. “Tech executives are candidly voicing concerns,” Gibson mentions. New Scientist reached out to Amazon, Google, Meta, and Microsoft regarding their data center development plans, but received no additional comments.
Considering all U.S. data center projects announced between 2025 and 2030, the inflated estimates stand out even more. Collectively, they are projected to consume 90% of the global chip supply—despite the fact that the U.S. currently makes up less than 50% of global chip demand. “It’s uncommon for the entirety of the world’s chip supply to cater to this specific segment in the U.S.,” notes Marie Ng Fagan from London Economics International, a global consulting firm based in the U.S. and Canada.
To ease the burden on regular bill payers, “states should mandate utilities to forge contracts with potential data center customers that allocate this risk to the data center itself,” advises Ali Pescoe from Harvard Law School, a consultant for Powerlines.
Some state governments are already taking action. On July 9th, the Ohio Regulatory Authority issued an order that mandates large data center customers of Ohio’s largest utility company to pay at least 85% of their subscribed power load, even if their actual consumption falls short. Similarly, officials in Georgia are grappling with a rule designed to prevent data center growth from imposing burdens on other bill payers.
“The data center industry is dedicated to bearing the full costs of services for energy used, including transmission fees,” asserts Aaron Tingjum from the Data Centers Union, a Virginia-based trade association. “It’s crucial to guarantee fair electricity bills for all customers.”
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Source: www.newscientist.com
