According to a Washington Post report, parts of America "are facing higher electric bills" as Amazon, Google, and other companies build new data centres, sometimes for their AI projects.
The facilities' extraordinary demand for electricity to power and excellent computers can drive the price local utilities pay for energy, requiring significant improvements to electric grid transmission systems.
However, rather than charging hugely wealthy IT companies, utilities have decided to hike consumer prices. According to utility planning documents and energy industry analysts, costs have already begun rising for customers or are expected to rise shortly.
Some regulators risk being dubbed communists for wanting to step in and force the tech companies to not pay their fair share. In Oregon, electric utilities are warning regulators that consumers need protection from rising rates caused by data centres.
From Virginia to Ohio and South Carolina, companies are debating their responsibility for the increases and attempting to deflect customer anger. In the Mid-Atlantic region, the regional power grid's energy costs have shot up dramatically, with data centres cited as the root cause of expected rate increases of up to 20 per cent in 2025.
The tech firms and several power companies serving them vehemently deny they are burdening others. They argue that higher utility bills are paying for overdue improvements to the power grid that benefit all customers.
In some cases, they have committed to covering additional costs in response to criticism from consumer and business advocates. However, regulators and even some utilities are growing sceptical.
A striking example of the fallout on consumers is evident in the Mid-Atlantic regional power grid, PJM Interconnection, which serves 13 states and D.C. The recent auction to secure power for the grid during periods of extreme weather and high demand resulted in an 800 percent jump in the price that the grid's member utilities had to pay.
According to public records, millions will feel the impact by the spring. Power bills will increase by as much as 20 per cent for customers of a dozen utilities in Maryland, Ohio, Pennsylvania, New Jersey, and West Virginia, regulatory filings show. This includes households in the Baltimore area, where annual bills will increase by an average of $192, said Maryland People's Counsel David Lapp. The next auction, in 2025, could be more painful, Lapp said, leaving customers potentially "looking at increases of as much as $40 to $50 a month."
Advocates point to another source of cost-shifting onto consumers: discounted rates that power companies and local government officials use to entice tech companies to build data centres. Google cut a deal with Dominion Energy, approved by regulators, to pay six cents per kilowatt hour for its power. This is less than half of what residential customers pay and substantially less than what businesses pay.
The article noted that in Pennsylvania, "Amazon's novel plan to fuel a data centre from a reactor at the nearby Susquehanna nuclear plant is now in jeopardy after regulators blocked it on Friday. They cited potential impact on consumers as among their concerns. The plan threatens to leave other ratepayers stuck with a bill of $50 million to $140 million, according to testimony from [power utility] AEP and utility conglomerate Exelon."
Meanwhile, one Virginia retiree complained about a proposed $54 million transmission line and substation for an Amazon data centre. "They are already making money hand over fist, and now they want us to pay for this?"
