As electric bills rise in the United States, states are increasingly examining whether data centers are contributing to the surge in energy costs. Critics argue that the energy demands of tech giants like Microsoft, Google, Amazon, and Meta are leading to inflated electricity prices, with some residential and commercial users bearing the brunt. Analysts suggest that current specialized rates for data, centers in 16 states are insufficient to cover the expenses of new natural gas power plants, potentially making other ratepayers subsidize these operations. The growing scrutiny highlights the need for reforms to ensure that data centers contribute fairly to energy costs instead of passing the burden onto everyday consumers.
The Data Center Coalition, which represents Big Tech firms and data center developers, has said its members are committed to paying their fair share. However, growing evidence suggests that the electricity bills of some Americans are rising to subsidize the massive energy needs of Big Tech as the United States competes in a race against China for artificial intelligence superiority. Data and analytics firm Wood Mackenzie published a report in recent weeks that indicated 20 proposed or effective specialized rates for data centers in 16 states are not nearly enough to cover the cost of a new natural gas power plant. In other words, unless utilities negotiate higher specialized rates, other ratepayer classes — residential, commercial, and industrial — are likely paying for data center power needs.
Meanwhile, Monitoring Analytics, the independent market watchdog for the mid-Atlantic grid, produced research in June showing that 70% — or $9.3 billion — of last year’s increased electricity cost was the result of data center demand. Last year, five governors led by Pennsylvania’s Josh Shapiro began pushing back against power prices set by the mid-Atlantic grid operator, PJM Interconnection, after that amount spiked nearly sevenfold. They warned of customers