Big tech’s data center boom is said to spark fears about power bills

At last year’s annual meeting of state utility regulators in Anaheim, California, major tech players like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) took center stage, reflecting their growing influence in the U.S. power sector. Once limited to buying renewable energy to offset emissions, these companies now operate energy subsidiaries, sell electricity and rival traditional utilities in scale.

The surge in artificial intelligence projects has driven a sharp increase in electricity demand, with data centers already consuming over 4% of U.S. power in 2023, a figure federal analysts expect could triple within three years. Utilities warn the billions needed for new power plants and transmission lines may raise rates for households and small businesses unless tech companies absorb more of the costs, the New York Times reported on Thursday.

Tensions have flared in states like Ohio, where regulators recently sided with utilities over proposals from tech firms seeking lower upfront costs for electricity infrastructure. Similar debates are emerging in Virginia and elsewhere, as officials weigh creating special rate categories for data centers to prevent ordinary consumers from subsidizing their growth.

Industry leaders say they’re willing to pay their way, but disputes over how to calculate those costs persist. Meanwhile, the rapid pace of data center expansion and the possibility that some projects could be delayed or canceled have left utilities and regulators struggling to balance economic development with protecting ratepayers from higher bills.