AI Datacenters Are Raising Nearby Residents' Electric Bills

Yahoo

2 days ago

If you're looking for someone to blame for your ballooning energy bills, we have an increasingly familiar culprit: AI data centers.
A new analysis of one the US's largest power grids, PJM, found that a rise in customer energy rates is directly attributable to the tremendous power demands of these data facilities that undergird services like OpenAI's ChatGPT, the Washington Post reports.
Serving 67 million customers, the PJM region covers just over a dozen states, including Indiana, Maryland, Michigan, Pennsylvania, Virginia, as well as DC. Some of these states will see their energy bills surge by more than 20 percent this summer, Reuters reported; in Philadelphia, according to WaPo, the typical bill rose by about $17. And in Columbus, Ohio, prices spiked by $27.
"We are seeing every region of the country experience really significant data center load growth," Abe Silverman, a researcher of energy markets at Johns Hopkins University, told WaPo. "It's putting enormous upward pressure on prices, both for transmission and for generation."
Using Columbus as an example again, customers are paying an extra $240 per year due to the power demand of AI data centers, WaPo calculated based on figures from local utility company AEP Ohio.
One of the reasons for the soaring costs is that utility companies — which maintain the infrastructure that delivers your power, rather than generating it — are paying more for "capacity," or the total power that's made available to them. Utility companies bid for capacity at an annual auction, and last year, per WaPo, these auction prices soared by an eye-watering 833 percent. They rose again this year by another 22 percent.
According to an independent monitor's report, about three-quarters of the surge in capacity prices are because of planned or existing data centers.
"There has been a paradigm shift in the market," Joseph Bowring, the author of the independent monitor's report, told WaPo. "These data centers could overwhelm the grid. The system cannot go on this way."
Generative AI's energy appetite is so voracious that companies like Microsoft and Google are firing up entire nuclear power plants to supply their data centers. Even heavily polluting coal plants are being kept online as a stopgap until these new facilities come online. And the Trump administration wants to build even more coal plants.
It's not just the prices you should worry about, though, or the harrowing environmental toll, ranging from titanic carbon emissions to vaporizing entire lakes' worth of water. The huge spike in power demands are also putting immense stress on the aging power grids themselves, which are failing during brutal heatwaves and frigid winters.
Some states are pushing back. Ohio regulators recently ruled that data center companies must pay more for their energy to help make upgrades to the power grid, WaPo noted. But the story's different in Virginia, which has more data centers than any other state — 596, according to the website Data Center Map, with the overwhelming majority up North near DC. To keep its numero uno status, Virginia is offering huge tax breaks to data center companies — meaning they get a free ride, and the state's taxpayers, if the latest trends keep up, get bigger energy bills.
"The Big Tech companies suck up the electricity, and we end up paying higher prices," an Ohio resident told WaPo. "I'm not comfortable with average customers subsidizing billion-dollar companies."
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