Rising Energy Costs From Data Centers: Who Pays the Price?

Imagine your new neighbor just moved in unannounced. They seem nice enough, but—oh boy—do they devour power. We’re talking teenagers at an all-you-can-eat buffet kind of consumption. That’s basically what a data center is doing to your local electricity grid.

And with AI data centers popping up across the U.S. like frogs after a rainstorm, America’s power bills are about to feel the squeeze. The big question: who’s paying the tab for all this electricity demand? Spoiler alert—it might be you.

Here’s what you need to know to prepare for America’s AI-fueled data center building spree and how you can still save money on your monthly energy bills.

The Explosion of Data Centers (and Why AI Is Driving It)

Data centers aren’t new, but their growth has gone from “steady” to “rocket-fueled” in the last few years. Why? Because everything from your Netflix binge to your Alexa request—and especially artificial intelligence-backed tasks—is powered in giant warehouses stuffed with servers.

• By 2030, data centers could account for 9% of all U.S. electricity demand, up from 4% today.
• AI is the biggest driver, since training and running models require massive computing power.

As one Maryland advocate put it, “We’re facing an unprecedented surge in demand” thanks to cloud computing and AI expansion. In short, the digital world we love comes with a real-world electric bill.

How Much Energy Does an AI Data Center Use?

If you think your air conditioner is a power hog, wait until you meet an AI server farm.

• A single AI data center can consume as much electricity as 80,000 U.S. households.
• MIT found that training just one generative AI model can use the same amount of energy as 100 average U.S. homes over a year.
• In fact, an AI search on ChatGPT uses over 10 times the power of the same search on Google.

Add in cooling (servers generate loads of heat), 24/7 operation, and future infrastructure growth, and suddenly your friendly AI chatbot looks more like a ravenous Pac-Man chomping through the electric grid.

Virginia: Ground Zero for Data Center Energy Demand

Virginia, particularly Northern Virginia and “Data Center Alley” in Ashburn, boasts the world’s largest concentration of data centers, with over 100 campuses and 275 individual facilities. This makes the state a crucial hub for US internet and cloud infrastructure.

• Data centers already use more electricity in Virginia than all the state’s residential customers combined.
• U.S. utilities may need to increase annual energy generation by 7-26% above 2023 levels by 2028 to meet projected demand, a consulting firm reported. This surge is significantly greater than the largest previous five-year increase of 5% from 2005 to 2023.

Notable Metropolitan Areas Experiencing Rapid Data Center Growth

• Phoenix, Arizona: Over 100 data centers with around 1,380 MW power capacity. Offers low-cost power and high reliability, attracting providers like CyrusOne and phoenixNAP. Became the second-largest hub by capacity, surpassing Silicon Valley.
• Silicon Valley, California: A historic leader with strong fiber networks and major cloud presence. Although expensive in terms of land costs, it remains key for tech enterprises and hyperscale growth.
• Dallas-Fort Worth, Texas: Large and rapidly growing, with a projected 4,396 MW capacity, enough to power millions of homes. Stargate, a joint venture between OpenAI, SoftBank, and Oracle, announced plans in January 2025 to invest up to $500 billion in AI-related infrastructure. This significant development highlights a continuing trend, with the venture noting affordability in land and strong business infrastructure as key factors supporting colocation.
• Atlanta, Georgia: Growing fast with an expected 3,125 MW capacity driven by massive investments like Microsoft’s $1.8 billion data center project. Acts as a critical digital ecosystem player in the Southeast.

This is not just a local issue. What happens in Virginia often ripples through PJM Interconnection, the regional transmission grid that serves 65 million people in 13 states and D.C. If PJM or other transmission grids struggle, everyone downstream feels the shock.

The Strain on the U.S. Grid

America’s grid wasn’t built for TikTok, ChatGPT, and 24/7 AI assistants. The U.S. is already facing a potential electricity shortage in the coming years. Currently, most data centers draw 500 mW or less from the grid, but that’s nothing compared to what’s on the way. Already being planned, 50,000-acre data center campuses are projected to consume 5 GW of power. This is equivalent to the electricity required by five million residential homes and surpasses the capacity of the largest operational nuclear or gas plants currently in the United States.

• According to BloombergNEF, U.S. power generation needs to grow 5–6% annually to meet AI demand—an unprecedented rate not seen since the 1950s.
• PJM’s most recent capacity auction failed to fully account for this surge, raising fears that residents could see rising energy costs as utilities scramble to keep the lights on.

Think of the grid like a three-lane highway. Now imagine Amazon, Microsoft, and Google all driving hundreds of convoys of semis down it at rush hour. Somebody’s going to get stuck in traffic. At a certain point, someone will have to pay for increasing grid production capacity and infrastructure.

Who’s Picking Up the Check?

Here’s the rub: while Big Tech builds the data centers, it’s often regular people—homeowners, renters, small businesses—who end up footing the bill for new infrastructure.

The rapid growth of AI data centers is driving a sharp increase in electricity demand, prompting utility companies to invest heavily in new power infrastructure. These costs are commonly recovered through higher electricity rates spread across all consumers, meaning homeowners and renters share the financial burden even if they don’t directly use these services.

Additionally, AI data centers create regional spikes in energy use, straining local grids and further pushing up electricity prices. While tech companies pay for their own consumption, the infrastructure upgrades needed to support their growth often fall on everyday ratepayers, leading to rising monthly utility bills for residential customers.

• Utility revenue requirements to serve growing data center electricity demand could increase customer bills by 1% annually through 2032.
• Maryland advocates argue that “residential customers should not subsidize Big Data,” but the current PJM market setup leaves that risk wide open.

Translation: while you haven’t changed how much you use your toaster or TV, your bill could go up anyway—just to keep AI servers humming. This situation highlights growing concerns about energy affordability and fairness in the face of expanding AI technology.

What States and the Federal Government Are Doing

The debate is heating up faster than a server rack in July. A few solutions are on the table:

• Special tariffs: Some states are considering charging data centers higher rates to reflect their outsized impact. Ohio has created a new customer rate class specifically for data centers to ensure they cover more grid upgrade expenses instead of spreading costs broadly.
• Incentives for renewables: Pushing AI companies to power facilities with clean energy, rather than leaning on fossil fuels.
• Grid upgrades: Federal regulators are warning that massive investments in transmission lines and generation are needed now to avoid blackouts later. Utilities and regulators are negotiating with tech companies to balance energy demand growth and fair cost allocation while avoiding burdening everyday consumers.
• The federal government is accelerating permitting for data center infrastructure to support AI growth while aiming to maintain grid reliability and balance competing interests.

But as of today, there’s no nationwide rule ensuring AI energy demand doesn’t shift costs to you. State and local representatives say stronger policies are needed so Big Data pays its fair share.

What This Means for Your Wallet

So, are energy costs rising because of AI? In short, yes, and the trend is just beginning. Rising energy costs are expected across multiple states, especially those hosting new data centers.

• By some estimates, households in high-growth data center regions could see electricity costs rising by 10–15% in the next decade if utilities pass costs along.
• Even if you live outside Virginia, Texas, or Arizona (all hotbeds for AI facilities), interconnected grids mean the rising cost of electricity can ripple nationwide.

Think of it like sharing a pizza with a friend who eats half the pie before you even sit down. Sure, you technically “shared,” but your slice just got smaller and more expensive per bite.

How to Protect Yourself From Rising Energy Costs

Here’s the good news: while you can’t stop Amazon from building another server farm, you can shop smarter for your own electricity.

ElectricityRates.com makes it easy. Just enter your ZIP Code in our search bar, and you’ll see a side-by-side comparison of the best electricity providers in your area. You can:

• Lock in fixed-rate plans to shield yourself from sudden spikes.
• Compare 100% renewable energy options for a greener choice.
• Find deals that could save hundreds of dollars a year compared to your utility’s default rate. Simply choose a new provider, and your current company will handle the entire transition.

Because if Big Data is driving up energy demand, the least you can do is make sure your own bill doesn’t become collateral damage.

In conclusion data centers are here to stay. They power the apps, tools, and AI we all use every day—but they also guzzle electricity like it’s happy hour. With demand set to double in the next five years, the fight over who pays for rising energy costs is just beginning.

Until policymakers ensure that tech giants carry their weight, the best move for homeowners and renters is simple: shop, compare, and save on your own electricity.