States are taking action as electric bills rise amid data-center boom. ‘There’s a massive outcry’

Economy·EnergyStates are taking action as electric bills rise amid data-center boom. ‘There’s a massive outcry’By Marc LevyBy The Associated PressBy Marc LevyBy The Associated Press Amazon Web Services data center in Boardman, Ore

Jenny Kane—AP Photo Amid rising electric bills, states are under pressure to insulate regular household and ratepayers from the costs of ing Big ’s energy-hungrydata centers

It’s not that any state has a solution and the actual effect of data centers on electricity bills is difficult to pin down

Some critics question whether states have the spine to take a hard line against behemoths Microsoft, Google, Amazon and Meta

But more than a dozen states have begun taking steps as data centers drive a rapid build-out of power plants and transmission lines

That has meant pressuring the nation’s biggest power grid operator to clamp down on price increases, studying the effect of data centers on electricity bills or pushing data center owners to pay a larger of local transmission costs

Rising power bills are “something legislators have been hearing a lot

It’s something we’ve been hearing a lot

More people are speaking out at the public utility commission in the past year than I’ve ever seen before,” said Charlotte Shuff of the Oregon Citizens’ Utility Board, a consumer advocacy group. “There’s a massive outcry.” Not the typical electric customer Some data centers could require more electricity than cities the size of Pittsburgh, Cleveland or New Orleans, and make huge factories look tiny by comparison

That’s pushing policymakers to rethink a system that, historically, has spread transmission costs among classes of consumers that are portional to electricity use. “A lot of this infrastructure, billions of dollars of it, is being built just for a few customers and a few facilities and these happen to be the wealthiest companies in the world,” said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University. “I think some of the fundamental assumptions behind all this just kind of breaks down.” A fix, Peskoe said, is a “can of worms” that pits ratepayer classes against one another

Some officials downplay the role of data centers in pushing up electric bills

Tricia Pridemore, who sits on Georgia’s Public Service Commission and is president of the National Association of Regulatory Utility Commissioners, pointed to an already tightened electricity supply and increasing costs for power lines, utility poles, transformers and generators as utilities replace aging equipment or harden it against extreme weather

The data centers needed to accommodate the artificial intelligence boom are still in the regulatory planning stages, Pridemore said, and the Data Center Coalition, which represents Big firms and data center developers, has said its members are committed to paying their fair

But growing evidence suggests that the electricity bills of some Americans are rising to subsidize the massive energy needs of Big as the U.S. competes in a race against China for artificial intelligence superiority

Data and analytics firm Wood Mackenzie published a report in recent weeks that suggested 20 posed or effective specialized rates for data centers in 16 states it studied aren’t 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 ly paying for data center power needs

States are responding 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

In a filing last month, it said that would avoid a “massive wealth transfer” from average people to companies

At least a dozen states are eyeing ways to make data centers pay higher local transmission costs

In Oregon, a data center hot spot, lawmakers passed legislation in June ordering state utility regulators to develop new — presumably higher — power rates for data centers

New Jersey’s governor signed legislation last month commissioning state utility regulators to study whether ratepayers are being hit with “unreasonable rate increases” to connect data centers and to develop a specialized rate to charge data centers

In some other states, Texas and Utah, governors and lawmakers are trying to avoid a supply-and-demand crisis that leaves ratepayers on the hook — or in the dark

Doubts states tecting ratepayers In Indiana, state utility regulators apved a settlement between Indiana Michigan Power Co., Amazon, Google, Microsoft and consumer advocates that set parameters for data center payments for service

Kerwin Olsen, of the Citizens Action Council of Indiana, a consumer advocacy group, signed the settlement and called it a “pretty good deal” that contained more consumer tections than what state lawmakers passed

But, he said, state law doesn’t force large power users data centers to publicly reveal their electric usage, so pinning down whether they’re paying their fair of transmission costs “will be a challenge.” In a March report, the Environmental and Energy Law gram at Harvard University questioned the motivation of utilities and regulators to shield ratepayers from footing the cost of electricity for data centers

Both utilities and states have incentives to attract big customers data centers, it said

To do it, utilities — which must get their rates apved by regulators — can offer “special deals to favored customers” a data center and effectively shift the costs of those discounts to regular ratepayers, the wrote

Many state laws can shield disclosure of those rates, they said

In Pennsylvania, an emerging data center hot spot, the state utility commission is drafting a model rate structure for utilities to consider adopting

An overarching goal is to get data center developers to put their money where their mouth is. “We’re talking real transmission upgrades, potentially hundreds of millions of dollars,” commission chairman Stephen DeFrank said. “And that’s what you don’t want the ratepayer to get stuck paying for.” Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world

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