Bloomberg analysis finds up to 267% hike in electricy bills
A Bloomberg News analysis found that wholesale electricity prices in some areas near significant data center activity increased by as much as 267% over five years. This is a major factor driving up household electricity costs, but it isn't the only one. The surge in energy consumption for AI and data centers puts pressure on regional power grids, often forcing utilities to invest in costly upgrades, with those expenses frequently passed down to consumers.
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Why data centers are increasing electricity costs
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Massive energy consumption: AI is fueling a rapid demand for computing power, and data centers—which house the necessary servers—are some of the biggest energy users in the country. The Department of Energy projects that data centers could consume up to 12% of all U.S. electricity by 2028, up from just 4.4% in 2023.
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Strained power grids: The immense and concentrated power needs of data centers put significant strain on aging electricity grids, requiring expensive infrastructure upgrades. Utilities then pass those costs on to residential customers through their rates. In 2024, a Union of Concerned Scientists analysis found that upgrades for data centers added $4.3 billion in costs for customers in seven states.
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Location matters: The impact of these high costs is most acutely felt in "data center alley" hotspots, such as Northern Virginia, but their effects can extend across entire regional grids. For example, Maryland residents have experienced the effects of the data center boom in neighboring Virginia.
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