Governors, senators and even some tech executives increasingly agree that the companies behind data centers need to pay more for electricity and to address the strain they are causing on the grid.
But there is little consensus about how much they ought to pay.
A growing body of research suggests that the rapid growth of data centers to support the development of artificial intelligence is beginning to drive up electricity costs for residents and small businesses in some places. That has prompted Republicans and Democrats from at least a dozen states — including Florida, Oklahoma, New York and California — to propose legislation and consider other steps to protect residents from higher electricity costs.
And on Thursday, Senator Chris Van Hollen of Maryland, a Democrat, introduced legislation that he said would ensure that technology companies paid their fair share of costs for upgrades to the electric grid that are needed to provide energy to data centers.
Mr. Van Hollen’s bill cites recent analysis that indicates that by 2028, the share of all U.S. electricity used by data centers could almost double to as much as 12 percent. That, the senator asserts, will push up electricity prices for everybody.
“What we hope to do is create a national set of rules so that no matter where someone wants to build a data center, consumers know they are not going to get screwed with the costs,” Mr. Van Hollen said in an interview with The New York Times.
The technology industry has responded to such proposals in a variety of ways. Executives at some companies like Microsoft have suggested that they are willing to pay more for electricity while others have said that they are already paying their fair share and have opposed efforts aimed at making them cough up more money.
One fundamental problem is the wide disagreement over how the costs of energy and of expanding and running the grid should be divided between individuals, ordinary businesses and large users like data centers.
The problem is most intense in some states, including Mr. Van Hollen’s. Maryland is part of the nation’s largest electricity market known as PJM, which serves all or parts of 13 states and the District of Columbia. PJM’s grid has the most data centers in the country, and electricity rates in its states are rising quickly.
Jeff Shields, a spokesman for PJM, said the grid manager “is taking up many of these issues in its stakeholder process on large load additions and a decision from the PJM board is forthcoming.”
A recent study from the Lawrence Berkeley National Laboratory found that data centers very likely reduced average retail electricity prices in recent years by spreading the fixed grid costs over more customers. But the study’s data ended in 2024, and the authors said it was hard to know whether this trend would continue as energy demand continued to rise sharply. The report noted a large increase in power prices last year in the Mid-Atlantic region linked to the expansion of data centers.
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Electricity costs have steadily increased across the country in recent years, with the national average rising 5 percent in October from a year earlier, according to data from the Energy Information Administration. A residential customer who used the typical amount of power of 1,000 kilowatt-hours paid about $180, up from $170 a year earlier. Electricity rates in three PJM states — Maryland, New Jersey and Virginia — were up 11 to 16 percent.
In addition to protecting consumers from higher costs, lawmakers are also trying to prevent an increase in blackouts and other grid problems.
Gov. Ron DeSantis of Florida, has proposed a “Artificial Intelligence Bill of Rights” that would, among other things, allow local governments to prohibit construction of data centers to prevent higher electricity costs and stress on the power system.
For its part, the technology industry has worked to compromise with states in some cases while fighting other proposals.
Last month, Amazon released a study it commissioned that concluded the tech company had more than covered its costs for power, allowing utilities to reduce rates for other customers.
Microsoft announced a plan on Tuesday that included promises to “pay our way to ensure our data centers don’t increase your electricity prices.” The plan also commits to minimizing water use and offering jobs and training to local residents.
“There’s no denying that A.I. consumes large amounts of electricity,” Brad Smith, vice chairman and president of Microsoft, said in a blog post. “While advances in technology may someday change this, today, this is the reality.”
President Trump praised Microsoft and said other technology companies would also address the issue. “I never want Americans to pay higher Electricity bills because of Data Centers,” he wrote.
The Data Center Coalition, an industry association, said that the attention from state and federal governments highlighted the importance of the role the technology played in the 21st-century economy and that the tech industry was committed to covering its costs.
“Data centers are committed to being responsible neighbors in the communities where they operate,” Josh Levi, president of the coalition, said in a statement. “The industry remains committed to paying its full cost of service for the energy it uses, and publications from states like Virginia and Arizona confirm we’re delivering on that commitment.”
Tech executives say artificial intelligence will make the economy much more productive. Many of them have also made commitments to use energy sources that do not emit greenhouse gases or offset emissions when they do have to use fossil fuels, the primary cause of climate change.
But some climate and energy experts have expressed concerns that the expansion of data centers is leading to greater use of fossil fuels.
Ivan Penn is a reporter based in Los Angeles and covers the energy industry. His work has included reporting on clean energy, failures in the electric grid and the economics of utility services.
The post State and Federal Lawmakers Want Data Centers to Pay More for Energy appeared first on New York Times.
