Tech companies are investing billions of dollars to build energy-hungry data centers at a time when demand for electricity in the United States is already increasing. It has politicians thinking about rising utility bills, not least because voters tend to punish their elected representatives when bills spike.
In January, the White House proposed that tech companies help pay for new power plants added to the grid on their behalf. Senators Josh Hawley, a Missouri Republican, and Richard Blumenthal, a Democrat from Connecticut, introduced a bill last week that would require data centers to build their own energy sources. Other proposals floating around include charging data centers more than households for electricity and banning construction altogether.
The stakes are high, experts say. Flawed policies could saddle Americans with higher electricity bills, force utilities to make upgrades they’ll never use, or put the United States at a disadvantage in the global race for A.I. dominance.
Here’s a look at the main proposals.
Make tech companies pay their way
Data centers can increase energy costs in two main ways. They have to be connected to the grid, which can require extra transmission lines, new power generation resources and other infrastructure investments. Then once they come online, they can drive up regional electricity prices through added demand.
Right now, the costs in the first category are generally spread across an entire region, according to Rachel Mural, senior research associate at Harvard’s Belfer Center for Science and International Affairs.
But in recent weeks, Microsoft and Anthropic have both announced plans to “pay their way.” Anthropic said it would cover 100 percent of the cost of grid upgrades for its data centers, work to generate more power, and shield people from higher costs by paying for “demand-driven price effects.”
Even if every tech company made the same commitment, fulfilling those promises might be easier said than done. For starters, the accounting is tricky. It can be really hard to figure out exactly which grid upgrades to attribute to a proposed data center. Many facilities are being built in places that already need new plants or have older powers stations long overdue for repairs.
“The question of how we spread out these costs over the right end-users is really, really challenging because people technically are benefiting from these upgrades,” Mural said.
Then there’s the problem of data centers that never get built. Utilities have to plan for all the data centers that join a waiting line to connect to the grid, and invest in upgrades accordingly. The problem is that many projects have begun entering several queues at once, meaning utilities wind up planning for projects that are ultimately built elsewhere, Mural said.
In January, a White House fact sheet outlining plans to “build big power plants again” urged the grid operator PJM, which manages electricity for 13 states, to require data centers to pay for new power sources built on their behalf “whether they show up and use the power or not.”
Make data centers build their own power plants
Senators Hawley and Blumenthal introduced legislation last week that would sidestep the cost-sharing issue by requiring data centers to build their own power sources.
Several tech companies have announced plans to invest in power generation. Microsoft has said it will power its data centers with nuclear energy. Google announced plans in December to acquire a developer of renewable power sources for nearly $5 billion. Meta is building a sprawling data center in Louisiana that will have its own natural gas turbines.
But even when data centers produce all or some of their own energy, they usually still need to be connected to the grid for backup power, or for day-to-day needs as they wait for their own power plants to come online. “At the end of the day, it still means the utility needs to plan for having the data center,” Mural said.
The costs of those utility investments could add up quickly, said Christopher Knittel, a professor of energy economics at the Massachusetts Institute of Technology. “If it’s just a few industrial customers with behind-the-meter power plants, it doesn’t really matter,” Dr. Knittel said. But as data centers grow bigger and more plentiful, he added, “these things are going to matter so much.”
“We can get it right,” he said. “But sadly, too, if we don’t do it right, we can get it really wrong.”
Ban data center construction
Senator Bernie Sanders of Vermont, an independent, has endorsed a data center moratorium, and last week Democratic legislators in New York and Wisconsin introduced bills that would temporarily bar new construction.
A pause like that would give lawmakers a chance to think about which data center policies make the most sense, avoiding rushed grid upgrades that could leave taxpayers with bills for unbuilt facilities. “It’s certainly an understandable intervention if you just care about the grid,” Dr. Knittel said. “But if you care about the U.S.’s place in the A.I. wars, now you’re starting to worry, right?”
Journey to Antarctica
Back on land, with more stories to tell
The sights couldn’t be more familiar. Grass. Trees. Roads. Dirt.
Land.
And yet, after two months in Antarctica, the rolling hills and rocky bluffs of New Zealand’s South Island may as well have been on another planet.
The researchers and crew aboard the icebreaker Araon woke up on Thursday to the welcoming sight of civilization off the port side, and with it, the knowledge that our expedition was coming to an end. Gear will be boxed up. Goodbyes will be said. Plans for future Antarctic research will be hatched.
But we’re not quite done with our coverage. I’ve still got more stories in my notebook that we’ll be publishing in the coming days and weeks. So, stay tuned. — Raymond Zhong
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Claire Brown covers climate change for The Times and writes for the Climate Forward newsletter.
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