Electric Bill Prices Rising, Are AI Data Centers to Blame?
Is your electric bill higher than normal? Sure, it's summer in the U.S., and a higher bill due to air conditioning costs can be expected. In fact, CBS reports that electricity prices have risen 4.5% in the last year, according to recent data from the Labor Department.
But what about a higher bill due to AI? It's happening to electric customers across the country, even if they've never asked a chatbot a question.
Related: Saying 'Please' and 'Thank You' to ChatGPT Costs OpenAI 'Tens of Millions of Dollars'
Customers in New Jersey, for example, are fuming over the news that their electric bills could surge up to 20% this summer due to data centers, per a new report in the local Patch outlet. But the entire U.S. could soon be affected.
Floodlight reports that the way electric companies currently set rates won't work with the unprecedented demand Big Tech has with AI, and highlights a report from Harvard's Electricity Law Initiative that said, unless the current system changes, U.S. consumers will be the ones who pay "billions of dollars" for it.
Mark Wolfe, executive director of the National Energy Assistance Directors Association, told CBS MoneyWatch the same — that the American taxpayers will be the ones footing the bill — not the AI companies.
"As utilities race to meet skyrocketing demand from AI and cloud computing, they're building new infrastructure and raising rates, often without transparency or public input," Wolfe said. "That means higher electricity bills for everyday households, while tech companies benefit from sweetheart deals behind closed doors."
Related: Excess Energy from AI Servers Is Heating the Pool at the 2024 Olympic Games — Here's How
Digital automation company, Schneider Electric, found that electricity demand will increase at least 16% in the U.S. by 2029 due to data centers. This is only expected to grow as the number of data centers also grows (it already doubled in the U.S. between 2021 and 2024, per a report from Environment America). And the number is increasing with generative AI and other technological advances.
Meanwhile, the rise in electricity needs could result in "lower system stability," according to a recent report by the North American Electric Reliability Corp., and a grid operator in 13 states and Washington, D.C., PJM, said data center demand could lead to "capacity shortages" in its 2025 forecast.
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