Latest news with #MarkWolfe
Entrepreneur
5 days ago
- Business
- Entrepreneur
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.
Yahoo
5 days ago
- Business
- Yahoo
The AI revolution is likely to drive up your electricity bill. Here's why.
New Jersey residents got some bad news earlier this year when the state's public utilities board warned that their electricity bills could surge up to 20% starting on June 1. A key driver in that rate hike: data centers. The spread of these large-scale computing facilities across the U.S. amid growing demand for artificial intelligence, data storage and other technology services is projected to increase electricity consumption to record highs in the coming years, according to experts. A report from Schneider Electric, a company that specializes in digital automation and energy management, projects that electricity demand will increase 16% by 2029, mainly due to the proliferation of data centers. Most data centers rely on the nation's electrical grid for energy, meaning it will be Americans ratepayers who pick up the tab, Mark Wolfe, executive director of the National Energy Assistance Directors Association, a group that represents states on energy issues. "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," he told CBS MoneyWatch in an email. "That means higher electricity bills for everyday households, while tech companies benefit from sweetheart deals behind closed doors." More data centers, more power Thousands of data centers now dot the country, with the largest concentrations in Virginia, California and Texas. The number of data centers in the U.S. nearly doubled between 2021 and 2024, according to a report from Environment America, a network of environmental groups. It's not just the number of data centers that are expected to rise, but the size. "The trend has been bigger data centers," Dave Turk, the former deputy secretary of the U.S. Department of Energy, told CBS MoneyWatch. "They tend to be more energy efficient." Spurring that expansion is the rapid growth of "generative" AI companies that are consuming vast amounts of electricity to train so-called Large Language Models like ChatGPT and power. AI searches use 10 times more electricity than normal internet searches, according to a study from the Electric Power Research Institute, a nonprofit organization. "AI is an increasing part of data centers and certainly responsible for increased electricity demand," Turk said. Data centers, which contain thousands of computer servers, networking gear and other infrastructure, also require power to cool their systems and keep them from overheating. Torsten Sløk, chief economist at asset management firm Apollo Global Management, estimates that data centers will require an additional 18 gigawatts of power capacity by 2030. To put that into context, New York City power demand is about 6 gigawatts. About 4.4% of U.S. electricity went to power data centers in 2023, according to a Department of Energy's Lawrence Berkeley National Laboratory study. Not all of that demand is related to AI, but it represents a portion, Turk said. Other factors pushing up prices The spread of data centers isn't the only reason U.S. electricity prices are surging. The price of natural gas, inflation, ongoing electrification of buildings and vehicles, and other factors also play an important role. But utilities are factoring the high demand from data centers into their pricing models. For example, when Dominion Energy, one of the Virginia's largest utilities, in April proposed a price hike of $8.51 per month in 2026, the company also floated the idea of a "new rate class for high energy users, including data centers." Electricity prices have risen 4.5% in the last year, according to recent data from the Labor Department, and are estimated to surge this summer. Energy costs also drift higher if a Republican-backed budget package, dubbed the "big beautiful bill," is passed and signed into law by President Trump. Analysts from Rhodium Group predict that the bill, which would repeal a slate of tax credits created under the Inflation Reduction Act, could increase a family's energy expenditures by nearly $400 a year. Beyond price increases, the heightened energy demand from data centers could also compromise the reliability of the grid, according to experts. In a recent report, the North American Electric Reliability Corp said that facilities that service AI and cryptocurrency companies are being developed at a faster pace than the power plants and transmission lines to support them, "resulting in lower system stability. PJM, a grid operator in 13 states plus Washington, D.C., cited data center demand as one of the factors that could lead to capacity shortages in its 2025 forecast. Harry Chapin: Songwriter, activist and father How the U.S. Army was born Early details on arrest in Minnesota lawmaker shootings
CBS News
6 days ago
- Business
- CBS News
The AI revolution is likely to drive up your electricity bill. Here's why.
New Jersey residents got some bad news earlier this year when the state's public utilities board warned that their electricity bills could surge up to 20% starting on June 1. A key driver in that rate hike: data centers. The spread of these large-scale computing facilities across the U.S. amid growing demand for artificial intelligence, data storage and other technology services is projected to increase electricity consumption to record highs in the coming years, according to experts. A report from Schneider Electric, a company that specializes in digital automation and energy management, projects that electricity demand will increase 16% by 2029, mainly due to the proliferation of data centers. Most data centers rely on the nation's electrical grid for energy, meaning it will be Americans ratepayers who pick up the tab, Mark Wolfe, executive director of the National Energy Assistance Directors Association, a group that represents states on energy issues. "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," he told CBS MoneyWatch in an email. "That means higher electricity bills for everyday households, while tech companies benefit from sweetheart deals behind closed doors." More data centers, more power Thousands of data centers now dot the country, with the largest concentrations in Virginia, California and Texas. The number of data centers in the U.S. nearly doubled between 2021 and 2024, according to a report from Environment America, a network of environmental groups. It's not just the number of data centers that are expected to rise, but the size. "The trend has been bigger data centers," Dave Turk, the former deputy secretary of the U.S. Department of Energy, told CBS MoneyWatch. "They tend to be more energy efficient." Spurring that expansion is the rapid growth of "generative" AI companies that are consuming vast amounts of electricity to train so-called Large Language Models like ChatGPT and power. AI searches use 10 times more electricity than normal internet searches, according to a study from the Electric Power Research Institute, a nonprofit organization. "AI is an increasing part of data centers and certainly responsible for increased electricity demand," Turk said. Data centers, which contain thousands of computer servers, networking gear and other infrastructure, also require power to cool their systems and keep them from overheating. Torsten Sløk, chief economist at asset management firm Apollo Global Management, estimates that data centers will require an additional 18 gigawatts of power capacity by 2030. To put that into context, New York City power demand is about 6 gigawatts. About 4.4% of U.S. electricity went to power data centers in 2023, according to a Department of Energy's Lawrence Berkeley National Laboratory study. Not all of that demand is related to AI, but it represents a portion, Turk said. Other factors pushing up prices The spread of data centers isn't the only reason U.S. electricity prices are surging. The price of natural gas, inflation, ongoing electrification of buildings and vehicles, and other factors also play an important role. But utilities are factoring the high demand from data centers into their pricing models. For example, when Dominion Energy, one of the Virginia's largest utilities, in April proposed a price hike of $8.51 per month in 2026, the company also floated the idea of a "new rate class for high energy users, including data centers." Electricity prices have risen 4.5% in the last year, according to recent data from the Labor Department, and are estimated to surge this summer. Energy costs also drift higher if a Republican-backed budget package, dubbed the "big beautiful bill," is passed and signed into law by President Trump. Analysts from Rhodium Group predict that the bill, which would repeal a slate of tax credits created under the Inflation Reduction Act, could increase a family's energy expenditures by nearly $400 a year. Beyond price increases, the heightened energy demand from data centers could also compromise the reliability of the grid, according to experts. In a recent report, the North American Electric Reliability Corp said that facilities that service AI and cryptocurrency companies are being developed at a faster pace than the power plants and transmission lines to support them, "resulting in lower system stability. PJM, a grid operator in 13 states plus Washington, D.C., cited data center demand as one of the factors that could lead to capacity shortages in its 2025 forecast.
Yahoo
16-05-2025
- Business
- Yahoo
Home electricity bills forecast to reach a 12-year high this summer
High temperatures projected across the U.S. summer could take a toll on Americans' budgets by driving up the price of keeping homes cool. Home electricity bills are expected to rise to an average of $784 for the summer period, up more than 6% from $737 in 2024 and marking a 12-year record, according a new analysis from the National Energy Assistance Directors Association (NEADA). The growing expense comes on the heels of a cold winter that drove up heating costs for many Americans, and as consumers continue to grapple with higher prices on everyday goods. Consumers are also increasingly expressing concerns about how tariffs could affect their day-to-day costs, Gallup polling has found. "We found that it's going to be another expensive summer for air conditioning because temperatures will stay high, and electricity prices have been rising faster than inflation," energy economist Mark Wolfe, executive director of NEADA, told CBS MoneyWatch. The anticipated spike in residential electricity costs from June through September is due to the combination of rising cost of electricity, which is outpacing inflation, with higher temperatures, NEADA said. Those trends mean that households are not only expected to pay higher prices for electricity, but will likely consume more of it than they did last summer because of the need for more cooling. "It's not just temperatures that are going up, but the cost of cooling is going up," Wolfe said. "And when electricity prices go up, they tend to stay high. So even if temperatures moderate, your bill might go up because of the cost of electricity." Unpaid bills Energy costs eat up a larger share of low-income families' budgets compared to higher-earners. Low-income households spend roughly 8.6% of their incomes on energy costs, compared to 3% for those that are higher up the income ladder, according to NEADA. Worryingly, the lowest earners could struggle to afford to keep their homes cool, Wolfe noted. The most recent Census Household Pulse Survey found that 37% of low- and moderate-income households could not afford their energy bills for at least one month between April 2023 and April 2024. If those households find themselves in a financial crunch this summer, they may opt to turn off their air conditioning, which could pose serious health risks, noted Wolfe. "Last winter was cold, so they're just getting over paying their heating bills, and are now facing higher summer cooling costs," Wolfe explained. "And while people understand that if you don't use heat in the winter, your pipes will freeze, that won't happen in the summer." Reluctance to turn on one's air conditioning can have adverse health effects like heat stroke. "While this won't do damage to your building, it will do damage to you," Wolfe said. Extreme heat and health Public assistance programs haven't kept pace with the evolving climate, according to Wolfe. "We're having heat waves that are lasting longer, and the systems in place to protect families have not kept up," he said. This summer's cooling cost forecast should be taken as a sign that state and federal assistance programs require modernization, according to Wolfe. Only 26 states offer summer cooling assistance to help Americans pay their bills. Thirty-three states have no protections in place to prevent utilities company from shutting off customers' access to electricity when they're behind on payments. Extreme heat is the leading weather-related killer in the United States, according to the National Weather Service. Wolfe says that taking steps to modernize your home can actually help households save money. For example, adding insulation to your house can help control energy bills. "Families should start preparing for long-term extreme weather and think about the energy efficiency of their cooling systems," he said. Texas mom accused of buying ammunition for son who officials say planned school attack These Republicans voted against the reconciliation bill in House Budget Committee GOP budget package fails to clear key House committee
CBS News
16-05-2025
- Business
- CBS News
Home electricity bills may reach a 12-year high this summer, driven by high temperatures, inflation
High temperatures projected across the U.S. summer could take a toll on Americans' budgets by driving up the price of keeping homes cool. Home electricity bills are expected to rise to an average of $784 for the summer period, up more than 6% from $737 in 2024 and marking a 12-year record, according a new analysis from the National Energy Assistance Directors Association (NEADA). The growing expense comes on the heels of a cold winter that drove up heating costs for many Americans, and as consumers continue to grapple with higher prices on everyday goods. Consumers are also increasingly expressing concerns about how tariffs could affect their day-to-day costs, Gallup polling has found. "We found that it's going to be another expensive summer for air conditioning because temperatures will stay high, and electricity prices have been rising faster than inflation," energy economist Mark Wolfe, executive director of NEADA, told CBS MoneyWatch. The anticipated spike in residential electricity costs from June through September is due to the combination of rising cost of electricity, which is outpacing inflation, with higher temperatures, NEADA said. Those trends mean that households are not only expected to pay higher prices for electricity, but will likely consume more of it than they did last summer because of the need for more cooling. "It's not just temperatures that are going up, but the cost of cooling is going up," Wolfe said. "And when electricity prices go up, they tend to stay high. So even if temperatures moderate, your bill might go up because of the cost of electricity." Unpaid bills Energy costs eat up a larger share of low-income families' budgets compared to higher-earners. Low-income households spend roughly 8.6% of their incomes on energy costs, compared to 3% for those that are higher up the income ladder, according to NEADA. Worryingly, the lowest earners could struggle to afford to keep their homes cool, Wolfe noted. The most recent Census Household Pulse Survey found that 37% of low- and moderate-income households could not afford their energy bills for at least one month between April 2023 and April 2024. If those households find themselves in a financial crunch this summer, they may opt to turn off their air conditioning, which could pose serious health risks, noted Wolfe. "Last winter was cold, so they're just getting over paying their heating bills, and are now facing higher summer cooling costs," Wolfe explained. "And while people understand that if you don't use heat in the winter, your pipes will freeze, that won't happen in the summer." Reluctance to turn on one's air conditioning can have adverse health effects like heat stroke. "While this won't do damage to your building, it will do damage to you," Wolfe said. Extreme heat and health Public assistance programs haven't kept pace with the evolving climate, according to Wolfe. "We're having heat waves that are lasting longer, and the systems in place to protect families have not kept up," he said. This summer's cooling cost forecast should be taken as a sign that state and federal assistance programs require modernization, according to Wolfe. Only 26 states offer summer cooling assistance to help Americans pay their bills. Thirty-three states have no protections in place to prevent utilities company from shutting off customers' access to electricity when they're behind on payments. Extreme heat is the leading weather-related killer in the United States, according to the National Weather Service. Wolfe says that taking steps to modernize your home can actually help households save money. For example, adding insulation to your house can help control energy bills. "Families should start preparing for long-term extreme weather and think about the energy efficiency of their cooling systems," he said.
