Why Data Centers And AI Are To Blame For Your Electric Bill Going Up

As companies continue to invest heavily in AI, it has meant an increase in the number of data centers necessary to train and deploy the technology. These data centers are energy-intensive facilities, which is causing the cost of electricity to go up in just about every state, according to Axios. It comes at a time when Americans’ wallets are already being stretched by the costs of daily living.

The U.S. Energy Information Administration shows that electricity bills this year have gone up nationwide compared to last year. Most states have seen an increase close to 10%, although those living in Maine are being hit with an eye-watering increase of roughly 36%. Only five states saw a decrease in costs, with Nevada leading the way with a decline of about 17%.

While a rise in electricity costs isn’t out of the ordinary, analysts point to data centers and the power they require as key drivers for the current wave of increases. Energy providers are having to rapidly invest in infrastructure such as transmission lines and other equipment, which are key parts of the grid, to be able to keep up with the demand generated by these data centers. In turn, companies pass the costs of these upgrades on to customers.


These price increases will likely be a part of the foreseeable future. The Virginia General Assembly's Joint Legislative Audit and Review Commission released a report that says residents should expect a price hike of anywhere from $14 to $37 by 2040. These potential future increases don’t take inflation into account.

Of course, electricity isn’t the only resource being consumed by data centers, as these facilities also make use of copious amounts of water to cool off equipment. How soon until water sources are being stressed the same way the electric grid is being pushed to the limit?

Hopefully companies working on AI can figure out a way of making LLMs more efficient rather than building more energy-hungry data centers.