Utilities across the United States are moving quickly to expand power infrastructure as demand for artificial intelligence and related technology services climbs. The costs of those upgrades are expected to flow through to ordinary households in the form of higher electricity rates. Experts tracking the sector say ratepayers, rather than the companies building the facilities, will shoulder much of the burden. ## Rising Demand Meets an Aging Grid Data centers already account for a growing share of national electricity use, and the pace is accelerating. A Schneider Electric analysis projects overall electricity demand will climb 16 percent by 2029, driven largely by these facilities. Most draw power directly from the regional grid, so any new generation, transmission lines, or substations required to serve them eventually appear in utility rate filings. New Jersey residents received an early illustration of the trend. State regulators approved increases that could reach 20 percent for some customers beginning in June, with data-center growth cited as a primary factor. Similar pressures are surfacing in other states where large computing campuses are under construction or already operating. ## How AI Changes the Energy Equation The shift toward generative AI adds another layer of intensity. Training and running large language models requires far more electricity than conventional computing tasks. One industry study found that an AI-powered search consumes roughly ten times the power of a standard web query. Cooling the servers that perform these operations further raises the load. Industry observers note that the facilities themselves are growing larger even as individual servers become more efficient. Former Department of Energy official Dave Turk has pointed out that the trend favors bigger installations, which still translate into substantial aggregate demand on the grid. Projections from Apollo Global Management economist Torsten Sløk suggest data centers could require an additional 18 gigawatts of capacity by 2030 – an amount comparable to the entire peak load of New York City. ## Who Pays and How the Costs Are Allocated Mark Wolfe, executive director of the National Energy Assistance Directors Association, has warned that utilities are adding infrastructure and adjusting rates with limited public scrutiny. “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. The result, he said, is higher bills for households while technology firms secure favorable arrangements. Electricity prices have already risen 4.5 percent over the past year, according to Labor Department data. While natural-gas costs, inflation, and broader electrification efforts also contribute, utilities are explicitly incorporating data-center forecasts into their planning. Dominion Energy in Virginia, for example, has proposed both a general rate increase and a separate rate class for high-volume users that includes data centers. ## Grid Reliability Concerns Surface Beyond price, the speed of data-center development is raising questions about system stability. The North American Electric Reliability Corporation has noted that facilities serving AI and cryptocurrency operations are advancing faster than supporting power plants and transmission lines, which could reduce overall grid resilience. Grid operator PJM, covering 13 states and the District of Columbia, has flagged data-center demand as a factor that may contribute to future capacity shortfalls. These developments arrive as utilities file for billions of dollars in rate increases nationwide. The pattern suggests that the infrastructure buildout needed to support AI growth will continue to influence household costs in the years ahead. **What matters now** Utilities and regulators are weighing new rate structures that could shift more of the incremental costs onto the largest users. How those decisions unfold will determine whether the AI-driven expansion of data centers remains largely invisible on monthly bills or becomes a visible line item for millions of households. ([1])
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.