- US senators accuse Big Tech of leaving households to pay sky-high electricity bills
- Data centers use hundreds of megawatts, putting a serious strain on regional power grids
- Private contracts hide which companies are really paying for power expansion
Three US Democratic senators – Elizabeth Warren, Chris Van Hollen and Richard Blumenthal – are pressing big tech companies to explain why electricity bills continue to rise in regions full of big data facilities.
Their letters target companies deeply invested in cloud hosting and large-scale artificial intelligence infrastructure.
Lawmakers argue that public assurances to absorb power-related costs do not match what consumers experience through higher utility rates.
Technology companies under fire for electricity bill errors
“Tech companies have paid lip service to support to cover their data center energy costs, but their actions have shown otherwise,” the trio wrote.
“When utilities expand their grid infrastructure, they incorporate the cost of the expansion into their utility prices and pass the additional cost on to their customers,” they added.
On the same day the letters became public, Amazon released a study it commissioned from Energy and Environmental Economics.
The report claims that data center hosting facilities generate enough revenue for utilities to offset the costs of operating them.
In some scenarios, the study suggests that surplus income may even benefit other taxpayers.
However, the analysis relies heavily on projections and modeled results rather than verified historical billing data.
There is little dispute that modern data centers consume a large amount of electricity.
Facilities supporting AI workloads often require hundreds of megawatts, with some gigawatt-scale demand.
Many regional grids were not built for this level of continuous consumption, forcing utilities to invest billions in new generation, transmission lines and local upgrades to keep servers online reliably.
According to the senators, utilities typically recover infrastructure expansion costs by raising rates across their customer base.
This means that private and small businesses absorb expenses associated with industrial-scale computing projects.
Research cited in the letters points to electricity prices potentially rising 8% nationwide by 2030, with far steeper increases in data center-dense states like Virginia.
A recurring concern involves private contracts between utilities and technology companies.
Studies cited by lawmakers show that many companies successfully negotiate favorable rates while avoiding direct liability for net upgrades.
Confidentiality clauses prevent regulators and the public from clearly seeing how the costs are distributed.
This lack of transparency makes it difficult to reconcile the companies’ demands with documented increases in wholesale and retail electricity prices.
“Contracts between data centers and utilities that set electricity rates and other terms are typically confidential,” the senators wrote.
“Technology companies searching for a site for a new data center are reportedly using hard-nosed tactics to obtain lower prices … and then [pressure] utilities to give them favorable rates by suggesting they can build elsewhere instead.”
Amazon maintains that its facilities help rather than hurt taxpayers, despite anecdotal evidence and regulatory records that suggest otherwise.
Some regions with significant data center activity have reportedly seen wholesale electricity prices rise sharply in recent years.
Projections of potential benefits remain difficult to align with current billing trends, leaving open questions about who will ultimately pay for the rapid expansion of AI-powered infrastructure.
Via The register
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