Electric utilities serving roughly 65 million residential customers have proposed or approved rate increases tied to the power demands of artificial intelligence data centers, pushing household electricity bills higher across at least a dozen states, according to an analysis of utility filings.
Data centers now account for about 4 percent of total U.S. electricity consumption, up from roughly 1.5 percent a decade ago, according to the Electric Power Research Institute. That figure is projected to reach 9 percent by 2030 as companies including Amazon, Microsoft, Google, and Meta expand their AI computing capacity.
The rate hikes vary by state. In Virginia, Dominion Energy won approval for a rate increase that adds roughly $14 to the average monthly household bill. In Ohio, AEP Ohio reached a settlement requiring data center operators to cover 85 percent of new transmission costs. In Georgia, Georgia Power has added $2.1 billion in generation capacity largely to serve new data center load.
The core dispute centers on who pays for the transmission lines, substations, and power plants built to serve data centers that can each consume as much electricity as 80,000 homes. Consumer advocates argue that utilities are spreading those costs across all ratepayers rather than charging the data center operators directly.
"The utilities are socializing the costs and privatizing the benefits," said Tyson Slocum, director of the energy program at Public Citizen, in testimony filed with the Virginia State Corporation Commission. "Residential customers should not be subsidizing the buildout of infrastructure for the world's largest technology companies."
Utility companies counter that data centers bring substantial tax revenue and job creation, and that upgraded transmission infrastructure benefits all customers by improving grid reliability. Dominion Energy spokesperson Aaron Ruby said the company's rate structure ensures data centers pay their "fair share" of infrastructure costs.
The Federal Energy Regulatory Commission has taken notice. In 2024, FERC launched a proceeding to examine how large-load customers, including data centers, should be charged for transmission service. The commission has not issued a final rule.
State regulators in at least eight states have opened proceedings of their own. The Virginia General Assembly passed legislation in 2024 requiring utilities to report data center load projections and their cost impacts on residential ratepayers, the first such law in the country.
Meanwhile, data center construction continues at a record pace. The U.S. added 12 gigawatts of new data center capacity in 2024, according to the consulting firm Wood Mackenzie, enough to power roughly 9 million homes. Another 18 gigawatts are under construction or in advanced planning stages.
Residential electricity prices rose 4.4 percent nationally in 2024, outpacing overall inflation of 2.9 percent, according to the Bureau of Labor Statistics. In states with heavy data center concentration, the gap was wider: Virginia saw a 6.2 percent increase, and Ohio saw 5.8 percent.
