- US senators accuse Big Tech of letting households pay rising electricity bills
- Data centers consume hundreds of megawatts, severely straining regional power grids
- Private contracts hide which companies are really paying for electricity expansion
Three Democratic US senators – Elizabeth Warren, Chris Van Hollen and Richard Blumenthal – are pressing major technology companies to explain why electricity bills continue to rise in regions packed with big data facilities.
Their letters are addressed to companies investing deeply in cloud hosting and large-scale AI infrastructure.
Lawmakers argue that public guarantees on absorbing energy-related costs do not align with what consumers are experiencing through higher utility rates.
Tech companies under fire for energy bill glitches
“Tech companies have paid lip service to covering their data center energy costs, but their actions have proven otherwise,” the trio wrote.
“When utilities expand their grid infrastructure, they incorporate the cost of the expansion into their utility rates, passing the additional costs onto their customers,” they added.
The same day the letters were made public, Amazon published a study it had commissioned from Energy and Environmental Economics.
The report states that data center hosting facilities generate enough revenue for utilities to offset the cost of serving them.
In some scenarios, the study suggests that excess revenue could even benefit other taxpayers.
However, the analysis relies heavily on projections and modeled results rather than verified historical billing data.
There is not much disagreement that modern data centers consume a large amount of electricity.
Facilities supporting AI workloads often require hundreds of megawatts, with some demands approaching gigawatt scale.
Many regional networks were not built for this level of sustained consumption, forcing utilities to invest billions in new generation, transmission lines, and local upgrades to keep servers reliably online.
According to the senators, utilities typically recover the costs of infrastructure expansion by raising rates among their customer base.
This means that residential and small business users absorb the costs associated with industrial-scale computing projects.
Research cited in the letters suggests that electricity prices could rise 8% nationwide by 2030, with much steeper increases in states with higher data center density, such as Virginia.
A recurring concern has to do with private contracts between utility companies and technology companies.
Studies referenced by policymakers indicate that many companies successfully negotiate favorable rates while avoiding direct liability for network upgrades.
Confidentiality clauses prevent regulators and the public from clearly seeing how costs are distributed.
This lack of transparency makes it difficult to reconcile corporate claims with documented increases in wholesale and retail electricity prices.
“Contracts between data centers and utilities that set electricity prices and other terms are typically confidential,” the senators wrote.
“Tech companies looking for a site for a new data center reportedly use hardball tactics to get lower rates… and then [pressure] public services to give them favorable rates by suggesting they could build elsewhere.
Amazon maintains that its facilities help rather than hurt taxpayers, even though anecdotal evidence and regulatory records suggest otherwise.
Some regions with significant data center activity have reportedly seen sharp increases in wholesale energy prices in recent years.
Projections on potential benefits remain difficult to reconcile with current billing trends, leaving open questions about who ultimately pays for the rapid expansion of AI-powered infrastructure.
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