A new analysis by Bloomberg has uncovered the extraordinary impact that power-hungry data centers already have had on the electricity bills of millions of ordinary Americans, and the news is not good.
Over the past five years, Americans who live in areas near data centers have seen their electricity bills increase by as much as 267%, Bloomberg found.
“It’s killing my pockets,” said Antoinette Robinson, a resident of East Baltimore, Maryland, per Bloomberg.
What’s happening?
As massive new data centers used to power artificial-intelligence models and cloud computing have sprouted up across the U.S. and around the world, they have consumed larger and larger amounts of electricity, outpacing new sources of electricity production.
According to basic economic principles, when demand goes up faster than supply, prices increase. As a result, millions of Americans, many of whom already were struggling to make ends meet, have seen their electric bills skyrocket.
“Without mitigation, the data centers sucking up all the load is going to make things really expensive for the rest of Americans,” said David Crane, the CEO of Generate Capital, per Bloomberg. Crane warned the strain on power supplies in certain markets could result in brownouts as soon as the next year or two.
In 2023, data centers consumed 4.4% of all electricity produced in the U.S., according to a Department of Energy study. The same study projected that, by 2028, that figure could reach 12%, with data centers consuming as much as 580 terawatt-hours per year.
By way of comparison, in 2019, the entire country of Canada consumed a total of 530 terawatt-hours of electricity, according to the International Energy Agency. That year, Canada ranked sixth out of all nations in terms of energy consumption.
Why does data-center power consumption matter?
While many experts have warned of the coming data-center power crunch, Bloomberg’s analysis has shown that, for many Americans, the electricity shortages have already become a harsh economic reality.
Nicole Pastore, who has seen her own electricity costs go up by 50% in just the past year, serves as a judge overseeing rental disputes in Baltimore. In that capacity, she has observed firsthand the impact that skyrocketing power prices have had on many of the city’s most vulnerable residents.
“It’s utilities versus rent,” Pastore explained, per Bloomberg. “They want to stay in their home, but they also want to keep their lights on.”
Many hard-hit residents wonder why they should have to, in effect, subsidize the country’s AI boom, while already-wealthy tech companies rake in the resulting profits.
“They can say this is going to help with AI, but how is that going to help me?” asked Kevin Stanley, an East Baltimore resident who is unable to work because of his glaucoma, according to Bloomberg. “How’s that going to help me pay my bill?”
What’s being done about skyrocketing energy prices?
If things continue on their current path, the problem of electricity shortages and skyrocketing energy prices will only get worse. As tech companies in the U.S. race to keep pace in the fierce competition to dominate artificial intelligence, even more massive — and more power-hungry — data centers are in the works.
With reducing data centers’ power usage looking unlikely, America must bring more energy production online — and fast. Meanwhile, policymakers could force tech companies to pay more for their own energy use and the strain they place on power grids, rather than pushing those costs onto consumers.
Unfortunately, recent policy changes have turned the U.S. away from cleaner, renewable sources of energy and toward dirtier, extracted fuels, which has hurt both the prospects for new electricity production and the environment.
According to S&P Global, the worldwide waiting list for the turbines used in gas-fueled power plants is currently seven years long, not nearly fast enough to meet rising demand.
By comparison, renewable-energy facilities such as solar arrays and wind farms can be brought online much more quickly and at much lower environmental costs.
To make a difference, you can help push for a return to policies that favor cleaner, renewable-energy production by contacting your elected representatives and voting for candidates who share your energy priorities.
Additionally, by installing solar panels on your home, you can drop your own electricity bill to practically zero while also reducing demand on already-maxed-out power grids.
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