OPINION:
One “crisis” I keep hearing about is how my electric bill is going to keep going up. Skyrocketing energy costs, they say, are all thanks to the new data centers being used to power artificial intelligence.
The oft repeated narrative is thus: Energy-thirsty AI facilities are going to use up most of our electricity.
Sounds scary, but it’s mostly wrong.
One “crisis” I keep hearing about is how my electric bill is going to keep going up. Skyrocketing energy costs, they say, are all thanks to the new data centers being used to power artificial intelligence.
The oft repeated narrative is thus: Energy-thirsty AI facilities are going to use up most of our electricity.
Sounds scary, but it’s mostly wrong.
A new report looks at how much people are paying for electricity across the country and why they’re paying those prices. It finds that most Americans don’t have skyrocketing electric bills. In fact, over the past five years, utility customers in 34 states have experienced below-average electricity rate increases.
Also, the notion that data centers are going to force electricity prices to go through the roof is not true. It depends on where you live. If you reside in the mid-Atlantic and parts of the Midwest that share their electric grids in an organization called PJM, then new data centers are potentially going to push up electricity rates.
This is happening because of the region’s aging infrastructure and some of the Democratic-controlled states inside PJM have chosen to shutter older, dirtier power plants.
For people outside PJM’s service territory, data centers are helping lower electricity bills. This is because a portion of every utility bill contains fees for maintaining and modernizing the electric grid. By bringing on these new massive customers, electric companies can make the data centers pay for grid costs (such as building new transmission and distribution lines) that would otherwise be paid by residential customers and small businesses.
Electricity rates can go up for a variety of other reasons. Some examples: As the price of natural gas rises, it can drive up the price of electricity produced from natural gas. Utilities sometimes must add fees to people’s power bills to recover costs for wildfires or to help people afford rooftop solar panels.
None of these factors has anything to do with data centers, but because they don’t drive the media narrative of backlash against data centers, they tend to be ignored.
CHRISTIAN JOSI
Miramar, Florida
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