- US senators blame big tech companies for forcing households to pay rising energy bills
- Data centers consume hundreds of megawatts, placing significant strain on regional power grids.
- Private contracts hide which companies are actually paying for capacity expansion
Three Democratic U.S. senators—Elizabeth Warren, Chris Van Hollen and Richard Blumenthal—are pressing big tech companies to explain why energy bills continue to rise in regions filled with large data processing facilities.
Their letters are aimed at companies deeply invested in cloud hosting and large-scale artificial intelligence infrastructure.
Lawmakers say government assurances about covering energy costs don't match what consumers are experiencing due to higher utility rates.
Tech companies under fire for failing to meet energy bills
“Technology companies have paid lip service to covering energy costs in their data centers, but their actions have shown otherwise,” the trio wrote.
“When utilities expand their network infrastructure, they include the cost of the expansion in their utility rates, passing on the additional costs to their customers,” they added.
On the same day, the letters became public. Amazon published a study commissioned by the journal Energy and Environmental Economics.
The report claims that data center Hosted capacity generates enough revenue for utilities to offset the cost of maintaining it.
In some scenarios, the study suggests that excess revenue could even benefit other taxpayers.
However, the analysis relies heavily on forecasts and simulated results rather than verified historical account data.
Few people disagree that modern data centers consume large amounts of electricity.
Facilities supporting artificial intelligence workloads often require hundreds of megawatts, with some demands approaching gigawatts.
Many regional networks were not built for this level of sustainable consumption, forcing utilities to invest billions in new generation, transmission lines and local upgrades to maintain servers online securely.
Utility companies typically recoup the costs of expanding infrastructure by raising rates for their customer base, the senators said.
This means that residential and small business users absorb the costs associated with industrial-scale computer projects.
Studies cited in the letters indicate that electricity prices will potentially rise 8% nationwide by 2030, with much steeper increases occurring in states with more data centers, such as Virginia.
An ongoing problem involves private contracts between utilities and technology companies.
Research cited by lawmakers shows that many firms successfully negotiate favorable rates while avoiding direct responsibility for network upgrades.
Confidentiality provisions prevent regulators and the public from clearly seeing how costs are allocated.
The lack of transparency makes it difficult to reconcile corporate claims with documented increases in wholesale and retail electricity prices.
“Contracts between data centers and utility companies that set electricity prices and other terms are typically confidential,” the senators wrote.
“Tech companies looking for a new data center site are reportedly using hardball tactics to negotiate lower rates… and then [pressure] utilities to offer them favorable rates by offering to build elsewhere instead.”
Amazon maintains that its facilities help, not harm, taxpayers, despite anecdotal evidence and regulations suggesting 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 reconcile with current billing trends, leaving open questions about who will ultimately pay for the rapid expansion of AI-based infrastructure.
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