Data Centers Are Driving Up Your Electricity Costs (substack.perfectunion.us)

Big Tech’s sprint to build AI-ready data centers is driving a sharp rise in electricity demand and higher utility bills for ordinary consumers. The industry is projected to spend about $475 billion on data centers this year (roughly a 45% increase year-over-year), and facilities today account for ~4% of U.S. electricity use — a share analysts expect to roughly triple within three years. In regional capacity markets like PJM, surging data-center load helped trigger record price spikes (one capacity auction jump of ~800%), and an independent PJM monitor attributes roughly $9.3 billion in added costs to ratepayers to serve these new loads. Technically, AI training centers are often planned at gigawatt scale (a single gigawatt comparable to a medium nuclear plant), creating concentrated, multi-gigawatt “campuses” that strain existing generation and delivery infrastructure. Utilities and tech firms strike confidential deals — including long-term, partial-payment arrangements — that reduce costs for corporations while socializing grid upgrades across all ratepayers (examples include multi‑billion dollar new plants where tech covers only part of the bill). The result is a misaligned incentive structure: rapid, energy‑intensive AI deployment without transparent regulatory oversight increases systemic grid investment, price volatility, and policy risk, highlighting an urgent need for clearer rules on cost allocation, public input, and coordinated supply-side planning.