As electricity costs rise, everyone wants data centers to pick up their tab. But how?

HARRISBURG, Pa. — As outrage spreads to power-hungry data centers, politicians from President Donald Trump to local lawmakers have found rare bipartisan agreement to insist that tech companies — not ordinary people — must foot the bill for the exorbitant amount of electricity required for artificial intelligence.

But maybe that’s where the deal ends.

The price of data center power has become deeply intertwined with concerns about the cost of living, a dominant issue in the upcoming midterm elections that will determine control of Congress and governors’ offices.

Some efforts to address this challenge may come too late, given rising energy costs. And even if tech giants pledge to pay their “fair share,” there is little consensus on what that means.

“’Fair sharing’ is a pretty flimsy term, and so it’s something the industry likes to say because ‘fair’ can mean different things to different people,” said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University.

That’s a change from last year, when states were scrambling to court massive data center projects and Trump ordered his administration to do everything it could to get them power. There is now a backlash as cities fight data center projects and some utilities’ electricity bills have risen rapidly.

Anger over the issue has already had electoral consequences, with Democrats ousting two Republicans from Georgia’s Utility Regulatory Commission in November.

“Voters already associate the experience of these facilities with their electricity costs and they will increasingly want to know how the government is going to handle that,” said Christopher Borick, a pollster and director of the Muhlenberg College Institute of Public Opinion.

Data centers are flourishing in the United States, as tech giants scramble to meet global demand for chatbots and other generative AI products that require large amounts of computing power to train and operate.

The buildings resemble giant warehouses, some dwarfing the footprints of factories and stadiums. Some need more electricity than a small town, more than any utility has ever provided to a single user, sparking a race to build more power plants.

Demand for electricity can have a ripple effect that drives up prices for everyone. For example, if utilities build more power plants or transmission lines to serve them, the cost can be spread among all ratepayers.

The concerns intersect with broader questions about the cost of living, as well as fears about the powerful influence of technology companies and the impact of artificial intelligence.

Trump continues to view artificial intelligence as a top economic and national security priority, although he appeared to acknowledge the backlash last month by posting on social media that data centers “must “pay their own way.”

At other times, he has brushed aside concerns, saying tech giants are building their own power plants, and Energy Secretary Chris Wright says data centers don’t inflate electricity bills — disputing what consumer advocates and independent analysts say.

Some states and utilities have begun to identify ways to pass costs onto data centers.

They required tech companies to buy electricity under long-term contracts, finance the power plants and transmission upgrades they need, and make large down payments in case they go bankrupt or later decide they don’t need as much electricity.

But it could be more complicated than that. These rules cannot solve the short-term problem of voracious demand for electricity outstripping the speed at which power plants are built, analysts say.

“What do you do when Big Tech, because of the very profitable nature of these data centers, can simply outbid Grandma for electricity in the short term? » Abe Silverman, former utility regulation lawyer and energy researcher at Johns Hopkins University. “That, I think, will be the real challenge.”

Some consumer advocates say tech companies’ fair share should also include the rising costs of electricity, grid equipment or natural gas driven by their demand.

In Oregon, which passed a law aimed at protecting small ratepayers from data center electricity costs, a consumer advocacy group is competing with the state’s largest utility, Portland General Electric, on its plan to do just that.

Meanwhile, consumer advocates in various states, including Indiana, Georgia and Missouri, warn that utilities could pass the cost of data center-based construction onto regular ratepayers in those states.

Utilities are committed to ensuring that electricity rates are fair. But in some places it may be too late.

For example, across the Mid-Atlantic grid territory from New Jersey to Illinois, consumer advocates and analysts have estimated that billions of dollars in rate increases would hit the bills of ordinary Americans because of data center demand.

Meanwhile, legislation is flowing through Congress and states to regulate data centers.

Democrats’ bills in Congress are awaiting Republican cosponsors, while lawmakers in a number of states are proposing moratoriums on new data centers, crafting rules for regulators to protect regular taxpayers and targeting data center tax breaks and utility profits.

Governors – including those who have worked to recruit data centers to their states – are speaking out increasingly harshly.

Arizona Gov. Katie Hobbs, a Democrat running for reelection this year, wants to impose a penny-per-gallon water fee on data centers and eliminate the sales tax exemption that most states offer data centers. She called it a $38 million “corporate giveaway.”

“It’s time we make sure the booming data center industry benefits the people of our state, rather than the other way around,” she said in her State of the State address.

Energy costs are expected to continue to rise in 2026.

Washington Republicans point the finger at the state’s liberal energy policies that favor renewable energy, suggesting they have driven up transportation costs and weakened supplies by blocking fossil fuels.

“Americans aren’t paying higher prices because of data centers. There’s an impression, and I understand that impression, but it’s not really true,” Wright, Trump’s energy secretary, said at a news conference earlier this month.

The struggle to assign responsibility was on display last week during a four-hour U.S. House subcommittee hearing with members of the Federal Energy Regulatory Commission.

Republicans encouraged FERC members to accelerate pipeline construction while Democrats defended renewable energy and urged FERC to limit utility profits and protect residential ratepayers from data center costs.

FERC Chair Laura Swett told Rep. Greg Landsman, D-Ohio, that she believes data center operators are willing to cover their costs and understand that it is important to have community support.

“That hasn’t been our experience,” Landsman responded, saying projects in his district take tax breaks, bypass community opposition and cost people money. “Ultimately, I think we have to get to a point where they pay for everything.”

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Follow Marc Levy on X at: https://x.com/timelywriter