Electricity prices are surging, voters are growing angry, and the artificial intelligence industry’s data centers are increasingly a target for blame with U.S. mid-term elections on the horizon.
Residential utility bills rose 6% on average nationwide in August compared with the same period in the previous year, according to the U.S. Energy Information Administration.
The reasons for price increases are often complex and vary by region. But in at least three states with high concentrations of data centers, electric bills climbed much faster than the national average during that period. Prices, for example, surged by 13% in Virginia, 16% in Illinois and 12% in Ohio.
The tech companies and AI labs are building data centers that consume a gigawatt or more of electricity in some cases, equivalent to more than 800,000 homes, the size of a city essentially.
Virginia has the highest concentration of data centers in the world. Democrat Abigail Spanberger won the state’s recent governor’s race in a landslide by campaigning on cost of living. Spanberger put at least part of the blame for rising electricity prices on data centers, promising to make tech companies “pay their own way and their fair share” of the escalating costs.
The governor’s race could be a harbinger of political headwinds for the AI industry’s data center buildout with the mid-term elections just a year away and Democrats zeroing in on affordability as their central issue. In Washington, some Democratic senators are targeting the close relationship that President Donald Trump has developed with the leaders of the major tech companies and AI labs.
Sen. Richard Blumenthal of Connecticut and Sen. Bernie Sanders of Vermont took aim this week at what they described as the White House’s “sweetheart deals with Big Tech companies,” accusing the administration of failing to protect consumers from “being forced to subsidize the cost of data centers.”
“The techlash is real,” said Abraham Silverman, who served as general counsel for New Jersey’s public utility board from 2019 until 2023 under outgoing Democratic Gov. Phil Murphy.
“Data centers aren’t always great neighbors,” said Silverman, now a researcher at Johns Hopkins University. “They tend to be loud, they can be dirty and there’s a number of communities, particularly in places with really high concentrations of data centers, that just don’t want more data centers.”
Virginia, Ohio and Illinois
Looking at the top fives states for data centers can help sort out some of the politics of data centers from what is actually happening to electricity prices.
Virginia, Illinois and Ohio are among those states and are mostly served by the same grid operator, PJM Interconnection. PJM is the largest grid in the U.S., serving more than 65 million people across 13 states including New Jersey where Silverman advised the state utility board.
The PJM grid is facing a major imbalance between demand and supply. It holds auctions to secure electric capacity from power…
Read More: Electricity bills in states with the most data centers are surging
