Ask an expert: Are data centers driving up my electricity bills?
According to a Penn State law professor, data center development is contributing to rising electricity demand and prices in Pennsylvania and across the U.S. These facilities consume vast amounts of electricity for operation and cooling, impacting residential power bills. Communities are encouraged to engage with state-level regulatory bodies and legislators to address these concerns.
Hannah Wiseman, a professor of law at Penn State Dickinson Law, explains that the increasing number of data centers, particularly hyperscale facilities that can consume as much electricity as a small city, are significantly driving up electricity demand and subsequently, prices, in Pennsylvania and other states. This rise is exacerbated by the substantial power requirements for cooling systems, which can account for up to 40% of a data center's total electricity use, and also consume millions of gallons of water daily.
Wiseman notes that utilities face increased expenditures to upgrade infrastructure and purchase wholesale electricity from the broader grid, costs that are then passed on to consumers. While Pennsylvania Governor Josh Shapiro has worked with grid operator PJM to cap wholesale prices in an effort to mitigate consumer price hikes, the expert warns that high demand and insufficient supply will likely still lead to higher rates.
To address these impacts, Wiseman advises communities and individuals to understand their electricity consumption related to online services and AI, and to actively participate in state-level regulatory decisions. She highlights that state public utility commissions oversee utilities and that numerous bills are currently proposed in state legislatures across the country, many aiming to require data centers to cover the costs of new infrastructure rather than having them spread among all consumers. Public engagement through e-filing, direct calls to legislators, and watching hearings online is encouraged.