Rhode Island Energy Rates and AI Data Centers: The Record
A new report from Groundwork Collaborative warns that AI data centers could increase household electricity costs, prompting scrutiny of Rhode Island's proposed winter rate hike. While Rhode Island Energy's rate filing does not attribute the increase to data centers, state lawmakers failed to pass a bill that would have required large data centers to cover their own grid costs. Meanwhile, the town of Smithfield has adopted a zoning amendment restricting data centers.
A new report from Groundwork Collaborative, "The Hidden Costs of AI for American Households," warns that the expansion of artificial intelligence data centers could shift grid upgrade and demand costs onto ordinary consumers. This national warning comes as Rhode Island Energy proposes a significant increase to its Last Resort Service rate, from 11.092 to 17.029 cents per kilowatt-hour, affecting most residential customers this winter.
Rhode Island Energy attributes its proposed rate hike to factors like higher ISO New England costs, rising Renewable Energy Standard requirements, and volatile natural gas prices, notably omitting data centers from its explanation. The Public Utilities Commission held hearings on the proposed rate, which the Division of Public Utilities and Carriers recommended approving. Governor Dan McKee has also directed the Office of Energy Resources to seek $28 million in Regional Greenhouse Gas Initiative funds for residential bill credits to alleviate already high power prices in the state.
State lawmakers considered Bill S2776 (and House version H7331) this year, which would have mandated data centers of 50 megawatts or more to bear their own electric-system costs, preventing them from being passed to residential and non-data-center commercial customers. However, both versions of the bill were held for further study by the Senate Commerce Committee and the House, effectively stalling the legislation.
Locally, the town of Smithfield has already taken action. After a proposed business park floated a data center as a potential tenant, the Smithfield Town Council adopted a zoning amendment making data centers "not permitted in every zoning district." This action was taken despite ISO New England's large-load forecast indicating no immediate data center projects exceeding 20 megawatts in Rhode Island.