AI comes home as consumer advocates warn data centers could drive up your electric bill

Consumer advocates are raising concerns that the massive energy demands of AI data centers could drive up electric bills for residential customers across the United States. The warning comes as utility companies grapple with unprecedented power consumption from artificial intelligence operations, which require vastly more energy than traditional computing due to their simultaneous processing of billions of calculations.

What you should know: AI’s energy consumption far exceeds traditional computing because of how the technology processes information.

• “The difference between what we are using for AI and what we are using for our regular computer is that it’s actually running everything at the same time,” explained tech expert Ahmed Banafa.
• This simultaneous processing approach requires AI algorithms to run billions of calculations concurrently, creating enormous power demands that traditional data centers weren’t designed to handle.

In plain English: Think of traditional computers like a single-tasking employee who handles one calculation at a time, while AI is like having thousands of employees all working on different parts of the same massive project simultaneously—requiring far more resources to keep everyone running.

The big picture: Consumer advocacy groups warn that utility companies may pass AI-related infrastructure costs directly to residential customers.

• “This is happening all across the country and the little guy is getting the short end of the stick,” said Jamie Court, president of Consumer Watchdog, a nonprofit consumer advocacy organization.
• The concern centers on whether utilities will absorb the costs of serving energy-intensive AI facilities or distribute those expenses across their entire customer base through rate increases.

PG&E’s response: California’s largest utility maintains that customer bills can remain stable despite growing AI energy demands.

• The company reports that average bills are expected to decrease this year and next, partly due to removing temporary wildfire safety costs that had been included in recent billing cycles.
• “We’re in a pretty unique position here in California in that we have a grid that is underutilized. So if we can increase the utilization rate, we see an opportunity to help put downward pressure on rates,” said PG&E spokesperson Paul Doherty.

Why experts remain skeptical: Critics argue that AI’s infrastructure requirements will inevitably drive up costs for all customers.

• Court emphasized that increased energy demand necessitates expensive infrastructure investments: “The fact is, it increases our energy demand needs. And that makes us do things like have to build more transmission lines, have to get in touch with more generation, go to a western regional grid. Those things are going to cost money.”
• Whether utilities can maintain stable rates while accommodating AI’s exponential energy growth remains an open question as the technology continues expanding nationwide.