Data Centers Driving Up Electric Bills Draw Congressional Attention

The government could convene energy utilities, regulators, and data center developers to determine how to prevent the large projects from raising Americans' energy bills, under a proposal in the U.S. House.

The Protecting Families From AI Data Center Energy Costs Act would require the Federal Energy Regulatory Commission (FERC) to gather government, utilities, data center providers, and others to determine how to protect homeowners from rising energy costs driven by data centers.

Congress is considering different legislation to combat the rising costs associated with large data center developments. More cities and states are examining and restricting these projects in their areas. Some have banned them outright.

Rep. Greg Landsman (D-OH) introduced the bill in December, and the House Energy and Commerce Committee has advanced it to a full committee markup. The bill now has 18 Democratic cosponsors.

“Costs are increasing in every aspect of people’s lives—adding to the affordability crisis. Residents and small businesses in states like Ohio, which is home to nearly 200 data centers, shouldn’t be footing the bill to support them," Landsman said when he introduced the bill. "There needs to be a plan to address this.”

Currently, there are more than 4,000 data centers throughout the country, with Virginia and Texas leading the way with at least 570 and 408 data centers, respectively.

Power hungry

Data centers have an outsized energy demand, and with hundreds under construction or planned, energy demands in the nation will increase.

Goldman Sachs estimated that data center power demand will more than double from 2025 to 2027. But only about 50% to 60% of data center capacity will come online due to delays and cancellations, it said.

Earlier this year, President Donald Trump called on data center developers to provide their own power for projects. The administration has taken a few steps, including financing large nuclear energy projects.

But the bill's sponsors, including Rep. Don Beyer (D-VA), argue the government hasn't moved fast enough to approve new power generation to build the capacity. And so, consumers' prices are going up.

“The rapid growth of data center construction to meet power demands from the proliferation of AI platforms is driving electricity prices up sharply in Virginia and across the country," Beyer said.

Under the proposal, FERC would bring together experts from the Department of Energy, energy utilities and transmission providers, state regulators, "large load" energy users like data center developers, and ratepayer advocates.

Their goal would be to develop strategies for how to allocate costs that come with large energy users.