Senators launched a probe Tuesday demanding that tech companies explain exactly how they plan to prevent data center projects from increasing electricity bills in communities where prices are already skyrocketing.
In letters to seven AI firms, Senators Elizabeth Warren (D-Mass.), Chris Van Hollen (D-Md.), and Richard Blumenthal (D-Conn.) cited a study estimating that “electricity prices have increased by as much as 267 percent in the past five years” in “areas located near significant data center activity.”
Prices increase, senators noted, when utility companies build out extra infrastructure to meet data centers’ energy demands—which can amount to one customer suddenly consuming as much power as an entire city. They also increase when demand for local power outweighs supply. In some cases, residents are blindsided by higher bills, not even realizing a data center project was approved, because tech companies seem intent on dodging backlash and frequently do not allow terms of deals to be publicly disclosed.
AI firms “ask public officials to sign non-disclosure agreements (NDAs) preventing them from sharing information with their constituents, operate through what appear to be shell companies to mask the real owner of the data center, and require that landowners sign NDAs as part of the land sale while telling them only that a ‘Fortune 100 company’ is planning an ‘industrial development’ seemingly in an attempt to hide the very existence of the data center,” senators wrote.
States like Virginia with the highest concentration of data centers could see average electricity prices increase by another 25 percent by 2030, senators noted. But price increases aren’t limited to the states allegedly striking shady deals with tech companies and greenlighting data center projects, they said. “Interconnected and interstate power grids can lead to a data center built in one state raising costs for residents of a neighboring state,” senators reported.