Are You Paying For AI Data Center Growth?

As AI data centers multiply across the country, consumer advocates warn that the growing demand for electricity could lead to higher utility bills unless states require tech companies to cover infrastructure and grid expansion costs. KM Stock/Shutterstock

The last several years have seen battlelines drawn between customers burdened by exploding power bills, beleaguered utility companies, and the insatiable appetite of big AI companies for ever more electricity.

Fewer than half of the states in America have laws to protect consumers from the deluge of costs associated with bringing a new data center online. However, two deals by Google and Amazon to build data centers across I-70 from one another in rural Missouri may be the blueprint for the future.

The $25 Billion Google, Amazon – Ameren Deal

Amazon announced this week that it is building a $15 billion data center campus in New Florence, MO, about 76 miles west of St. Louis. Last month, Google announced a similar $10 billion proposal. Together, the two campuses will total 1,900 acres.

The significance of these deals is not just the boost to local tax revenue; it is also Amazon’s and Google’s commitment to pay all the costs of connecting to the grid and to make minimum monthly payments.

Google also announced a $20 million energy impact fund designated to lower power bills for Ameren customers near New Florence and counties around Kansas City, where Google plans to develop another data center. Similarly, Amazon has pledged $7 million to aid community services in Montgomery County, where New Florence is located.

And Their Hearts and Minds Will Follow

The hearts and minds of Google and Amazon may be in the right place, but a law passed last year in the Missouri legislature made sure their pocketbooks were as well.

Ameren’s Powering Missouri Growth Plan, approved by the Missouri Public Service Commission, was developed to comply with consumer protections in Senate Bill 4.

So far, 22 other states have similar laws in place, and another seven are considering such legislation.

Consumers in states without such legislation are vulnerable to rate hikes and more. Last year, utilities asked for a record $31 billion in rate hikes, more than double the year before, according to PowerLine.

Dr. Mark Mcnees, director of social and sustainable enterprises at Florida State University, takes a dim view of utilities seeking rate hikes to cover Data Center costs.

“What we are seeing right now is they’re socializing that risk and they a reaping the reward and it’s not capitalism,” Mcnees said in a recent Qwoted panel discussion.

A Real World Example

A case in point is the dramatic rise in consumer electricity costs posted by PJM Interconnection. It is the largest regional electricity grid operator in the United States, serving over 65 million people across 13 Midwest and Mid-Atlantic states and the District of Columbia.

PJM’s power prices jumped 75.5% in the first quarter of last year, according to a May report from independent watchdog Monitoring Analytics, LLC. That meant wholesale power costs went from $77.78 per megawatt-hour (MWh) to $136.53 per MWh. The Natural Resources Defense Council (NRDC) estimated that families served by PJM will see a $ 70-a-month increase in their power bills by 2028.

The Monitoring Analytics report blamed data centers for rate hikes. However, not everyone strictly agrees.

“I think you’re putting the focus on the wrong entities,” Ari Peskoe, director of Harvard Law School Electricity Law Initiative, told SavingAdvice. “It’s the utilities who are responsible for any contracts with data centers and developing the rates that data centers pay.”

Those contracts and rates have been a mixed bag.

“Different utilities are taking different approaches,” noted Pesko. “I would say a few of them are being proactive enough in trying to isolate the data center costs from everyone else’s bill, but the issue is certainly evolving. The basic idea is to require the data center to pay for the cost of the new infrastructure that’s being built to serve it.”

Large Load Tariffs

Arif Gasilov, partner, Natural Resources & Built Environment, thinks a good model for utility companies to follow has been found. The Edison Electric Institute’s May 2026 report on Large Load Projects and Tariffs details how utilities protect general consumers from paying for higher costs. Measures include: Long-term contracts, substantial collateral payments, and early termination fees.

“Oregon’s version, which I would personally call the fairest to customers,” notes Gasilov, “requires data centers to pay 100% of distribution upgrades, with minimum demand charges and a 1 cent/kWh surcharge above 100 MW that funds low-income energy programs.”

Growing Consumer Use

Since its introduction to the general public in 2022, AI has become a staple in many users’ lives. An iab Lab Tech review found that “the majority of consumers we surveyed have used AI tools, and 67% now engage with them daily or several times a week.”

We use AI for research, to summarize articles, help with shopping decisions, meal planning, homework, and, increasingly, in place of traditional web searches. Google, for instance, has seen queries reach an all-time high since launching its AI Mode in the United States last year.

A single AI prompt, on average, requires about 2.9 watt-hours of electricity. That is about 10 times the .03 watt-hours for a traditional search, according to the Brookings Institution. Data centers use tens of thousands of times more electricity.

How Data Centers Work

Communication and research, we send using digital devices, such as AI prompts, streaming media, texts, and email, are all routed through a data center. These centers are large, secure, climate-controlled warehouses containing vast numbers of computers and servers for data storage.

You have probably heard of the cloud and wondered where it is. The cloud is a virtual service that allows us to access information. Data centers are the physical entities that allow the cloud to function.

Straining the Grid

A lot of energy is required for data centers to function. Their rapid increase in number has become the dominant force driving electricity use to levels that are straining the power grid as never before, according to the U.S. Energy Information Administration.

A single AI-focused data center can consume as much energy as 100,000 households, according to a report in the MIT Technology Review.

There is only more to come. Brookings projects that electricity consumption from processing centers will rise by $6.7\%$ to $12\%$ over the next two years.

The $1.4 Trillion Super-Cycle

Investor-owned, regulated utility companies are shelling out an estimated $1.4 trillion over the next five years, according to PowerLines, an energy consumer group. Tech companies designate that expenditure, called the “super-cycle,” to cover the mounting costs of building more data centers, upgrading an aging power grid, and adapting to new energy sources.

“Investor-owned utilities are signaling a record-breaking wave of capital spending, and history shows that those plans are often a leading indicator of future utility rate increase requests,” says Charles Hua, founder and executive director of PowerLines.

Utility CEOs Poised for Big Payout

What may hike your utility bill could also hike utility executives’ incomes, according to a Reuters story published Tuesday. The news service reported:

“CEOs of the 15 largest U.S. power companies are sitting on nearly $1 billion in ‌stock-based pay, according to a Reuters analysis of regulatory disclosures, value that is poised to keep rising as their firms invest heavily to fix America’s electrical grid.”

Capital spending drives the value of publicly traded utility companies. The more a utility spends on assets, such as infrastructure, the greater its return.

One Way Commitment

The arrival of a data center can create financial stress on utility companies and their other customers, but so can its departure.

Utility companies usually issue bonds to finance the construction of new data center infrastructure. Basically, the utility sells bonds to investors, guaranteeing to repay the purchase price plus interest over time. Usually, the lifetime of these bonds is 30 years.

As long as the data center sticks around, the utility can collect enough revenue to pay off the bonds. But if the AI bubble pops and the data center goes out of business or moves out of the service area, the utility and its customers must pay bondholders.

Data Centers = Jobs – Not So Much

Amazon expects its data center to create hundreds of jobs. However, that is not the case historically, according to Gasilov.

“Data centers do not bring more long-term employment,” contends Gasilov. “The first Stargate data center in Abilene, Texas, took 6,400 workers to build, but permanent employment estimates range from 100 to 1,000 depending on which side you ask,” reports Gasilov. “In short, what is more realistic and backed by what we’re seeing is that it seems to be a short burst of contract work followed by a minimal number of W2 employees for the rest of the years of the center’s operations.”

Then There is Water

In addition to electricity, data centers use a massive amount of water to cool their servers. A large facility can use up to five million gallons a day, according to Nature Forward.

Water depletion and rising household costs have been major sources of community opposition to data centers in Georgia, Alabama, and the West. However, Missouri’s experience may be becoming the new normal.

As part of its deal with Ameren, Amazon will build water supply lines to serve its data center campus. Montgomery County’s water district will take over once the lines are complete.