Senators Elizabeth Warren, Chris Van Hollen, and Richard Blumenthal sent a letter to tech firms announcing an investigation “in light of alarming reports that tech companies are passing on the costs of building and operating their data centers to ordinary Americans as A.I. data centers’ energy usage has caused residential electricity bills to skyrocket in nearby communities.”
This comes despite a flurry of evidence showing that green energy mandates and other factors unrelated to data centers are the main drivers of price increases. This fact sheet provides evidence-based insights to counter these Senators’ claims.
Myth: Data Centers Use the Most Energy in the U.S.
Myth: Data Centers Increase Electricity Prices in the Long-Term
- Fact: Georgia Power recently announced plans to add 9,900 MW of power to the state’s grid, which will lower costs for each typical customer by $102 per year. The utility directly credited how “data centers are helping keep costs lower for all customers and supporting infrastructure investments that benefit the state’s entire electric grid” for enabling this expansion.
- Fact: The Lawrence Berkeley National Laboratory found that “state-level load growth in recent years (through 2024) has tended to reduce average retail electricity prices.”
- Fact: In many counties, data centers help reduce long-term electricity prices by sharing infrastructure costs.
- Fact: When a data center opens, it pays for its electricity usage, special assessments for grid connections, and proportional shares of upgrades, shrinking the cost burden on residential users for county-wide improvements such as replacing aging power lines or towers.
- Fact: Data centers sign power purchase agreements (PPAs) that guarantee payments years in advance, even if usage is lower than anticipated, enabling utilities to secure cheaper financing for repairs, upgrades, and expansions that benefit all customers.
- Fact: Data centers pay monthly for generation, transmission, distribution, overhead, repairs, and improvements, equivalent to residential users, plus additional special assessments for their connections and upgrades.
Myth: More Data Centers Equate to Higher Residential Bills
- Fact: States with high data center concentrations experience less significant price increases compared to those with few.
- Fact: Maine, which has very few data centers, had the nation’s highest year-over-year energy increase at 36%. Virginia, which has the most data centers, saw a negligible 3% increase in electricity bills.…
Myth: Green Energy Mandates Can’t Be Blamed for Rising Electricity Costs
- Fact: Regulatory barriers, green energy mandates, and plant closures driven by environmental policies are the primary contributors to higher energy prices—not data centers.
- Fact: A Goldman Sachs analysis attributes rising energy costs to coal plant retirements without viable alternatives in place.
- Fact: Electricity costs are nearly three times higher in states with the strictest renewable portfolio standards compared to those without, as noted in a Wall Street Journal analysis.
- Fact: Between 2021 and 2025, approximately 15,766 megawatts of coal-fired capacity—enough to power 13 million homes—were decommissioned without sufficient replacements, tightening supply and elevating costs.
- Fact: Treasury Secretary Scott Bessent highlighted how Democratic policies in states like New York and New Jersey prioritize ineffective green energy strategies, such as blocking pipelines from Pennsylvania’s gas reserves, contributing to rising electricity costs amid AI expansion.
- Fact: Higher power bills stem mostly from volatile natural gas prices and the costs utilities are passing on to customers to modernize the aging grid and rebuild power lines and substations damaged by wildfires in the West, hurricanes along the Gulf and Atlantic Coasts, and other extreme weather. Electricity markets are also beginning to feel the squeeze from an explosive growth in new users.
The AI Infrastructure Coalition (AIIC) brings together companies from every layer of the AI tech stack—from semiconductor manufacturers and energy providers to hyperscalers, datacenter operators, private equity, and AI model developers—to collectively shape the future of AI infrastructure policy and advance U.S. leadership in AI. AIIC supports policies that ignite American economic prosperity, create high-quality jobs, and fortify our nation’s security in the AI race against China.
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