Senators Count the Shady Ways Data Centers Pass Energy Costs on to Americans

upstart writes:

Senators demand Big Tech pay upfront for data center spikes in electricity bills:

Senators launched a probe Tuesday [December 16, 2025] 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.

Under fire for supposedly only pretending to care about keeping neighbors' costs low were Amazon, Google, Meta, Microsoft, Equinix, Digital Realty, and CoreWeave. Senators accused firms of paying "lip service," claiming that they would do everything in their power to avoid increasing residential electricity costs, while actively lobbying to pass billions in costs on to their neighbors.

For example, Amazon publicly claimed it would "make sure" it would cover costs so they wouldn't be passed on. But it's also a member of an industry lobbying group, the Data Center Coalition, that "has opposed state regulatory decisions requiring data center companies to pay a higher percentage of costs upfront," senators wrote. And Google made similar statements, despite having an executive who opposed a regulatory solution that would set data centers into their own "rate class"-and therefore responsible for grid improvement costs that could not be passed on to other customers-on the grounds that it was supposedly "discriminatory."

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