(Oil Price)– Power utilities in the United States have applied for permission to raise electricity prices, with a demand surge from AI data centers suggested as the reason, the Financial Times reported today, citing data from PowerLines, an energy affordability advocacy.
In the first half of this year, U.S. power utilities applied for price hikes of a total $29 billion, the FT said, adding this represented a 142% increase on the first half of 2024. The publication also cited a forecast from BloombergNEF that said electricity consumption was set to more than double over the next ten years because of power-hungry AI data centers.
“What we’re… seeing is a deer-in-headlights dynamic,” PowerLines executive director Charles Hua said, as quoted by the FT. “A lot of states don’t have a playbook for how they can meet rising [data centre] demand while balancing affordability and utility bills.”
The problem of AI data centers’ energy consumption has been drawing more and more attention as the AI race heats up and data centers proliferate. Indeed, the problem has become so pressing in some countries that they have set limits on the number of data centers that can be built there.
Ireland is a case in point: the country encouraged the construction of data centers until the size of their electricity demand made itself felt, prompting fears of electricity shortages that eventually led to a moratorium on new data center construction until 2028.
The whole AI data center issue also raises the question of who should shoulder the financial burden of AI proliferation. Consumer advocacy groups have argued that it should not be household consumers who pick up the tab so the U.S. can be leader in AI. Utilities and regulators also seem to think this way because they are placing a greater financial burden on large industrial consumers, charging them if their demand for electricity is deemed excessive.
By Irina Slav for Oilprice.com
