Americans are dealing with a fresh challenge- rapid growth of artificial intelligence and the rising electricity costs due to data centres. As technology companies build more data centres to power AI tools, the demand for electricity is also shooting up, raising concerns about who will pay for the extra power infrastructure.
The US House of Representatives is expected to vote on bipartisan legislation on Wednesday that aims to protect households from higher electricity bills linked to data centre expansion, according to news agency Reuters. The vote comes as government officials nationwide are under pressure to take steps to prevent the soaring cost of data center power needs from being passed on to average households. The proposed 'Ratepayer Protection Act' would need state utility regulators to consider whether large electricity users, including data centres, should pay the additional costs of the infrastructure needed to serve them.
What is the Ratepayer Protection Act?
The bill was introduced by Representative Kathy Castor, a Democrat from Florida, and Representative Gabe Evans, a Republican from Colorado. The Ratepayer Protection Bill has received support from both the parties ahead of the highly-debated November midterm elections in the United States. It seeks ways to balance economic growth, grid reliability and consumer affordability.
According to a report by news agency Reuters, the legislation seeks to ensure that large data centres pay their fair share of the costs associated with expanding the electricity grid. It also aims to speed up the construction of the power infrastructure needed to support the growing AI industry.
House Democratic Leader Hakeem Jeffries backed the proposal, calling it an "appropriate step forward". However, he added that "more clearly needs to be done."
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Former Federal Energy Regulatory Commission member Allison Clements said the measure was not transformative, but sent an important message. "This particular ratepayer bill is really one relatively modest step in the right direction," Clements said. "It holds value in that it's signaling, should it pass on a bipartisan basis, that Congress continues to be aligned with the priorities of protecting customers in the face of all of this new needed investment and demand growth."
How data centres impact your electricity bill?
Data centers have been around for decades, but AI means we need more of them than ever.Data centers and gargantuan energy use have become so synonymous, that, while it’s true data centers consume a lot of energy and demand is rapidly increasing because of AI. In order to meet these increasing demands, data centres require, new power plants and grid upgrades, raising concerns about higher costs for households.
ANIData centers have been around for decades, but AI means we need more of them than ever
The proposed bill would require new data centres using at least 20 megawatts to cover the additional power infrastructure costs they create. Regulators could also charge them extra to help reduce other customers' bills.
Ari Peskoe, director of Harvard Law School's Electricity Law Initiative, highlighted the scale of the industry's growing power demand. "But I don't think we've seen growth that's comparable to data centers today, and I certainly don't know any industry whose electricity usage has captured so much political attention."
The bill would also give states more freedom to impose conditions on data centres, including requiring them to secure new power supplies or limit their electricity use.
What are technology companies saying?
Some industry representatives argue that the proposed rules could unfairly target data centres. One technology industry official described certain provisions as an "unprecedented level of discriminatory treatment" for a single industry, according to Axios.
Amazon energy policy director Craig Sundstrom said the bill "could unlock the investment needed to build new generation and transmission faster." The Data Center Coalition said it was reviewing the legislation. Microsoft, Google and Nvidia declined to comment, while Meta did not respond to a request for comment.
(With Reuters inputs)