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   "Tech companies have paid lip service" - US government is asking AI giants    
   why data centers are leading to rising bills   
      
   Date:   
   Sun, 21 Dec 2025 20:30:00 +0000   
      
   Description:   
   US senators challenge tech giants over rising electricity bills as AI data   
   centers strain grids and shift infrastructure costs onto consumers.   
      
   FULL STORY   
      
   Three U.S. Democratic Senators - Elizabeth Warren, Chris Van Hollen, and   
   Richard Blumenthal - are pressing major technology firms to explain why   
   electricity bills continue to rise in regions packed with large data   
   facilities.    
      
   Their letters target companies deeply invested in cloud hosting and   
   large-scale artificial intelligence infrastructure.    
      
   The lawmakers argue that public assurances about absorbing power-related    
   costs do not align with what consumers are experiencing through higher    
   utility rates.   
      
   Tech firms under fire for power bill failures    
      
   "Tech companies have paid lip service in support of covering their data   
   centers' energy costs, but their actions have shown the opposite," the trio   
   wrote.    
      
   "When utilities expand their grid infrastructure, they incorporate the cost    
   of expansion into their utility rates, passing the extra costs onto their   
   customers," they added.    
      
   On the same day the letters became public, Amazon released a study it had   
   commissioned from Energy and Environmental Economics.  The report claims that   
   data center hosting facilities generate enough revenue for utilities to offset   
   the cost of serving them.  In some scenarios, the study suggests surplus   
   revenue could even benefit other ratepayers.   
      
   However, the analysis relies heavily on projections and modeled outcomes   
   rather than verified historical billing data.    
      
   There is little disagreement that modern data centers consume a large amount   
   of electricity. Facilities supporting AI workloads often require hundreds of   
   megawatts, with some approaching gigawatt-scale demand.   
      
   Many regional grids were not built for this level of sustained consumption,   
   forcing utilities to invest billions in new generation, transmission lines,   
   and local upgrades to keep servers online reliably.    
      
   According to the Senators, utility companies typically recover infrastructure   
   expansion costs by raising rates across their customer base. This means   
   residential and small business users absorb expenses tied to industrial-scale   
   computing projects.   
      
   Research cited in the letters points to electricity prices potentially rising   
   8% nationwide by 2030, with far steeper increases in data center-dense states   
   such as Virginia.    
      
   A recurring concern involves private contracts between utilities and   
   technology companies. Studies referenced by lawmakers indicate that many firms   
   successfully negotiate favorable rates while avoiding direct responsibility   
   for grid upgrades.   
      
   Confidentiality clauses prevent regulators and the public from clearly seeing   
   how costs are distributed. This lack of transparency makes it difficult to   
   reconcile corporate claims with documented increases in wholesale and retail   
   electricity prices.   
      
   "Contracts between data centers and utility companies that set electricity   
   prices and other terms are typically confidential," the Senators wrote.    
   "Tech companies searching for a site for a new data center reportedly use   
   hard-nosed tactics to achieve lower rates  and then [pressure] utilities to   
   give them favorable rates by suggesting they may build elsewhere instead."    
      
   Amazon maintains that its facilities help rather than harm ratepayers,    
   despite anecdotal evidence and regulatory records suggesting otherwise.    
      
   Some regions with substantial data center activity have reportedly seen   
   wholesale power prices rise sharply over recent years.    
      
   Projections about potential benefits remain difficult to square with current   
   billing trends, leaving open questions about who ultimately pays for the    
   rapid expansion of AI-driven infrastructure.    
      
   Via The Register    
      
   ======================================================================   
   Link to news story:   
   https://www.techradar.com/pro/tech-companies-have-paid-lip-service-us-governme   
   nt-is-asking-ai-giants-why-data-centers-are-leading-to-rising-bills   
      
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