By Mike W. Ray
Southwest Ledger
Research indicates the brunt of the increased cost of artificial intelligence that has spurred development of data centers and a surge in electricity consumption is falling not on major corporations, but on regular energy consumers – primarily residential and commercial customers.
As of July, the United States was home to more than 3,800 data centers, up from more than 3,600 in April. A majority of data centers are connected to the same electrical grids that power residential homes, commercial buildings and other structures.
Since Google’s MidAmerica data center opened in Pryor in 2011, multiple expansions have maintained its status as the company’s second largest data center in the U.S. A data center is slated to be built in Stillwater, and Polaris Technologies has opened a data center in Muskogee. In addition, a data center is planned in Chickasha’s Airport Industrial Park, but it is to be powered by a gas-fired electric generating plant serving only the data center and perhaps several businesses in the immediate vicinity.
Between 2024 and 2025, data center power usage accounted for $9 billion, or 174%, of increased power costs, according to a report in June by Monitoring Analytics, an external market monitor for PJM Interconnection.
PJM manages the electrical power grid and wholesale electric market for 13 states and Washington, D.C., and this spring, customers were told to expect an increase in their monthly electric bills of approximately $25 starting in June.
“The growth in data center load,” and anticipated future growth in data center load, “are unique and unprecedented and uncertain and require a different approach than simply asserting that it is just supply and demand,” the Monitoring Analytics report said.
Bitcoin computations, many AI models and the large companies that power them use vastly more energy than other kinds of computing. Training a single chatbot like ChatGPT uses approximately the same amount of energy as 100 homes over the course of a year, an AI founder told States Newsroom, a nonprofit news organization, earlier this year.
A paper by the Harvard Electricity Law Initiative and issued in March by Eliza Martin and Ari Peskoe explains how the public is paying the energy bills of some of the largest companies in the world. Amazon, Google, Meta, Microsoft, and other technology companies are looking to secure electricity for their new power-hungry data centers.
Peskoe, director of the Electricity Law Initiative, and Legal Fellow Martin, examined dozens of regulatory proceedings across the nation and found that data center infrastructure costs are finding their way into power bills – which benefits utilities that earn a return on those investments.
To provide energy to these new facilities, electric utilities are expanding their systems with new power plants and transmission lines. Because utilities profit by building infrastructure, serving data centers is a lucrative opportunity that is incentivizing utilities to offer attractive rates to Big Tech companies.
Matthew Horeled, vice president of Regulatory and Finance for Public Service Co. of Oklahoma, testified before the utility-regulating Corporation Commission that PSO has “a number of customers” who have indicated they will need “new large loads” of power in the near future. Those transactions with PSO “represent an additional 779 megawatts of load growth.”
Paul Demmy, resource planning lead for American Electric Power Service Corp., parent company of PSO, testified that the load growth will begin this year and “ramp up” year over year.
That testimony was presented during consideration of PSO’s application for pre-approval to immediately start charging the utility’s 580,000 ratepayers for the $730 million acquisition cost of the Green Country power plant at Jenks.
State regulator Kim David, chair of the Oklahoma Corporation Commission, justified her vote to approve PSO’s application by stating, “A huge amount of power will be needed [by PSO] in the near future,” mentioning the $4 billion aluminum smelter expected to be built at the Port of Inola as an example.
The Harvard paper uncovers how utilities are forcing ratepayers to fund discounted rates for data centers.
Martin and Peskoe explain that government-regulated utility rates “socialize” a utility’s costs of providing electricity service to the public. When a utility expands its system in anticipation of growing consumer demand, ratepayers share the costs of that expansion based on the premise that society benefits from growing electricity use.
But data centers are upending that long-standing model. The very same utility rate structures that have spread the costs of reliable power delivery for everyone are now forcing the public to pay for infrastructure designed to supply a handful of wealthy corporations.
The authors reviewed nearly 50 regulatory proceedings about utility rates for data centers. After describing how rate-setting processes can shift utility costs among ratepayers, the paper explains how rate structures, as well as secret contracts between utilities and data centers, could be transferring Big Tech’s energy costs to the public.