AI Data Centers: Who Pays for the Power Boom?

Ahead of the November midterm elections, Congress is deadlocked over how much of the electricity bill for the artificial intelligence boom should land on ordinary households—and experts say there is no single, clean answer. A bipartisan bill to shield ratepayers stalled in the Senate for a second time this week, even as the cost of powering AI data centers keeps showing up in utility bills across the country.

The fight centers on a deceptively simple question: when a data center demands enormous amounts of electricity, who should pay for the new power lines, substations and generating capacity it requires? The answer, according to energy experts, varies by utility and state, is frequently hidden behind non-disclosure agreements, and is clouded by the fact that much of the grid infrastructure is shared.

A Bill Blocked Twice

The Ratepayer Protection Act, sponsored by Ohio Republican Sen. Jon Husted, passed the House overwhelmingly, 417-3, in September before lawmakers left Washington for the campaign trail, NPR reported. The bill would direct states to consider adopting federal standards aimed at ensuring the cost of electrical-grid upgrades prompted by data centers is carried by “large-load” customers rather than passed on to other ratepayers.

It is a voluntary measure—it would not require states to adopt any particular standard, only to begin considering new rules within one year and complete the process within two. That design is meant to codify portions of President Donald Trump’s voluntary Ratepayer Protection Pledge, which the White House expanded in July to more than 200 utilities, data center developers, cooperatives and states. The administration says the pledge now covers 80% of the power delivered to U.S. homes and businesses and protects 263 million Americans.

The Senate blocked the bill twice: first through a unanimous consent objection from Sen. Martin Heinrich, D-N.M., on Sept. 17, then through a cloture vote of 57-43 on Sept. 30—three short of the 60 needed. Four Democrats voted to advance it: Maggie Hassan of New Hampshire, Amy Klobuchar of Minnesota, and Georgia Sens. Jon Ossoff and Raphael Warnock.

Speaking on the Senate floor, Majority Leader John Thune, R-S.D., called the measure “common sense” and accused Democrats of playing politics. “Given the overwhelming support for this measure in the House, it’s difficult to conclude that Senate Democrats blocked this bill for any reason other than the desire to deny Republicans another win in an election year,” Thune said.

Senate Minority Leader Chuck Schumer, D-N.Y., countered that the bill was “toothless” because its protections are voluntary. “Senate Democrats want to make it mandatory for data centers to cover their own costs, by law, not by suggestion or hope or whim,” he said. Schumer is promoting the competing GRID Savings Act, authored by Heinrich, which would require large-load customers to pay for the transmission facilities needed to connect them to the grid.

Husted framed the vote as a missed chance to deliver relief. “This bill is the only path that we can take today that will lower electricity prices,” he said. “All we have to do in this chamber is say yes, and it will be on the president’s desk.”

How Much Are Ratepayers Actually Paying?

The question of what the AI buildout costs households has no universal answer. According to NPR, researchers and analysts point to a wide range of estimates. A Maryland Office of People’s Counsel analysis found that customers in that state pay roughly $168 to $216 more per year on electricity bills primarily because of the data center boom. PJM, the regional transmission organization that coordinates the grid across 13 states and the District of Columbia, has an independent market monitor that estimates data centers have cost its 67 million ratepayers about $29 billion over roughly the past two years.

“We’re talking tens to hundreds of millions of dollars of infrastructure that are being built by these local utilities,” said Connor Waldoch, co-founder and chief strategy officer at Grid Status, which tracks electricity-market data. “In many cases, it is just ultimately going to end up in customers’ bills.”

Ari Peskoe, director of the Harvard Electricity Law Initiative, told NPR that “everyone pays those costs” because they are spread across the region to every business and resident with an electricity meter. But a nationwide figure is impossible to pin down, he said, because “a lot of the data about how much particular data centers are paying is hidden behind non-disclosure agreements.”

The secrecy has fueled local backlash. A University of Mary Washington study found NDAs had been signed in 80% of Virginia localities with existing, approved or proposed data centers. In Ohio, where the debate has become especially sharp, a Bowling Green State University poll released in September found that 75% of Ohioans oppose a data center in their own community, 63% oppose them anywhere in the state, and 78% support a temporary ban on construction until more is known.

Why the Cost Is Hard to Pin Down

Part of the difficulty is apportioning shared infrastructure. Data center growth raises wholesale energy costs by increasing demand, which determines how much generating capacity utilities and grid operators must secure. There are also costs to build new power lines and substations. Determining how much of that serves data centers exclusively—and how much also benefits other customers—is contestable.

“It really depends on the scale of the upgrade and also how utilities are doing the accounting of that different share, whether it’s being used solely by the data centers or also being shared by other customers,” said Lucy Qiu, a professor at the University of Maryland School of Public Policy.

There is also the problem of building out in a hurry. The data center industry is moving fast and isn’t waiting for new power-generation technologies. To meet demand, utilities may need to rely on less efficient power plants, whose costs are passed on to consumers over time. And there is an optics problem: big customers like AI data centers pay less per kilowatt-hour than residential customers do—a volume discount that is politically uncomfortable when 70% of Americans say they worry data centers will raise their utility bills.

Not all recent price increases are linked to data centers, however. Qiu notes that fuel costs are a major factor and that some substations and power lines would have needed replacing anyway due to extreme weather. She adds that the AI boom “can accelerate the upgrade of the grid infrastructure” the country needs for electrification, and that grid reliability may actually improve near data centers because of the robust infrastructure those facilities require.

A Midterm Flashpoint in Ohio

The national policy fight has become inseparable from the Ohio Senate race, where Husted—appointed to fill the seat vacated by Vice President JD Vance—is in a toss-up reelection bid against Democrat Sherrod Brown, who lost his seat in 2024. Brown has made data centers a central campaign issue, arguing that Ohioans “should never be forced to subsidize the electricity costs of big corporations,” according to his campaign.

Newsweek reported that Brown has cast himself as a data center skeptic and that his campaign spokesperson, Lauren Chou, called Husted a “chief reason” Ohio has 226 data centers and “the face of data centers” in the state. Husted has defended his record, saying on a podcast that Americans who use digital products have “created the demand.” “When we look in the mirror, we are the problem,” he said.

The stakes extend well beyond Ohio. Only 20% of Americans believe data center construction is good for the country, according to a YouGov/Economist poll of 1,592 adults from Aug. 28-31, suggesting the issue could shape races across the country. Congress has yet to substantively address the impacts voters are angry about, and senators are now heading home to campaign.

What to Watch

With both the Ratepayer Protection Act and the GRID Savings Act stalled, the immediate path to federal action appears blocked until after the Nov. 3 midterms. The core dispute—whether protections should be voluntary or mandatory—remains unresolved, and it maps onto a broader partisan divide over regulation of the AI industry.

For ratepayers, the practical reality is likely to remain murky. As long as cost data stays locked behind NDAs and infrastructure is shared, experts say, the precise share of the AI bill that lands on household utility statements may be impossible to calculate—which is precisely what makes the political fight so potent.