Trump's AI Push Clashes with Clean Energy Cuts, Raising Concerns Over Data Center Boom and Electricity Costs

How Trump's war on clean energy is making AI a bigger polluter

Justine Calma is a senior science reporter covering energy and the environment with more than a decade of experience. She is also the host of Hell or High Water: When Disaster Hits Home, a podcast from Vox Media and Audible Originals. At an AI and fossil fuel lovefest in Pittsburgh, Pennsylvania last week, President Donald Trump -- flanked by cabinet members and executives from major tech and energy giants like Google and ExxonMobil -- said that "the most important man of the day" was Environmental Protection Agency head Lee Zeldin. "He's gonna get you a permit for the largest electric producing plant in the world in about a week, would you say?" Trump said to chuckles in the audience. Later that week, the Trump administration exempted coal-fired power plants, facilities that make chemicals for semiconductor manufacturing, and certain other industrial sites from Biden-era air pollution regulations. If Trump has his way, the next generation of data centers will run dirtier than the last. It isn't enough to kill renewables and pave the way for more coal and gas plants to power energy-hungry AI data centers. Trump is also obsessed with tossing out environmental protections. "It costs much more to do things environmentally clean," Trump claimed in an interview with Joe Rogan in October 2024. Upon his appointment to head the EPA (or, rather, run it into the ground), Zeldin said that he would be focused on "unleash[ing] US energy dominance" and "mak[ing] America the AI capital of the world." The EPA announced thousands of layoffs on on July 18th, gutting its research and development arm. At the Pennsylvania Energy and Innovation Summit, Trump attempted to take credit for private investments totaling around $36 billion for data center projects and $56 million for new energy infrastructure. The ceremony itself was mostly pomp and circumstance, but it's telling that the Trump administration says it wants to make Pennsylvania a new hub for AI data centers. It's a swing state that Republicans are eager to move into their column, but it's also a major coal and gas producer. Sitting atop a major gas reserve, fracking in Pennsylvania (as well as Texas) helped usher in the "shale revolution" in the 2000s that made the US the world's leading gas producer. That was supposed to start changing under former President Joe Biden's direction. He set a goal for the US to get all its electricity from carbon pollution-free sources by 2035. And in 2022, he signed the Inflation Reduction Act, which was full of tax incentives to make it cheaper to build out new solar and wind farms, as well as other carbon-free energy sources. If it had stayed intact, the law was expected to reduce US greenhouse gas emissions by around 40 percent this decade. The law came at a crucial time for tech companies, which were expanding data centers as the AI arms race picked up steam. Electricity demand in the US is rising for the first time in more than a decade, thanks in large part to energy-hungry data centers. Google, Amazon, Microsoft, Meta, and other tech giants all have their own climate goals, pledging to shrink their carbon footprints by supporting renewable energy projects. But Trump is making it harder to build those projects in the US. Republicans voted to wind down Biden-era tax incentives for solar and wind energy in the big spending bill they passed this month. The bill will likely decrease electricity generation capacity in 2035 by 340 GW, according to one analysis, with the vast majority of losses coming from solar and wind farms that will no longer get built. All these new data centers still need to get their electricity from somewhere. "They won't be powered by wind," Trump said during the summit, repeating misleading talking points about renewable energy that have become a cornerstone of new climate denial. He signed an executive order in April, directing the Commerce, Energy, and Interior Departments to study "where coal-powered infrastructure is available and suitable for supporting AI data centers." Trump, backed by fossil fuel donors, campaigned on a promise to "drill, baby, drill" -- a slogan that he doubled down on again at the event. He also referenced the Homer City Generating Station, an old coal plant that's reopening as a gas plant that will power a new data center. The deals announced at the summit include Enbridge investing $1 billion to expand its gas pipelines into Pennsylvania and Equinor spending $1.6 billion to "boost natural gas production at Equinor's Pennsylvania facilities and explore opportunities to link gas to flexible power generation for data centers." Data centers are a "main driver" for a boom in new gas pipelines and power plants in the Southeast, according to a January report from the Institute for Energy Economics and Financial Analysis (IEEFA). The Southeast is home to "data center alley," a hub in Virginia through which around 70 percent of the world's internet traffic flows through. Even if AI models become more efficient over time, the amount of electricity they're currently projected to demand could lock communities across the US into prolonged reliance on fossil fuels as utilities build out new gas infrastructure. Zeldin's job now is essentially to remove any regulatory hurdles that might slow down that growth. From his first day in office, "it was clear that EPA would have a major hand in permitting reform to cut down barriers that have acted as a roadblock so we can bolster the growth of AI," as Zeldin wrote in a Fox News op-ed last week. "A company looking to build an industrial facility or a power plant should be able to build what it can before obtaining an emissions permit," he added. And after moving to roll back pollution regulations for power plants, the Trump administration is now reportedly working on a rule that would undo the 2009 "endangerment finding" that allows the EPA to regulate greenhouse gas emissions under the Clean Air Act. Zeldin also writes that when it comes to Clean Air Act permits for polluters it considers "minor emitters," the EPA will only meet "minimum requirements for public participation." An AI Action Plan that the White House dropped on July 23rd proposes creating new categorical exclusions for data center-related projects from the National Environmental Policy Act (NEPA), a sunshine law that mandates input from local communities on major federal projects. The plan directs agencies to identify federal lands for the "large-scale development" of data centers and power generation. There are other factors at play that could derail Trump's fossil-fueled agenda, including a backlog for gas turbines in high demand. Solar and wind farms are still generally faster to build and a more affordable source of new electricity than coal or gas, and we could see some developers rush to complete projects before Biden-era tax credits fully disappear. One early bright spot for renewables was the fact that data centers used to train AI are theoretically easier to build close to far-flung wind and solar projects. Unlike other data centers, they don't need to be built near population centers to reduce latency. They could also theoretically time their operations to match the ebb and flow of electricity generation when the sun shines and winds blow. But so far, things are shaping up differently in the real world. "It's just a race to get connected as quickly as possible," says Nathalie Limandibhratha, senior associate US power at BloombergNEF. Data center developers are also concerned that if they build facilities specifically to train AI closer to renewable energy, they could be left with stranded assets down the road. They'd rather keep building data centers close to population centers where they can repurpose the facility for other uses if needed. They also get more bang for their buck running 24/7, so data centers are leaning toward around-the-clock electricity generation from gas and nuclear energy (and nuclear energy has more bipartisan support than other sources of carbon-free energy). "There's no question right now that AI is driving greater fossil fuel use in the United States and really setting us back in terms of climate change," says Cathy Kunkel, an energy consultant at IEEFA. Tech giants Google and Amazon made announcements coinciding with the Pennsylvania summit committing to purchasing hydropower and nuclear energy, respectively. But their most recent sustainability reports show that their greenhouse gas pollution is still growing, taking them further away from their climate goals of reaching net zero emissions. "If [tech companies] wanted to meet their sustainability goals, they could do so," Kunkel says. "They're getting a free pass, obviously, from the Trump administration."

Trump's AI plan calls for massive data centers. Here's how it may affect energy in the U.S.

President Donald Trump's plan to boost artificial intelligence and build data centers across the U.S. could speed up a building boom that was already expected to strain the nation's ability to power it. The White House released the "AI Action Plan" Wednesday, vowing to expedite permitting for construction of energy-intensive data centers as it looks to make the country a leader in a business that tech companies and others are pouring billions of dollars into. The plan says to combat "radical climate dogma," a number of restrictions -- including clean air and water laws -- could be lifted, aligning with Trump's "American energy dominance" agenda and his efforts to undercut clean energy. Here's what you need to know. What AI means for the environment Massive amounts of electricity are needed to support the complex servers, equipment and more for AI. Electricity demand from data centers worldwide is set to more than double by 2030, to slightly more than the entire electricity consumption of Japan today, the International Energy Agency said earlier this year. In many cases, that electricity may come from burning coal or natural gas. These fossil fuels emit planet-warming greenhouse gas emissions, including carbon dioxide and methane. This in turn is tied to extreme weather events that are becoming more severe, frequent and costly. The data centers used to fuel AI also need a tremendous amount of water to keep cool. That means they can strain water sources in areas that may have little to spare. What Big Tech is saying and doing about finding all that power Typically, tech giants, up-and-comers and other developers try to keep an existing power plant online to meet demand, experts say, and most existing power plants in the U.S. are still producing electricity using fossil fuels -- most often natural gas. In certain areas of the U.S., a combination of renewables and energy storage in the form of batteries are coming online. But tapping into nuclear power is especially of interest as a way to reduce data center-induced emissions while still meeting demand and staying competitive. Amazon said last month it would spend $20 billion on data center sites in Pennsylvania, including one alongside a nuclear power plant. The investment allows Amazon to plug right into the plant, a scrutinized but faster approach for the company's development timeline. Meta recently signed a deal to secure nuclear power to meet its computing needs. Microsoft plans to buy energy from the Three Mile Island nuclear power plant, and Google previously signed a contract to purchase it from multiple small modular reactors in the works. What's at stake in the kind of energy that powers data centers Data centers are often built where electricity is cheapest, and often, that's not from renewables. And sometimes data centers are cited as a reason to extend the lives of traditional, fossil-fuel-burning power plants. But just this week, United Nations Secretary-General António Guterres called on the world's largest tech players to fuel their data center needs entirely with renewables by 2030. It's necessary to use fewer fossil fuels, he said. Experts say it's possible for developers, investors and the tech industry to decarbonize. However, though industry can do a lot with clean energy, the emerging demands are so big that it can't be clean energy alone, said University of Pennsylvania engineering professor Benjamin Lee. More generative AI, ChatGPT and massive data centers means "relying on wind and solar alone with batteries becomes really, really expensive," Lee added, hence the attention on natural gas, but also nuclear. What does AI growth mean for my electricity bills? Regardless of what powers AI, the simple law of supply and demand makes it all but certain that costs for consumers will rise. New data center projects might require both new energy generation and existing generation. Developers might also invest in batteries or other infrastructure like transmission lines. All of this costs money, and it needs to be paid for from somewhere. "In a lot of places in the U.S., they are seeing that rates are going up because utilities are making these moves to try to plan," said Amanda Smith, a senior scientist at research organization Project Drawdown. "They're planning transmission infrastructure, new power plants for the growth and the load that's projected, which is what we want them to do," she added. "But we as ratepayers will wind up seeing rates go up to cover that." ___ Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at [email protected]. ___ Read more of AP's climate coverage at http://www.apnews.com/climate-and-environment ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Trump's mega bill blasted by Washington leaders: Clean energy cuts threaten AI boom, hike costs

As energy demand spikes due to AI-driven data center expansions and the shift to electrification of transportation and other sectors, a sweeping bill signed this month by President Trump cuts resources for deploying renewable power, Washington state leaders said Friday. Washington Sen. Patty Murray convened a roundtable in Seattle on Friday to highlight the potential energy impacts of the "Big Beautiful Bill" and issue a call to action. She warned of rising utility costs for businesses and residents and lost jobs in the energy sector. "It's going to set us back in terms of our access to clean energy," Murray said. "It's so important that people know why this is coming and that we continue to raise our voices to fight back." Joe Nguyen, director of the state's Department of Commerce, was blunt in his criticism of the bill in a GeekWire interview following the roundtable. "This is a direct attack on tech," Nguyen said. "Without clean energy, we don't have technology." That's particularly true, he added, as companies such as Amazon and Microsoft are building out capacity to meet AI demands. The Pacific Northwest is already home to numerous data center facilities, with plans to build more. In Washington alone, the Republican-backed bill could decrease electric capacity by 18 gigawatts over the next decade -- or the equivalent of two Seattles' worth of energy -- said Gregg Small, executive director of Climate Solutions, speaking at the event. The legislation repeals tax cuts for renewable power efforts including wind and solar installations that were included in the Democrats' 2022 Inflation Reduction Act. At the same time, the GOP measure bolsters support for fossil fuel power. President Trump staunchly defends the nixing of benefits for wind and solar, calling the intermittent power sources "unreliable," and even some critics of the president acknowledge that tax cuts for renewable power should phase out over time. Others say the support makes sense to get new energy deployed as quickly as possible. Renewable power made up 93% of the U.S. energy capacity that came online last year. "Even if you're pro-fossil fuels, pro-coal, that is very expensive and it takes a long time to build. And also, the market is not demanding that right now," Nguyen told GeekWire. The data center tech giants -- also called hyperscalers -- are seeking clean power sources given that they've set ambitious goals for shrinking their carbon impacts. The AI boom is making it increasingly difficult to reach their targets, with Microsoft and Amazon both reporting rising carbon emissions. At the same time, Trump this week announced his "AI Action Plan" to accelerate data center growth in the U.S. and support America's leadership in AI. Clean energy advocates say there's a disconnect between those ambitions and policy that limits options for new power. "For us to be leaders in that [AI] space, it requires hyperscalers. It requires energy for those hyperscalers," Nguyen said. "So limiting the amount of energy we can produce is counterintuitive in terms of trying to be a dominant player in the AI space."

Here's who's paying for the explosion in AI and cloud computing

The data centers required for Big Tech are driving up electricity demand -- and prices. This summer, across a vast stretch of the eastern United States, monthly home electric bills jumped. In Trenton, New Jersey, the bill for a typical home rose $26. In Philadelphia, it increased about $17. In Pittsburgh, it went up $10. And in Columbus, Ohio, it spiked $27. Few customers were happy, of course, but even fewer knew exactly why the rates had climbed so quickly. "I never know why it goes up," said Vicki Miller, a retired secretary in Columbus. "But I can adjust the thermostat to save money -- I freeze in the winter and roast in the summer." This time around, though, it is possible to trace the price hikes in these cities to a specific source: the boom in data centers, those large warehouses of technology that support artificial intelligence, cloud computing and other Big Tech wonders. They consume huge amounts of electricity, and, as they proliferate, the surging demand for electricity has driven up prices for millions of people, including residential customers who may not ever use AI or cloud computing. In Columbus, for example, households on the standard plan of the local utility began paying about $20 more a month as of June -- or $240 a year -- because of the demand from data centers, according to a calculation based on figures from an independent monitor overseeing the region's energy auctions and the local utility, AEP Ohio. The ranks of the companies building the data centers -- Google, Meta, Microsoft and Amazon -- include some of the nation's biggest and most prosperous companies, and many affected residents resent having to pay more because of the tech companies' rising electricity demand. (Amazon founder Jeff Bezos owns The Washington Post.) "It's definitely not fair," said Alicia Tolbert of Columbus. She does merchandising for department stores, and her husband is a truck driver. "I really can't afford it." "The Big Tech companies suck up the electricity, and we end up paying higher prices," said Carrie Killingsworth, who works in financial services. "I'm not comfortable with average customers subsidizing billion-dollar companies." As data centers pop up across the U.S., energy experts fear their growing needs for power will outstrip supply and the prices will spike for everyone. For years, they have supported an array of e-commerce sites, social media and online video platforms, and the addition of AI applications is now boosting their power usage. "We are seeing every region of the country experience really significant data center load growth," said Abe Silverman, a nonresident research scholar focused on energy markets at Johns Hopkins University. "It's putting enormous upward pressure on prices, both for transmission and for generation." Earlier this month, energy regulators in Ohio ruled that data centers must pay more for the upgrades to the grid needed to serve data centers, overruling the objections of the tech companies, who said they were being singled out unfairly. In an emailed statement afterward, industry group the Data Center Coalition said that it was "very disappointed" in the decision. In a statement for this story, the Data Center Coalition said the industry "is committed to paying its full cost of service for the energy it uses." The markets for electricity are complex, and blaming one factor or another for residential price hikes can be complicated -- but not when it comes to data centers and this summer's rising home bills in several cities. Take Columbus. In announcing that the average residential bill would rise this year by about $27 a month, the local utility AEP indicated that the increase was due to how much the company had to pay for "capacity" -- that is, how much AEP had to pay to make sure the utility had enough power available to handle days of peak demand. The price for capacity is set every year during an auction in which utilities spanning 13 states and D.C. bid on the capacity generated by power companies. Last year, capacity prices in this auction rose a staggering 833 percent, and those increases are flowing into residential bills in the affected states. Although it was not initially clear why the capacity price rose so quickly, a little-noticed report issued in June identified the cause. According to the independent monitor hired to analyze the electricity market known as PJM, about three-quarters of the jump stemmed from the demand from existing and planned data centers. "There has been a paradigm shift in the market," Joseph Bowring, the author of the independent monitor's report, said in an interview. "These data centers could overwhelm the grid. The system cannot go on this way." Indeed, this year's auction, which concluded earlier this month, increased capacity prices yet again -- by about 22 percent. This increase does not mean residential bills will automatically jump by that amount, however, because the capacity prices are just one portion of an electric bill, and in Ohio and some other states, residents typically can choose from a number of electricity providers. Generally speaking, though, the recent increase is passed through to customers and will tend to push residential bills upward in the 13 states where utilities participate in the capacity market: Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. As AI and other innovations continue to dazzle the public and become an increasingly important part of the economy, the data center boom has spread across the United States. Politicians and tech backers, moreover, have touted the facilities as a source of jobs, and several states have offered tax breaks to attract the facilities. Virginia, for example, is home to more data centers than any other state and has offered an exemption to the state's retail sales and use tax to attract large-scale data centers. The exemption allows data centers and their tenants to purchase computers and other equipment, such as servers, without paying sales tax. Ohio also offers data centers a sales tax exemption. "Data centers are the essential digital infrastructure behind every online purchase, every telehealth appointment, every online news article and every digital classroom," the Data Center Coalition's vice president of energy, Aaron Tinjum, said in a statement. "Data centers enable the essential services and cutting-edge technologies that drive our economy and enhance our quality of life, ensuring that our homes, businesses, schools, hospitals, manufacturing facilities and government units operate smoothly and efficiently." Even some of the residents affected by the rising electricity prices look favorably on the data centers. Dan Longerbone, a bus driver in the Columbus area, said the rising costs have led him to be very careful about his electricity use -- he's installed LED lights, and in the summer, he turns up the thermostat. Yet he values the economic benefits of the data centers. "They do bring jobs," he said of those he's seen in the area. "They don't hurt anybody. They just sit by themselves. They do their thing." The data centers, however, often are rising in quiet rural or exurban areas, where neighbors complain of the noise and of their water demands. With the increased demand for energy, the rise in power plants is expected to increase carbon emissions and climate risks. As the data centers push up electricity bills, however, their proliferation seems likely to anger an even larger swath of the general public, even if many are unaware of their own role in creating more demand for electricity. While AI applications like ChatGPT are quick and easy to use, even simple AI tasks can require large amounts of electricity. For example, generating a high-definition image using an AI model takes as much energy as charging a smartphone to halfway, according to a study by researchers at Hugging Face, a tech platform for AI, and Carnegie Mellon University. People using the AI apps don't realize how much energy they require, said Sasha Luccioni, one of the researchers. "There is a disconnect," she said. "We talk about 'the cloud' as if it were immaterial. People using these applications don't imagine a data center -- a four-story building as big as a football field."

If you ask ChatGPT why your energy bill is higher, it should probably blame itself

Hate to be a 'Debbie Downer' but all those prompts we're using to make action figures, Ghibli memes, and the countless less exciting life and business prompts we're stuffing into ChatGPT and other popular generative AI systems are coming at a cost, and one that may be landing on our doorsteps. Don't get me wrong, I'm a huge fan of AI as I think it's the first technology in a generation to have truly society-altering implications but, if you're like me, you've been reading for some time about the ultra-high energy costs associated with Large Language Models (LLMs), especially trianing them, which according to the IEEE, "involves thousands of graphics processing units (GPUs) running continuously for months." AI model training is resource-intensive. Compared to traditional programming, it's like the difference between playing checkers and interdimensional chess against all the galaxies in the Star Trek universe. The number of parameters these systems examine to learn the essence of something, so they can instantly recognize a dog or a tree, because the models understand what makes up a dog or a tree, is, in human terms, almost inconceivable. AI understanding is so much more complex than pattern matching. And not only do these models need to understand these things, they also need to know how to replicate representations of trees, dogs, cars, people, and scenarios, and realistically at that. It's a heavy lift, and as Penn State Institute of Energy and the Environment noted in its April 2025 report, "By 2030-2035, data centers could account for 20% of global electricity use, putting an immense strain on power grids." However, those energy costs are rising in real time now, and what I never really accounted for is how energy availability is a sort of zero-sum game. There's only so much of it, and when some part of the grid is eating more than its fair share, the remaining customers have to divvy up what's left and shoulder skyrocketing costs to keep backfilling their energy needs (as well as the energy needs of the data centers). In the US, we're seeing this scenario play out in our pocketbooks as, according to PJM Interconnection (one of the country's largest energy suppliers), energy bills are rising in response to AI's overwhelming energy demands. Data centers, which are dotted across the US, are often responsible for serving the cloud-based intelligence needs of systems like ChatGPT, Gemini, Copilot, Meta AI, and others. The need for supporting live responses and fresh training to keep the models in step with current information is putting pressure on our creaky energy infrastructure. PJM, it seems, is spreading the cost of supporting these Data Centers across the network, and it's hitting customers to the tune of, according to this report, as much as a 20% increase in their energy bills. Because we live on AI Time, there is no easy solution. AI development isn't slowing down to wait for a long-term solution, with OpenAI's GPT-5 expected soon, Agentic AI on the rise, and Artificial General Intelligence on the horizon. As a result, energy demand will surely rise faster than we can backfill with better energy management, improved infrastructure, and new resources. The International Energy Agency predicts that in the US, "power consumption by data centers is on course to account for almost half of the growth in electricity demand between now and 2030." The issue is exacerbated by a faltering energy infrastructure in which older energy plants are becoming less reliable, and some new rules that restrict the use of fossil fuels. Most experts agree that renewable resources like solar and wind could help here, but that picture is recently far less sunny. Earlier this month, the Trump Administration issued an Executive Order to "terminate the clean electricity production and investment tax credits for wind and solar facilities." President Trump famously hates Windmill farms, calling them "garbage." As the US pumps the brakes on clean and renewable resources, the current grid will continue to huff and puff its way through supporting untold numbers of meme-generating prompts, requests for business proposal summaries, and AI videos featuring people eating cats that turn into pasta (yes, that's a thing). At home, we'll be opening our latest electricity bills and wondering why the energy bill's too damn high. Perhaps we'll power up ChatGPT and ask in a prompt for an explanation. One could only hope that it points you back to this article, but that seems equally unlikely.

Climate advocates outraged at Trump administration plans to fast-track AI sector

Scheme rolled out Wednesday reveals intent to dismantle some environmental and land use regulations The Trump administration has unveiled plans to speed the development of the highly polluting artificial intelligence sector, sparking outrage from climate advocates. Rolled out on Wednesday, the 28-page scheme pledges to remove so-called "bureaucratic red tape" and streamline permitting for data centers, semiconductor manufacturing facilities and fossil fuel infrastructure. To do so, it will dismantle some environmental and land use regulations, rolling back some Biden-era rules for subsidies for semiconductor plants related to climate requirements, and seeking to establish exclusions for data centers from the National Environmental Policy Act and streamline permits under the Clean Water Act. "We need to build and maintain vast AI infrastructure and the energy to power it. To do that, we will continue to reject radical climate dogma and bureaucratic red tape, as the Administration has done since Inauguration Day," the plan says. "Simply put, we need to 'Build, Baby, Build!'" Trump is also expected to sign three AI-related executive orders on Wednesday during a keynote address at a summit in DC. The announcement will be co-hosted by bipartisan lawmakers with the Hill and Valley Forum and a business and technology podcast hosted by four technology investors and businessmen, including Trump's AI and crypto czar David Sacks. The AI sector is already depleting land and water resources and taking a massive toll on the climate, with AI-powered large language models like ChatGPT taking up to 10 times more energy to complete than a regular Google search, according to an estimate by the Electric Power Research Institute. Last year, ChatGPT used more than half a million kilowatts of electricity every day, equivalent to the daily power use of 180,000 US households. The training of a single AI model can lead to an emissions footprint that is almost five times larger than the lifetime carbon footprint of the average American car. Recent research from Food and Water Watch also found that energy demand from AI servers and data centers in the US is expected to increase up to threefold from 2023 to 2028, which could lead the US sector to, by 2028, annually consume enough water to fill more than 1 million Olympic-size swimming pools and enough electricity to power more than 28 million American households. "At its core, President Trump's AI agenda is nothing more than a thinly veiled invitation for the fossil fuel and corporate water industries to ramp up their exploitation of our environment and natural resources - all at the expense of everyday people," said Mitch Jones, a managing director Food and Water Watch, an environmental advocacy group. The new plan recommends that regulators review states' AI laws to see whether they interfere with the agency's authority. It also says federal agencies will "consider a state's AI regulatory climate when making funding decisions" and "limit funding if the state's AI regulatory regimes may hinder the effectiveness of that funding or award". Republicans earlier this year attempted to do a version of this by placing a moratorium on states' ability to enact regulations on artificial intelligence into Trump's One Big Beautiful Bill Act, but the provision was stripped at the last minute. "Under this plan, tech giants get sweetheart deals while everyday Americans will see their electricity bills rise to subsidize discounted power for massive AI data centers," said JB Branch, a big-tech accountability advocate with consumer advocacy organization Public Citizen. "States are held hostage: either stop protecting their residents from dangerous, untested AI products, or lose federal funding." As a counterweight to the new Trump plan, a broad coalition of more than 90 advocacy groups - including climate and environmental justice non-profits, consumer protection organizations and labor advocates - published an open letter calling for a "people's AI action plan" that prioritizes "public well-being, shared prosperity, a sustainable future, and security". "We can't let big tech and big oil lobbyists write the rules for AI and our economy at the expense of our freedom and equality, workers and families' well-being," the coalition wrote. Research shows that many data centers used for AI are placed near low-income communities of color, which are already often overburdened by pollution. "People sacrifice their health, their well-being and, too often, their future, so that others can benefit," said Sharon Lewis, executive director of the Connecticut Coalition for Environmental Justice. "We're told these data centers are harmless, but even though they might seem like they pose no risk, in reality, these energy-hungry, pollution-intensive facilities are just as damaging to our environment and health."

AI Datacenters Are Raising Nearby Residents' Electric Bills

If you're looking for someone to blame for your ballooning energy bills, we have an increasingly familiar culprit: AI data centers. A new analysis of one the US's largest power grids, PJM, found that a rise in customer energy rates is directly attributable to the tremendous power demands of these data facilities that undergird services like OpenAI's ChatGPT, the Washington Post reports. Serving 67 million customers, the PJM region covers just over a dozen states, including Indiana, Maryland, Michigan, Pennsylvania, Virginia, as well as DC. Some of these states will see their energy bills surge by more than 20 percent this summer, Reuters reported; in Philadelphia, according to WaPo, the typical bill rose by about $17. And in Columbus, Ohio, prices spiked by $27. "We are seeing every region of the country experience really significant data center load growth," Abe Silverman, a researcher of energy markets at Johns Hopkins University, told WaPo. "It's putting enormous upward pressure on prices, both for transmission and for generation." Using Columbus as an example again, customers are paying an extra $240 per year due to the power demand of AI data centers, WaPo calculated based on figures from local utility company AEP Ohio. One of the reasons for the soaring costs is that utility companies -- which maintain the infrastructure that delivers your power, rather than generating it -- are paying more for "capacity," or the total power that's made available to them. Utility companies bid for capacity at an annual auction, and last year, per WaPo, these auction prices soared by an eye-watering 833 percent. They rose again this year by another 22 percent. According to an independent monitor's report, about three-quarters of the surge in capacity prices are because of planned or existing data centers. "There has been a paradigm shift in the market," Joseph Bowring, the author of the independent monitor's report, told WaPo. "These data centers could overwhelm the grid. The system cannot go on this way." Generative AI's energy appetite is so voracious that companies like Microsoft and Google are firing up entire nuclear power plants to supply their data centers. Even heavily polluting coal plants are being kept online as a stopgap until these new facilities come online. And the Trump administration wants to build even more coal plants. It's not just the prices you should worry about, though, or the harrowing environmental toll, ranging from titanic carbon emissions to vaporizing entire lakes' worth of water. The huge spike in power demands are also putting immense stress on the aging power grids themselves, which are failing during brutal heatwaves and frigid winters. Some states are pushing back. Ohio regulators recently ruled that data center companies must pay more for their energy to help make upgrades to the power grid, WaPo noted. But the story's different in Virginia, which has more data centers than any other state -- 596, according to the website Data Center Map, with the overwhelming majority up North near DC. To keep its numero uno status, Virginia is offering huge tax breaks to data center companies -- meaning they get a free ride, and the state's taxpayers, if the latest trends keep up, get bigger energy bills. "The Big Tech companies suck up the electricity, and we end up paying higher prices," an Ohio resident told WaPo. "I'm not comfortable with average customers subsidizing billion-dollar companies."

Tech companies building massive AI data centers should pay to power them

The projected growth in artificial intelligence and its unprecedented demand for electricity to power enormous data centers present a serious challenge to the financial and technical capacity of the U.S. utility system. Appreciation for the sheer magnitude of that challenge has gotten lost as forecast after forecast projects massive growth in electric demand over the coming decade. The idea of building a data center that will draw 1 gigawatt of power or more, an amount sufficient to serve over 875,000 homes, is in the plans of so many data center developers and so routinely discussed that it no longer seems extraordinary. The challenge, when viewed in the aggregate, may be overwhelming. A recent Wood Mackenzie report identified 64 gigawatts of confirmed data center related power projects currently on the books with another 132 gigawatts potentially to be developed. 64 gigawatts are enough to power 56 million homes -- more than twice the population of the 15 largest cities in America. The U.S. electric utility system is struggling to meet the projected energy needs of the AI industry. The problem is that many utilities do not have the financial and organizational resources to build new generating and transmission facilities at the scale and on the data center developers' desired timeline. The public policy question now on the table is who should pay for and bear the risk for these massive mega-energy projects. Will it be the AI developers such as Amazon, Microsoft, Meta and Alphabet -- whose combined market value is seven times that of the entire S&P 500 Utility Sector -- or the residential and other customers of local electric utilities? The process to answer this and related questions is underway in the hallways of the U.S. Congress, at the Federal Energy Regulatory Commission and other federal agencies, in tariff proceedings before state regulatory authorities and in public debate at the national, state and local levels. Whether they are developed at the federal, state or local level, the following values and objectives should form the core of public policy in this area: * Data centers developers that require massive amounts of electric power (e.g. above 500MW or another specified level) should be required to pay for building new generating and transmission facilities. The State of Texas recently enacted legislation that requires data centers and other new large users to fund the infrastructure necessary to serve their needs. Although it is customary to spread the cost of new facilities across the user base of a utility, the demands that data center developers are placing on utility systems across the country are sufficiently extraordinary to justify allocating the costs of new facilities to those developers. Moreover, data center developers have the financial resources to cover those costs and incorporate them into the rates charged to users of their AI services. * The developers of large data centers should bear the risk associated with new utility-built generating and transmission facilities, not the utility. As an example of such a policy, the Public Utility Commission of Ohio just approved a compromise proposed by American Electric Power of Ohio that would require data centers with loads greater than 1 gigawatt and mobile data centers over 25 megawatts to commit to 10-year electric service contracts and pay minimum demand charges based on 85 percent of their contract capacity, up from 60 percent under the utility's current general service tariff. Another option included in the Texas legislation requires significant up-front payments early in the planning process and mandates that data center developers disclose where they may have simultaneously placed demands for power. It is not unusual for data center requests for service to be withdrawn once they decide on the best location and package of incentives. Data center developers have the financial capacity and ability to manage this risk, utilities do not. * Generating facilities that are co-located at large data centers should be integrated with the local utility electric grid, with appropriate cost allocation. Although a few projects have examined the option of a co-located power generation "island" fully independent of the grid, most projects intend to interconnect with the grid system for back-up power and related purposes. Properly managed, this interconnection could be advantageous for both the data center and the utility system, provided that costs are appropriately allocated across the system. * The U.S. government should continue to support the development of nuclear technology, including small modular reactors. U.S. utilities do not have the financial resources to assume the risk of building new nuclear-powered generating facilities. The emergence of a new set of customers, data center developers with enormous needs for electric power and deep pockets, changes the equation. The U.S. government has provided billions of dollars of support for new nuclear technologies and should continue to do so for the purpose of bringing their costs down. * The U.S. government should continue to support energy efficiency improvements at data centers. Data centers use massive amounts of power for running servers, cooling systems, storage systems, networking equipment, backup systems, security systems and lighting. The National Renewable Energy Laboratory has developed a "handbook" of measures that data centers can implement to reduce energy usage and achieve savings. In addition, there now are strong market forces to develop new super-efficient chips that will lower the unit costs of training and using AI models. The U.S. government should help accelerate the development of these chips given their leverage on U.S. electricity demand. The stakes in this public policy debate over our energy future could not be higher. If we get these policies right, AI has the potential to remake the U.S. economy and the energy infrastructure of this country. If we get it wrong, the push to build new generating and transmission facilities to provide gigawatts of power has the potential to overwhelm the financial and operational capacity our electric utility system, impose burdensome rate increases on homeowners and businesses, undercut efforts to reduce the use of fossil fuels to meet climate-related goals and compromise the reliability of our electricity grid for years to come. David M. Klaus is a consultant on energy issues who served as deputy undersecretary of the U.S. Department of Energy during the Obama administration and as a political appointee to two other Democratic presidents. Mark MacCarthy is the author of "Regulating Digital Industries" (Brookings, 2023), an adjunct professor at Georgetown University's Communication, Culture & Technology Program, a nonresident senior fellow at the Institute for Technology Law and Policy at Georgetown Law and a nonresident senior fellow at the Brookings Institution.

How Tech's AI Boom Could Drive Up Small Business Costs

It's broadly known that that rapid development and scaling of tech like cloud computing, artificial intelligence (AI), cryptocurrency mining, and even video streaming consume vast amounts of energy. Yet few small business owners -- or heads of private households -- are aware of how much their own electricity bills are increasing from electrical consumption of big data centers that big companies use to operate their power-guzzling platforms. As that enormous demand surges, the prices of dwindling power supplies for everyone else also soar. That expensive electrical link between small and large businesses became clearer this month, when regional grid operator PJM Interconnection announced the results of its annual auction to secure sufficient power capacity over the next year. The company said bids it received were 22 percent higher than in 2024 -- a considerable increase, but nowhere near the 833 percent price surge it reported in 2023. But it still means companies and households in Washington D.C. and the 13 Midwest and Atlantic states PJM serves will likely see 1.5 percent to 5 percent jolts in their power bills over the next year, based on the calculations PJM uses to pass along cost increases. That may not sound like an enormous one-time rise, but it will come atop the 6 percent increase in U.S. electricity prices between January and June of this year, according to the Bureau of Labor Statistics. Worse still, those climbing energy costs -- which President Donald Trump vowed to cut in half during his first year in office -- are likely to continue increasing in coming years. The reason? In announcing the recent auction results, PJM executive vice president Stu Bresler explained, "the majority of the demand increase you saw was large loads and data center additions." Neither the proliferation of those facilities, nor the enormous energy needs they have, are likely to abate any time soon. New data centers are being built almost constantly these days, enabling tech companies to prepare their energy-voracious AI apps to play bigger and increasingly diversified roles in business and life. As that multiplication continues, it will stoke demand for electricity, and along with that prices for it as supply and capacities reach their limits. It will also test the abilities of already overtaxed and in some cases antiquated electrical grids to keep up. "It literally tells you we are out of generation," Sean Kelly, chief executive officer of power forecasting firm Amperon Holdings Inc. told Bloomberg after the auction. "It's good for traders, it's good for asset owners, it is not good for consumers." That raw bargain for households and small business owners now facing higher energy prices turns out to be a pretty sweet deal for Google, Microsoft, Meta, Amazon, and other tech companies whose data centers are consuming all that electricity. As the sector pursues AI development and expansion, many of those corporations are building even more of the processing facilities, often with encouragement from local authorities. For example, Virginia already plays home to "Data Center Alley." The construction of those 596-and-counting facilities near Ashburn was supported by the state, which granted their builders and users exemption from sales tax on all computing equipment used in them. Ohio, which PJM also serves, offers a similar tax exemption to encourage data center building. Many other states and localities across the U.S. are similarly bidding for the investments and jobs that big tech companies provide when building new centers. The problem is, those additional processing complexes -- which are often as big as a football field, and also consume enormous volumes of water for cooling -- are already testing the capacity limits of the nation's aging, struggling electricity grid. The ongoing spread of AI and its increasing power demands will make that challenge exponentially harder. According to the World Economic Forum, energy consumption of emerging AI alone "is doubling roughly every 100 days." That's expected to grow fourfold as the tech transitions from developmental to operational phases. That additional draw on the grid may wind up create shortage trouble for many businesses and households -- which between 2012 and 2022 suffered a 20 percent rise in power outages. Just as bad, the duration or those blackouts increased 46 percent over the same period. A recent Goldman Sachs study estimated AI will add 160 percent to generally rising U.S. energy demand through 2032. Earlier studies forecast annual growth of tech's electricity consumption at between 13 percent to 15 percent through the end of the decade. That all comes as the Trump administration is moving to extend the lives of aging fossil fuel power plants, many of which are already functioning at maximum capacity. At the same time, he's ended tax breaks and other incentives to companies developing or using solar, wind, and other renewable sources that could have taken up some of the slack. As a result, the combination of limited power facilities, an increasingly creaky grid, and the proliferation of AI applications and data centers enabling their use may translate into years of higher electricity bills for small business owners and households. Contributors of social platform Reddit's subreddit on energy aren't waiting for that to happen, and have begun protesting Big Tech sucking up what are already barely sufficient electricity supply. "AI power needs must be split from consumer and commercial needs and the Microsoft, Meta, Googles of the world need to pay for those (both setting up the infrastructure and operating it)," redditor nspy1011 said in response to the PJM auction. "Enough with privatizing profits and socializing costs/losses." "Americans are going to get screwed because Trump stopped Biden's tax credits for solar panel factories and wind turbine factories," lamented Franklin_le_Tanklin. "Anyone who can't survive off the grid with solar and battery is going to get destroyed in High electricity rates." Some commentators, however, expect tech companies -- and U.S. business ingenuity -- to fix the same problem they're now creating. "As the technology improve electricity demand will become more reasonable," said Future_Helicopter970. "The hardware powering AI is performing faster every year, improving at a faster rate than Moore's Law. These performance gains have been measured by outside groups, so it's not just marketing hype. Specialized AI chips are doing better than general purpose chips." The final deadline for the 2025 Inc. Power Partner Awards is Friday, August 8, at 11:59 p.m. PT. Apply now.