HARRISBURG, Pa. — With electricity bill amounts surging upward, states are under pressure to insulate regular household and business ratepayers from the costs of feeding Big Tech’s energy-hungry data centers.

It’s not clear whether any state has a solution, and the actual effect of data centers on electricity bills is difficult to pin down. Some critics question whether states are bold enough to take a hard line against tech behemoths like Microsoft, Google, Amazon and Meta.

But more than a dozen states have begun taking steps as data centers drive a rapid build-out of power plants and transmission lines.

That has meant pressuring the nation’s biggest power grid operator to clamp down on price increases, studying how data centers impact electricity bills or pushing data center owners to pay a larger share of local transmission costs.

Rising power bills are “something legislators have been hearing a lot about,” said Charlotte Shuff of the Oregon Citizens’ Utility Board, a consumer advocacy group. “It’s something we’ve been hearing a lot about. More people are speaking out at the public utility commission in the past year than I’ve ever seen before. There’s a massive outcry.”

Some data centers could require more electricity than cities the size of Pittsburgh, Cleveland or New Orleans, and make huge factories look tiny by comparison. That’s pushing policymakers to rethink a system that, historically, has spread transmission costs among classes of consumers that are proportional to electricity use.

“A lot of this infrastructure, billions of dollars of it, is being built just for a few customers and a few facilities, and these happen to be the wealthiest companies in the world,” said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University. “I think some of the fundamental assumptions behind all this just kind of breaks down.”

A fix, Peskoe said, is a “can of worms” that pits ratepayer classes against one another.

Some officials downplay the role of data centers in pushing up electric bills.

Tricia Pridemore, who sits on Georgia’s Public Service Commission and is president of the National Association of Regulatory Utility Commissioners, pointed to an already tightened electricity supply and increasing costs for power lines, utility poles, transformers and generators as utilities replace aging equipment or harden it against extreme weather.

The data centers needed to accommodate the artificial intelligence boom are still in the regulatory planning stages, Pridemore said. The Data Center Coalition, which represents Big Tech firms and data center developers, has said its members are committed to paying their fair share.

But growing evidence suggests that some Americans’ electricity costs are rising to subsidize the massive energy needs of Big Tech as the U.S. competes in a race against China for artificial intelligence superiority.

Data and analytics firm Wood Mackenzie recently published a report that suggested 20 proposed or effective specialized rates for data centers in 16 states it studied aren’t nearly enough to cover the cost of a new natural gas power plant.

In other words, unless utilities negotiate higher specialized rates, other ratepayer classes — residential, commercial and industrial — are likely paying for data center power needs.

Meanwhile, in June, Monitoring Analytics, the independent market watchdog for the mid-Atlantic grid, produced research showing that 70 percent — or $9.3 billion — of last year’s increased electricity cost was the result of data center demand.

Last year, five governors led by Pennsylvania’s Josh Shapiro began pushing back against power prices set by mid-Atlantic grid operator PJM Interconnection after that amount spiked nearly sevenfold. They warned of customers “paying billions more than is necessary.”

PJM has yet to propose ways to guarantee that data centers pay their share, but Monitoring Analytics is floating the idea that data centers should be required to procure their own power.

In a filing last month, it said that would avoid a “massive wealth transfer” from average people to tech companies.

At least a dozen states are eyeing ways to make data centers pay higher local transmission costs.

In Oregon, a data center hot spot, lawmakers in June passed legislation ordering state utility regulators to develop new (presumably higher) power rates for data centers.

The Oregon Citizens’ Utility Board says there is clear evidence that costs to serve data centers are being spread among all customers — at a time when some electric bills there are up 50 percent over the past four years and utilities are disconnecting more people than ever.

New Jersey’s governor last month signed legislation commissioning state utility regulators to study whether ratepayers are being hit with “unreasonable rate increases” to connect data centers and to develop a specialized rate to charge data centers.

In some other states, like Texas and Utah, governors and lawmakers are trying to avoid a supply-and-demand crisis that leaves ratepayers on the hook — or in the dark.

In Indiana, state utility regulators approved a settlement between Indiana Michigan Power Co., Amazon, Google, Microsoft and consumer advocates that sets parameters for data center payments for service.

Kerwin Olsen of the Citizens Action Council of Indiana, a consumer advocacy group, signed the settlement and called it a “pretty good deal” that contained more consumer protections than what state lawmakers passed.

But state law doesn’t force large power users like data centers to publicly reveal their electric usage, he said, so pinning down whether they’re paying their fair share of transmission costs “will be a challenge.”

In a March report, the Environmental and Energy Law Program at Harvard University questioned the motivation of utilities and regulators to shield ratepayers from footing the cost of electricity for data centers.

Both utilities and states have incentives to attract big customers like data centers, it said.

To do it, utilities — which must get their rates approved by regulators — can offer “special deals to favored customers” like a data center and effectively shift the costs of those discounts to regular ratepayers, the authors wrote. Many state laws can shield disclosure of those rates, they said.

In Pennsylvania, an emerging data center hot spot, the state utility commission is drafting a model rate structure for utilities to consider adopting. An overarching goal is to get data center developers to put their money where their mouth is.

“We’re talking about real transmission upgrades, potentially hundreds of millions of dollars,” commission Chairman Stephen DeFrank said. “And that’s what you don’t want the ratepayer to get stuck paying for.”

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HARRISBURG, Pa. — Coal-fired power plants, long an increasingly money-losing proposition in the U.S., are becoming more valuable now that the suddenly strong demand for electricity to run Big Tech‘s cloud computing and artificial intelligence applications has set off a full-on sprint to find new energy sources.

President Donald Trump — who has pushed for U.S. “energy dominance” in the global market and suggested that coal can help meet surging power demand — is wielding his emergency authority to entice utilities to keep older coal-fired plants online and producing electricity.

While some utilities were already delaying the retirement of coal-fired plants, the scores of such plants that have been shut down in the past couple years — or will be shut down in the next couple years — are the object of growing interest from tech companies, venture capitalists, states and others competing for electricity.

That’s because they have a very attractive component: high-voltage lines connecting to the electricity grid that they aren’t using anymore and that a new power plant could use.

That ready-to-go connection could enable a new generation of power plants — gas, nuclear, wind, solar or even battery storage — to help meet the demand for new power sources more quickly.

For years, the bureaucratic nightmare around building new high-voltage power lines has ensnared efforts to get permits for such interconnections for new power plants, said John Jacobs, an energy policy analyst for the Washington, D.C.-based Bipartisan Policy Center.

“They are very interested in the potential here,” he said. “Everyone sort of sees the writing on the wall for the need for transmission infrastructure, the need for clean, firm power, the difficulty with siting projects, and the value of reusing brownfield sites.”

Rising power demand, dying coal plants

Coincidentally, the pace of retirements of the nation’s aging coal-fired plants had been projected to accelerate at a time when electricity demand is rising for the first time in decades.

The Department of Energy, in a December report, said its strategy for meeting that demand includes reusing coal plants, which have been unable to compete with a flood of cheap natural gas while being burdened with tougher pollution regulations aimed at its comparatively heavy emissions of greenhouse gases.

There are federal incentives as well — tax credits and loan guarantees, for instance — that encourage the redevelopment of retired coal-fired plants into new energy sources.

Todd Snitchler, president and CEO of the Electric Power Supply Association, which represents independent power plant owners, said he expects Trump’s executive orders will mean some coal-fired plants run longer than they would have — but that they are still destined for retirement.

Time is of the essence in getting power plants online.

Data center developers are reporting a yearlong wait in some areas to connect to the regional electricity grid. Rights-of-way approvals to build power lines can also be difficult to secure, given objections by neighbors who may not want to live near them.

Stephen DeFrank, chairman of the Pennsylvania Public Utility Commission, said he believes rising energy demand has made retiring coal-fired plants far more valuable.

That’s especially true now that the operator of the congested mid-Atlantic power grid has re-configured its plans to favor sites like retired coal-fired plants as a shortcut to meet demand, DeFrank said.

“That’s going to make these properties more valuable because now, as long as I’m shovel ready, these power plants have that connection already established, I can go in and convert it to whatever,” he said.

Gas, solar and more at coal power sites

In Pennsylvania, most conversions are likely to be natural gas because Pennsylvania sits atop the prolific Marcellus Shale reservoir, DeFrank said.

In Homer City, a coal-fired plant that had operated for 54 years recently saw its smokestacks and cooling towers demolished. The owners are planning to build a $10 billion natural gas production facility to power data centers on campus. It would be the nation’s third-largest power generator.

In states across the South, utilities are replacing retiring or retired coal units with gas. That includes a plant owned by the Tennessee Valley Authority; a Duke Energy project in North Carolina; and a Georgia Power plant.

The high-voltage lines at retired coal plants on the Atlantic Coast in New Jersey and Massachusetts were used to connect offshore wind turbines to electricity grids.

In Alabama, the site of a coal-fired plant shuttered in 2019, Plant Gorgas, will become home to Alabama Power’s first utility-scale battery energy storage plant.

Texas-based Vistra, meanwhile, is in the process of installing solar panels and energy storage plants at a fleet of retired and still-operating coal-fired plants it owns in Illinois, thanks in part to state subsidies approved there in 2021.

Don’t forget about the potential of nuclear

Nuclear is also getting a hard look.

In Arizona, lawmakers are advancing legislation to make it easier for three utilities there — Arizona Public Service, Salt River Project and Tucson Electric Power — to put advanced nuclear reactors on the sites of retiring coal-fired plants.

At the behest of Indiana’s governor, Purdue University studied how the state could attract a new nuclear power industry. In its November report, it estimated that reusing a coal-fired plant site for a new nuclear power plant could reduce project costs by between 7 percent and 26 percent.

The Bipartisan Policy Center, in a 2023 study before electricity demand began spiking, estimated that nuclear plants could cut costs from 15 percent to 35 percent by building at a retiring coal plant site, compared to building at a new site.

Even building next to the coal plant could cut costs by 10 percent by utilizing transmission assets, roads and buildings while avoiding some permitting hurdles, the center said.

That interconnection was a major driver for Terrapower when it chose to start construction in Wyoming on a next-generation nuclear power plant next to PacifiCorp’s coal-fired Naughton Power Plant.

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