HARRISBURG, Pa. — The forecasts are eye-popping: utilities say they’ll need two or three times more electricity within a few years to power massive new data centers that are feeding a fast-growing AI economy.

But the challenges — some say the impossibility — of building new power plants to meet that demand so quickly has set off alarm bells for lawmakers, policymakers and regulators who wonder if those utility forecasts can be trusted.

One burning question is whether the forecasts are based on data center developments that may never get built — eliciting concern that regular ratepayers could be stuck with the bills totaling billions of dollars to construct unnecessary power plants and grid infrastructure.

The scrutiny comes as analysts warn of the risk of an artificial intelligence investment bubble that’s ballooned tech stock prices and could burst.

Meanwhile, consumer advocates are finding that ratepayers in some areas — such as the one featuring the mid-Atlantic electricity grid, which encompasses all or parts of 13 states stretching from New Jersey to Illinois, as well as Washington, D.C. — are already underwriting the cost to supply power to data centers; some of them have been built, some not.

“There’s speculation in there,” said Joe Bowring, who heads Monitoring Analytics, the independent market watchdog in the mid-Atlantic grid territory. “Nobody really knows. Nobody has been looking carefully enough at the forecast to know what’s speculative, what’s double-counting, what’s real, what’s not.”

There is no standard practice across grids or for utilities to vet such massive projects, and figuring out a solution has become a hot topic, utilities and grid operators say.

Uncertainty around forecasts is typically traced to a couple of things.

One concerns developers seeking a grid connection, but whose plans aren’t set in stone or lack the heft — clients, financing or otherwise — to bring the project to completion, industry and regulatory officials say.

Another is data center developers submitting grid connection requests in various separate utility territories, PJM Interconnection, which operates the mid-Atlantic grid, and Texas lawmakers have found.

Often, developers, for competitive reasons, won’t tell utilities if or where they’ve submitted other requests for electricity, PJM said. That means a single project could inflate the energy forecasts of multiple utilities.

The effort to improve forecasts got a high-profile boost in September, when a Federal Energy Regulatory Commission member asked the nation’s grid operators for information on how they determine whether a project is not only viable, but will use the electricity it says it needs.

“Better data, better decision-making, better and faster decisions mean we can get all these projects, all this infrastructure built,” the commissioner, David Rosner, said in an interview.

The Edison Electric Institute, a trade association of for-profit electric utilities, said it welcomed efforts to improve demand forecasting.

The Data Center Coalition, which represents tech giants like Google and Meta and data center developers, has urged regulators to request more information from utilities on their forecasts and to develop a set of best practices to determine the commercial viability of a data center project.

The coalition’s vice president of energy, Aaron Tinjum, said improving the accuracy and transparency of forecasts is a “fundamental first step of really meeting this moment” of energy growth.

“Wherever we go, the question is: ‘Is the (energy) growth real? How can we be so sure?’” Tinjum said. “And we really view commercial readiness verification as one of those important kind of low-hanging opportunities for us to be adopting at this moment.”

Igal Feibush, the CEO of Pennsylvania Data Center Partners, a data center developer, said utilities are in a “fire drill” as they try to vet a deluge of data center projects all seeking electricity.

The vast majority, he said, will fall off because many project backers are new to the concept and don’t know what it takes to get a data center built.

States also are trying to do more to find out what’s in utility forecasts and weed out speculative or duplicative projects.

In Texas, which is attracting large data center projects, lawmakers still haunted by a blackout during a deadly 2021 winter storm were shocked when told in 2024 by the grid operator, the Electric Reliability Council of Texas, that its peak demand could nearly double by 2030.

They found that state utility regulators lacked the tools to determine whether that was realistic.

Texas state Sen. Phil King told attendees at a hearing earlier this year that the grid operator, utility regulators and utilities weren’t sure if the power requests “are real or just speculative or somewhere in between.”

Lawmakers passed legislation sponsored by King, now law, that requires data center developers to disclose whether they have requests for electricity elsewhere in Texas and to set standards for developers to show that they have a substantial financial commitment to a site.

PPL Electric Utilities, which delivers power to 1.5 million customers across central and eastern Pennsylvania, projects that data centers will more than triple its peak electricity demand by 2030.

Vincent Sorgi, president and CEO of PPL Corp., told analysts on an earnings call this month that the data center projects “are real; they are coming fast and furious” and that the “near-term risk of overbuilding generation simply does not exist.”

The data center projects counted in the forecast are backed by contracts with financial commitments often reaching tens of millions of dollars, PPL said.

Still, PPL’s projections helped spur a state lawmaker, Rep. Danilo Burgos, to introduce a bill to bolster the authority of state utility regulators to inspect how utilities assemble their energy demand forecasts.

Ratepayers in Burgos’ Philadelphia district just absorbed an increase in their electricity bills. It was attributed by the utility, PECO, to the rising cost of wholesale electricity in the mid-Atlantic grid driven primarily by data center demand.

That’s why ratepayers need more protection to ensure they are benefiting from the higher cost, Burgos said.

“Once they make their buck, whatever company,” Burgos said, “you don’t see no empathy towards the ratepayers.”

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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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