Americans are learning the AI boom comes with many costs. Not only do the world’s largest corporations appropriate people’s and businesses’ data without payment, but they also drive up the prices of everything from semiconductors to prime industrial real estate, then force taxpayers to subsidize their sprees. Now another bill has come due – for electricity to power AI.

This summer has seen energy bills soar by up to 35% in parts of the U.S. From Ohio, to Pennsylvania, to New Jersey, where Google, Amazon, Microsoft, and others are building data centers at a record rate, average monthly bills have already jumped by up to $27. And this is just the beginning.

 The AI-driven data center buildout is projected to push U.S. energy demand growth from a low and steady 0.41% annual rate between 2000 and 2023 to 2.4% per year from 2025. Over a decade, that represents a 26.7% total increase compared with the 4.2% expected under pre-AI conditions. Accordingly, energy utilities and grid operators are investing in new infrastructure – much of it based on fossil fuels – that can only be paid for by higher energy prices. One recent study found that residential ratepayers served by PJM, the energy utility for the mid-Atlantic and parts of the Midwest, could see their bills increase by between 30% and 60% by 2030.

 To put the data center boom into perspective, consider Mark Zuckerberg’s latest project: a Manhattan-sized complex in Louisiana that will require 5GW of energy. That equates to the electricity consumption of 3.75 million homes, or roughly the residential power demand of the entire Chicago metro area. It is also more than any single power plant in the U.S. can produce, with the exception of the Grand Coulee Dam.

Energy regulators have long recognized that different customers impose different cost burdens on energy infrastructure. In what is known as the cost causation principle, users have historically been broken into different classes, each of which is charged a price per unit broadly representing the cost it imposes on the grid.

 Most utilities, for instance, require industrial scale users to pay for the initial cost of connecting their facility to the grid. They then, however, charge these industrial facilities less per unit of energy than households pay, because it costs less to serve a single industrial plant with a peak demand of 1 MW than it does to serve 2,000 homes with a collective peak demand of 1 MW.

 This history and its underlying principles imply the costs of building the energy infrastructure required by data centers should be borne by those causing them. This means the new plants and grid infrastructure catering to AI energy demand should be paid for by those making this investment necessary: the AI industry.

 Increasingly, however, the corporations dominating data center development have used their concentrated financial and political power to push these costs onto the bills of individual households, using them and other industries to subsidize their enormous energy appetite.

 One way they are doing so is by misleadingly claiming that data centers will deliver major employment and economic benefits to local communities, which makes local authorities fear losing out to neighboring towns and states. The corporations that dominate AI are also adept at stoking race-to-the-bottom thinking among the utilities and grid operators themselves, by making the case the AI boom represents a once-a-lifetime opportunity to gain new energy-intensive customers. 

The ultimate result is to incentize the utilities to exploit their own monopoly power over their captive residential and commercial customers, raising prices to subsidize lower-price offers to potential data center investors deciding between competing energy providers. As a recent report demonstrates, utility companies are offering data center operators favorable –  even below-cost – rates, either as a group or as tailored special contracts. In parallel, some utility regulators are being undermined by state legislatures. In Mississippi, for instance, legislators recently stripped their regulator of any authority to review contracts between utilities and data centers.

Making AI companies pay for the energy infrastructure they require is possible. Options include directing public utility commissions to create a new rate classification for data centers, or requiring them to commit to fairly-priced long-term contracts and minimum contract payments. Ohio’s Public Utilities Commission is seeking to do this but faces concerted lobbying from Big Tech.

Energy markets and their regulators have a long history of fairly distributing the cost of infrastructure spending, making those responsible for higher costs pay their fair share. Tech giants are using their concentrated economic and political power to upend this tradition. Most recently, they have wooed President Trump into promising to help them tap more easily into local and regional energy grids, in ways that would put them into competition with even more American households.

If they have their way, many citizens will be left unable to pay their bills and ordinary businesses may struggle to stay afloat.

The Open Markets Institute submitted a letter to House Judiciary Committee Chair Jim Jordan (R-OH) and Ranking Member Jamie Raskin (D-MD), urging them to recognize how Europe’s approach to regulating essential online communications platforms strengthens free speech, democracy, and the economy. Congresswoman Pramila Jayapal introduced the Open Markets letter into the record at a contentious the House Judiciary Committee hearing on September 3, at which right-wing UK politician Nigel Farage testified. In its letter, Open Markets emphasized that the true threat to free speech comes not from democratic governments but from the handful of corporations — including Meta, Google, and X — that dominate global online communications. “These corporations are not neutral platforms,” the letter states. “They amplify some voices while silencing others, suppress independent journalism, and manipulate what billions of people read, see, and share — all with no accountability to the public.” Read the letter here.

Also this week, Open Markets’ Europe Program authored a letter urging the European Commission to stand firm against the Trump administration’s escalating attacks on the EU’s digital regulations. The letter called on the EU president von der Leyen to continue pursuing investigations under the Digital Services Act, the Digital Markets Act, and EU antitrust law and consider additional measures in response to unprecedented U.S. interference, including use of the EU’s new Anti-Coercion Instrument. “This moment is critical for ensuring Europe’s ability to set and enforce democratic rules for the digital economy free from foreign pressure,” said Open Markets Europe director Max von Thun. Nearly 60 civil society groups signed the letter, which was covered by POLITICO Europe and Tagesspiegel Background. Read the letter here.

Open Markets last Friday launched a bimonthly newsletter called Liberty & Power that will make the case that defenders of liberal democracy need a policy program and story that gets to the heart of the anger and frustration we all feel at the economic status quo and our fears for our democracy. In the newsletter, experts at OMI and key allies will explain how corporate power warps our news and information systems, stunts innovation in crucial industries, and chokes our access to the most basic necessities of life. They will also publish original analysis of ongoing debates about political economic philosophy, and on policy innovations in the US and around the world. The inaugural issue looked at Big Tech oligarch support for the “Abundance” campaign. Read our inaugural issue, on Substack, here. Click here to subscribe.