AI Needs Power: Who Pays for It?
Artificial intelligence needs electricity to support scientific research, write code, and perform countless other tasks. Microsoft has signed a power agreement to help restart a nuclear power plant in Pennsylvania. Depending on where you live, expanding the electricity system to support data centers can affect your electricity bill. If companies ever build a machine that takes my job, I would appreciate it if they at least covered the electricity costs.
We’ve Automated Both Halves of the Conversation
Your coworker might ask an AI tool to summarize a conversation. The summary simply says, “no.” We’ve automated both halves of the conversation and somehow kept the meeting.
AI companies pay for the electricity they use. However, you can still feel the effects of their electricity demand without subscribing to a single AI tool.
What Data Centers Actually Use
A data center is a building full of computers. Some facilities train AI models or run them whenever users submit prompts. These computers consume electricity and generate heat. Even when an answer appears as a few words on your screen, powerful machinery must process your request and keep the computers cool.
There Isn’t One Universal Electricity Cost for Asking AI
The amount of computing varies depending on the task and the system. Generating a video and answering a short question can require very different amounts of computing power. Therefore, no single electricity cost applies to every AI prompt.
The International Energy Agency estimates that electricity consumption at AI-focused data centers grew by 50 percent worldwide in 2025. Across all data centers, electricity consumption grew by 17 percent. AI-focused facilities form part of that larger total. These figures describe global computing demand, not the percentage increase in anyone’s household electricity bill.
The Local Challenge of Meeting New Electricity Demand
Communities must accommodate large amounts of new electricity demand in specific locations. A developer might finish constructing a data center before the utility completes the power lines or substation needed to supply it. Buying the computers does not complete the electrical connection.
Connecting Data Centers to the Electricity Grid
Electricity reaches your home through a physical network of power plants, transmission lines, substations, and distribution equipment. Data centers need connections to that same network.
A Large New Customer Can Help Pay for Existing Equipment
When the electricity grid has enough capacity and the existing wires can accommodate additional demand, a large new customer can help pay for infrastructure that already exists.
Generate Another AI Girlfriend and Give Her Six Fingers
At that point, I become incredibly supportive of whatever the hell those computers are doing. Generate another AI girlfriend and give her six fingers, and I’m willing to call it an artistic choice.
The Terms of the Connection Matter
A large customer can help cover existing infrastructure costs, provided the grid has enough capacity and the customer pays its fair share. However, when serving that customer requires expensive new equipment, utilities must determine who will cover the additional costs.
A bigger customer can generate more revenue, but it can also create more expenses. The terms of the connection determine how the utility allocates those costs.
Why Electricity Costs Rise
Your electricity bill helps pay for the power you consume, the network that delivers it, and the equipment utilities maintain to meet demand.
Imagine a hot afternoon when millions of people switch on their air conditioners. Utilities must keep enough generating capacity available to meet that demand, even when electricity consumption falls on cooler days.
That Commitment Is Called Capacity
PJM coordinates a large regional electricity system across parts of the eastern United States. It operates a capacity market that arranges payments to ensure electricity resources remain available during future periods.
Paying for Electricity Readiness Can Become More Expensive
Power plants and other generating resources must remain maintained and ready to supply electricity, even when they are not running. Utilities must account for these costs when they plan for future demand.
A Real Household Example: Pepco’s Electricity Rate Increase
In July, Pepco, the electric utility serving customers in Washington, D.C., increased its default electricity supply rates. For a household using an average amount of electricity, the regulator estimated an additional $9.56 per month on the total bill.
Several Factors Can Affect Household Electricity Bills
The regulator identified data center demand as one contributing factor, alongside power plant retirements, reliability requirements, and renewable energy requirements.
The regulator did not calculate the portion attributable exclusively to AI. Therefore, the increase does not represent a specific chatbot tax. Instead, it illustrates how several pressures can combine to raise household electricity costs.
How Much Can You Blame on AI?
In a report published in September, Pacific Northwest National Laboratory found that data centers had raised wholesale energy and capacity prices in several markets. However, the report said data centers had not been the primary driver of residential electricity price increases to date.
If your electricity bill increases, examine the factors affecting your local market. Higher electricity consumption and higher electricity rates can both increase your bill, but they represent different causes. Even if you reduce your electricity consumption, your supplier might still charge a higher rate.
A single AI prompt does not automatically add a guaranteed dollar amount to your neighbor’s electricity bill. The bigger question is how utilities prepare for large new customers and whether those customers cover the costs they create. Utilities must make these decisions while developers are still planning their projects.
Will the Data Center Actually Open?
Developers often request electricity connections before their data centers begin operating. They might also investigate several possible locations before choosing where to build.
Utilities need to determine whether each project will actually open, when it will begin operating, and how much electricity it will require.
Counting Every Proposed Project as a Finished Building
Utilities could prepare for several data centers when developers eventually build only one. Exploring multiple locations is normal, but treating every proposal as a guaranteed project can create expensive planning mistakes.
Predicting Birth Rates From Tinder Matches
Predicting completed data center projects from every expression of interest is a bit like predicting the birth rate from Tinder matches. You’re being very generous about how these evenings are going to end.
PJM Began Examining Large New Electricity Demands
Much of the proposed electricity demand in these planning discussions involves data centers. Utilities must evaluate these requests carefully to avoid building unnecessary infrastructure or leaving existing customers responsible for costs that developers should cover.
Local Communities Still Need Electricity When Projects Fail
If a utility builds new equipment for a data center that never opens, the infrastructure might still benefit other customers. However, the utility could face costs that it still needs to recover.
The company can change its plans, but the people who live in that area cannot simply stop needing electricity.
A company can discontinue a product with a blog post, while the equipment built to supply its data center remains in place. The money spent constructing that infrastructure does not disappear when the company cancels its plans.
Special Rules for New or Expanding Data Centers
Ohio has introduced special requirements for certain new or expanding data center customers requesting more than 25 megawatts of electricity demand.
Megawatts measure how much power a facility requires at a particular moment, rather than the total amount of energy it consumes over a month.
New Customers Can Commit to Long-Term Contracts
Some arrangements allow a data center to increase its electricity demand gradually as operations expand. Under certain rules, new customers must also commit to contracts lasting at least eight years.
Utilities and regulators still need to determine whether those payments cover the necessary infrastructure costs and whether the company can meet its contractual obligations.
Companies Can Also Support Microsoft’s Nuclear Power Deal
Companies can help address electricity demand by supporting additional power generation. Microsoft’s agreement with Constellation Energy supports the planned restart of the former Three Mile Island Unit 1 reactor in Pennsylvania, which the company now calls the Crane Clean Energy Center.
The Nuclear Reactor Shut Down for Economic Reasons in 2019
The reactor shut down for economic reasons in 2019. It is separate from the neighboring Unit 2 reactor, which suffered severe damage during the 1979 accident.
The agreement supports electricity generation, but it does not mean that a particular chatbot response receives power directly through a private wire from the reactor.
Nuclear Safety Inspections Must Continue
Nuclear regulators must carry out the required inspections and safety checks before a reactor can restart. They cannot skip these requirements simply because a company wants to launch a better chatbot.
If a company wants to launch its product sooner, it can shorten its keynote presentation. Nuclear safety inspections must still follow the required process.
Can Computing Wait Until Later?
Electricity demand changes throughout the day. A data center might consume large amounts of electricity over a year while placing especially heavy demands on the grid during peak hours.
If operators can move suitable computing tasks to periods when electricity demand is lower, utilities may find it easier to supply the facility.
Some Computing Tasks Can Wait or Move
Some computing tasks can wait or move to another time, while other services need to run continuously. Operators can schedule flexible tasks during periods when the electricity grid has more available capacity.
We Don’t Need to Give Every Delayed Image the Urgency of a Medical Emergency
If a non-urgent image-generation request has to wait until overnight, the horny cartoon will still be horny at midnight. We don’t need to give every delayed image the urgency of a medical emergency.
Moving Suitable Work Can Reduce Peak Electricity Demand
Moving flexible computing tasks can reduce demand during the busiest hours. However, this approach works only when operators can actually shift the work and coordinate the schedule with the electricity grid’s needs.
A Giant Investment Announcement Isn’t Enough
A large investment announcement does not automatically prove that a project will benefit households. Consumers and regulators should examine what the company plans to build, who will pay for the required infrastructure, and what the customer owes if its plans change.
What to Check on Your Electricity Bill
Start by checking how much electricity you used and the rate your supplier charged you. Then determine which figure changed and review what your electricity supplier or regulator says caused the increase.
Data centers pay their own electricity bills. The more important question is whether they cover the full cost of expanding the electricity system to accommodate them.
And Yes, This Video Uses an AI Voice
And yes, this video uses an AI-generated voice. Apparently, the absolutely essential computing is the computing I’m using. Everybody else’s prompts require a thorough public investigation.
I’ve Already Given It the Narration
I wanted to know who was paying for the machine that could take my job, and I’ve already given it the narration.
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