Electricity Bills Increase – Blame A.I., Need Regulations
“Five of the anticipated facilities serving OpenAI (in California) could collectively use more electricity than three million households,” from a report from the California Senate Committee on Energy, Utilities and Communications.
“Across California, energy-intensive data centers are being built to support the rapid expansion of the artificial intelligence (AI) industry. These data centers increase energy demand and frequently require expansions to the electrical grid; together, these factors threaten to increase energy costs for Californians.” When this occurs, utility companies can seek approval to pass on the costs of electricity production and infrastructure upgrades to ratepayers.
Pacific Gas and Electric (PG&E) reported that its data center power demand swelled from 5.5 GW in February 2025 to 10 GW by late July 2025. According to the California Energy Commission, data center consumption accounted for 2.6% of the state's electricity demand in 2023, and that figure is projected to grow significantly.
In Santa Clara, where data centers consume 60% of the municipal utility's power, a 5% rate increase was implemented to fund "critical infrastructure projects."
Data centers can exacerbate costs during peak demand periods. When the grid is already stressed, utilities may have to rely on expensive backup generators, often powered by fossil fuels, to avoid power outages.
The major issue is that no system has yet been developed to adequately and fairly divide the increased infrastructure costs on the basis of who uses the electricity produced from this investment. Development of A.I. driven technology is rapidly becoming the “elephant in the room” driving the need for electricity infrastructure development and resultant huge costs.
While giving lip service to fairness, tech industry lobbyists are quietly exerting pressure on utility providers to pass on much of these added infrastructure costs to residential and smaller business customers. After all, utility providers love data centers for their ever growing and constant need for power. It’s a better business model than the on-again-off-again daily pattern of historical residential and business users. Many utilities will listen when their biggest, most reliable customer speaks. Legislation is desperately needed to control this injustice.
California lawmakers have proposed legislation like AB 222 and SB 57 to prevent ratepayers from shouldering the costs of data center energy expansion. The status of these bills is:
California Assembly Bill - AB 222 (2025–2026 session)
Status: In the Senate, the bill was placed on the suspense file by the Appropriations Committee on August 18, 2025. It is pending a decision on whether to proceed.
Primary focus: Addresses the energy consumption of data centers, specifically those used for developing and operating artificial intelligence (AI) systems.
Action needed - In California's legislative process, being "placed on the suspense file" is a process where bills with significant financial impacts are held for further consideration, often resulting in the bill's death if not advanced by the committee. This procedure is a way for the committee to manage and potentially eliminate bills with substantial costs, sometimes without public debate. Time to reach out to our Assembly representative – Sade Elhawary – district office phone number (213) 744-2111 or Sacramento office (916) 319-2057.
California Senate - SB 57 (2025–2026 session)
Status: In the Assembly, the bill was read a second time and re-referred to the Appropriations Committee on July 14, 2025. A hearing was scheduled for August 20, 2025.
Primary focus: The "Ratepayer and Technological Innovation Protection Act" requires the Public Utilities Commission to establish special tariffs for data centers to prevent cost shifts to other electrical utility customers.
Action needed – Reach to our Senate representative – Lola Smallwood-Cuevas – district office phone number (213)745-6656 or Sacramento office phone number (916) 651-4028.
Without thoughtful governmental regulation, rich and powerful tech companies will have a leg up on all of us in the control of who will ultimately pay these costs. Local government and industry have to develop a plan here or big injustices are coming. It is time to speak up!
(Research for this article includes material from “Big Tech’s A.I. Data Centers are Driving Up Electricity Bills for Everyone,” By Ivan Penn and Karen Weise)