With household electricity bills on the rise, many Americans say they cannot afford the increase, and point to AI development as a major contributor.
A shocking 70% of households have seen their electricity costs rise over the past year, according to a survey from energy tech firm Arbor. Nearly two-thirds blame the high energy demands of AI, and only 20% of households say the benefits of the tech justifies the cost.
The data centers powering AI are creating an electricity shortage that drives up prices. The situation is particularly acute in the Northeast since the world’s highest concentration of data centers are in Virginia, but it’s a concern nationwide. Arbor’s survey polled 1,400 US households “using a census-balanced sample,” it says.
The US is scrambling to update the grid, and produce more electricity, lessening the shortage and driving down costs, but that could take years. In the meantime, Big Tech companies continue to pour hundreds of millions of dollars into data centers. Some facilities require as much electricity as a small city on their own. This year alone, US tech companies will spend up to $400 billion on AI infrastructure, or more than the Apollo program (inflation-adjusted), but compressed into a single year instead of a decade, Arbor says.
People are feeling personally burdened by the tech boom, and 71% say they can’t afford more than a $20 monthly increase. Others, about one in five respondents, say they can’t tolerate any increase at all. The group most concerned about rising costs are the 30- to 44-year-old crowd.
When faced with higher utility bills, most people turn to personal sacrifice, not political advocacy. They would first cut back energy usage at home (42%), reduce other spending (31%), and make energy-efficient upgrades (21%). Just 9% say they would advocate for systemic change.
“When asked what they would do if faced with a significant increase in energy costs, consumers painted a stark picture of sacrifice and strain,” Arbor says.
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Most people also don’t solely blame the government for the crisis. About a third (35%) say the responsibility falls on tech companies versus the government (30%), utility companies (25%), and other consumers (8%).
In fairness, residential electricity prices have been rising for years, and are up 40% nationwide since January 2021 (before the launch of ChatGPT in November 2022), Arbor says. However, AI data centers are exacerbating the issue significantly. In the Northeast, prices for grid provider PJM have spiked 11x in two years. Analysts attribute two-thirds of the increase to data centers.
The Trump administration is reopening coal plants “to power data centers to meet the electricity needs of AI and high-performance computing operations,” according to a January executive order. Last month, the administration put $625 million toward the coal industry, Fox News reports. But renewables may get the public more on board; 52% say they would be more supportive of AI growth if powered by clean energy.
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As a news and features writer at PCMag, I cover the biggest tech trends that shape the way we live and work. I specialize in on-the-ground reporting, uncovering stories from the people who are at the center of change—whether that’s the CEO of a high-valued startup or an everyday person taking on Big Tech. I also cover daily tech news and breaking stories, contextualizing them so you get the full picture.
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