Overview

• Residents near new AI data centers report higher electricity bills as local demand surges and wholesale markets tighten, according to recent reporting.
• A Bloomberg-cited analysis reports wholesale power prices in some affected areas have increased by up to 267% over five years.
• Severin Borenstein explains that rapid load growth can push up wholesale prices and that poorly structured grid expansions risk shifting costs to other customers.
• He argues rates could fall over time if large loads avoid discount deals, contribute to fixed system costs, and curb consumption during the few peak hours that drive scarcity.
• Some operators are turning to on-site generation, including xAI’s gas turbines and Elon Musk’s plan to deploy a transported power plant, which may ease grid pressure but raises environmental concerns.