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AI Data Centers Fuel U.S. Power Demand Surge and Trigger New Grid Pricing Rules

Ohio regulators are requiring large data centers to lock in fixed-rate energy commitments to curb grid upgrade costs for consumers.

Overview

  • In 2023 data centers consumed over 4% of U.S. electricity and the Department of Energy projects that share could climb to about 12% by the late 2020s driven largely by AI workloads.
  • Average residential electricity bills have risen roughly 30% since 2020, with local data showing typical Ohio households paying at least $15 more per month this summer because of new data-center load.
  • In July the Public Utilities Commission of Ohio approved American Electric Power’s proposal to create a data-center customer class requiring fixed-rate commitments for most of their energy use, setting a potential national precedent.
  • Major tech firms have increasingly invested in power generation assets and their subsidiaries have sold more than $2.7 billion worth of electricity on wholesale markets over the past decade.
  • In early August Google agreed to pause or reschedule non-urgent AI workloads when regional grids are strained, and tech companies have petitioned the Ohio commission for reconsideration of its new rate rules.