Three Democratic senators have launched a probe targeting seven major tech companies, demanding answers about whether AI giants are secretly passing their massive energy costs onto ordinary Americans.
Elizabeth Warren, Chris Van Hollen, and Richard Blumenthal are investigating Amazon, Google, and Microsoft as electricity costs have increased 267% over five years in areas near significant data center activity.
The investigation comes as research from Harvard Law School found utility companies are incentivized to pass rate hikes onto locals so they can offer discounted electricity rates for AI data center projects. Meanwhile, 70% of US households have seen their electricity costs rise over the past year, with many blaming the energy demands of AI.
The numbers behind your rising bills
The scale of this cost shift is massive. One data center customer can suddenly consume as much power as an entire city, according to the senators’ findings. Data centers are expected to account for 12% of the country’s power consumption by 2028, up from 4.4% just last year, according to the US Department of Energy.
The brutal mathematics work against consumers twice: prices increase when utility companies build extra infrastructure to meet data centers’ energy demands, and they increase again when demand outweighs local power supply.
Since 2021, electricity prices have already risen 30% nationally, with nearly 80 million Americans struggling to pay their utility bills.
Shell companies and NDAs
The senators discovered AI firms are using extraordinary tactics to hide their energy deals from the public. Companies “ask public officials to sign non-disclosure agreements preventing them from sharing information with their constituents, operate through shell companies to mask the real owner of the data center, and require landowners to sign NDAs,” the senators wrote.
Some residents are blindsided by higher bills without even realizing a data center project was approved in their area. The contracts between data centers and utility companies are almost always confidential, leaving communities in the dark about deals that will spike their monthly bills.
Amazon publicly claimed it would “make sure” costs wouldn’t be passed on to customers. Yet the company belongs to the Data Center Coalition, an industry lobbying group that “has opposed state regulatory decisions requiring data center companies to pay a higher percentage of costs upfront,” senators noted.
Cross-state contamination spreads the damage
The problem spreads beyond states hosting these massive facilities. States like Virginia, which has the highest concentration of data centers globally, could see average electricity prices increase another 25% by 2030. But interconnected power grids mean a data center built in one state can raise costs for residents of neighboring states.
Data from the PJM electricity market shows capacity prices surged from $2.2 billion for 2024-2025 to $14.7 billion for 2025-2026—a more than 500% increase. Data center demand accounted for $9.3 billion of that spike, meaning 63% of the total power capacity bill.
Price jumps are already hammering consumers. Virginia saw prices surge 13%, Illinois jumped 16%, and Ohio increased 12% over the past year. New Jersey residents faced roughly 20% year-over-year increases, all linked to data center demand in the regional grid.
The deadline approaches fast
Senators gave the seven targeted companies until Jan. 12 to provide detailed answers about their electricity arrangements, energy usage projections through 2030, and steps taken to prevent passing costs to neighbors. They want specifics about “tax deductions or other financial incentives” received from governments and details about lobbying expenditures for data center projects.
The probe appears designed to lay groundwork for legislation protecting consumers from subsidizing Big Tech’s energy-guzzling AI ambitions. “The current, socialized model of electricity ratepaying was not designed for an era where just one customer requires the same amount of electricity as some of the largest cities in America,” senators explained.
Already, Utah, Oregon, and Ohio have passed laws creating separate utility customer classes for data centers with upfront payments and longer contract requirements. Virginia is weighing similar legislation as electricity costs become a major political issue.
Bills, bills, bills
Energy experts predict the situation will deteriorate before it improves. The International Energy Agency projects worldwide electricity demand from AI data centers will more than quadruple by 2030. In the US, data centers are on course to account for almost half of electricity demand growth through 2030.
One study estimates data centers and cryptocurrency mining could lead to an 8% increase in the average US electricity bill by 2030. This comes as electricity prices have already climbed dramatically from their traditional patterns.
The senators’ investigation represents a critical moment for determining whether tech companies will bear the true costs of their AI ambitions or continue passing the bill to families already struggling with rising energy costs. With responses due next month, the tech industry faces mounting pressure to prove they’re paying their fair share rather than socializing costs while privatizing profits.
Meanwhile, President Trump has launched the US Tech Force to accelerate AI adoption across government, partnering with top tech companies and federal agencies.
