Senators Probe Data Centers' Role In Surging Power Prices, Tech Sector Pushes Back

Democratic senators are launching an investigation into the impact of data centers on consumers’ electricity bills.

The probe is the latest indicator that data centers are emerging as a key issue in national politics heading into next year’s midterm elections, sending the tech and data center industries scrambling to make their case to an increasingly skeptical public.

In letters sent Monday to major tech firms and data center providers, a trio of Senate Democrats suggested that companies like Google, Meta, CoreWeave and Digital Realty are forcing utilities to spend billions of dollars on new power infrastructure but sticking regular consumers with the bill.

The senators say data center operators must pay a greater share of the upfront costs associated with infrastructure improvements to meet their energy needs, accusing the tech firms of utilizing “hard-nosed tactics” to secure lower power prices from utilities. 

Sens. Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland and Richard Blumenthal of Connecticut say the letter marks the start of their investigation into whether an unprecedented, artificial intelligence-driven boom in data center development is unfairly pushing up electricity costs for residential customers.

The lawmakers pressed the digital infrastructure giants for information about their energy consumption, agreements with utilities, and any plans in place to protect consumers from rising utility costs as a result of their data center build-out. 

“Utility companies have spent billions of dollars updating the electrical grid to accommodate the unprecedented energy demands of AI data centers and appear to recoup the costs by raising residential utility bills,” the senators wrote. “Through these utility price increases, American families bankroll the electricity costs of trillion dollar tech companies.” 

Vermont Sen. Bernie Sanders launched his own salvo Tuesday against data center development, announcing he will push for a moratorium on AI data center construction in the U.S.

In a video posted on social media, Sanders warned that a handful of the world’s wealthiest people are shaping policy around data centers and AI, arguing that pausing data center development would “give democracy a chance to catch up” with what he characterized as Big Tech’s “unregulated sprint” to build AI infrastructure. 

“This process is moving very, very quickly, and we need to slow it down,” Sanders said. “We need all of our people involved in determining the future of AI and not just a handful of multibillionaires.”

The proposed moratorium and Senate investigation reflect growing scrutiny of the data center industry by lawmakers at the federal level, particularly on the left side of the aisle. 

Democratic legislators, along with left-leaning interest groups across a range of issues, from the Sierra Club to the NAACP, are increasingly targeting data center development as a priority issue to engage voters ahead of midterm elections in which control of the House and Senate is at stake. 

In doing so, they are channeling cratering public opinion of data centers, rooted in fears about their role in rising power prices and concerns about their environmental impact.

For the past three years, data centers have been an increasingly central political flashpoint at the local and state level in the industry's major markets. Data centers’ growing profile on the political landscape was highlighted last month as policy governing the industry's growth emerged as a campaign issue in the gubernatorial race in Virginia.

Local and state-level data center policy debates have often cut across party lines, with opposition to major projects just as likely to be spearheaded by Republicans as Democrats. But at the federal level, the data center question is becoming more partisan. 

Democrats are drawing a contrast with the Trump administration, which has worked to facilitate the development of data centers and associated energy infrastructure as part of its AI strategy.

Still, anti-data center sentiment isn't exclusively coming from the left. Republican Florida Gov. Ron DeSantis proposed limits on data center development, while conservatives like Georgia Rep. Marjorie Taylor Greene and Missouri Sen. Josh Hawley have warned of the dangers of unrestricted data center build-out.  

The tech and data center industries are scrambling to respond to this emerging national political narrative that frames them as the villain. 

Hours after the trio of Democratic senators publicized their letter, Amazon published a study under the headline “Amazon data centers aren’t raising your electricity bills.”

Commissioned by Amazon, the report from research firm E3 concludes that Amazon data centers don't contribute meaningfully to rising power costs and instead contribute millions of dollars annually to fund grid improvements that benefit other electricity customers.

“First and foremost, Amazon pays for its own electricity costs — these expenses aren’t added to the bills of local residents or businesses,” Amazon wrote in a post announcing the report. “More surprisingly, our data centers in some regions actually pay more than the costs needed to power them.”

Amazon’s post is the latest effort in a sudden salvo of national messaging efforts from major tech firms and data center industry groups targeting the general public and lawmakers.

Meta has launched a major advertising campaign on television and streaming services, featuring residents of agricultural communities like Altoona, Iowa, and Los Lunas, New Mexico, describing how data centers have driven economic recovery. Meta has reportedly spent at least $5M on the campaign in the past month alone. 

Industry groups like the Data Center Coalition and the National Artificial Intelligence Association have ramped up their resources focused on lobbying federal lawmakers amid growing concern over the impact that an unfavorable political environment could have on the industry.

It remains to be seen how effective these efforts will be as data centers become less popular with the general public. 

“There’s a very bad connotation around data centers,” NAIA CEO Caleb Max told Politico. “And this is something that, frankly, the data center industry needs to figure out.”