AI Data Centers Are Hiking Electricity Costs in Some States as Expert Warns ‘There’s So Much More to Come’

Residents are grappling with increased electricity prices as nearby AI data centers come online.

In Baltimore, Nike Carstarphen saw her electricity rate go up 20% in the span of a month, even though she was using 40% less electricity because she’d stopped turning on her air conditioner, CNN reported. Her utility company, Baltimore Gas and Electric (BGE), had prices increase by $32 per month on average in September, according to the outlet. The larger electricity cost is primarily due to new data centers in northern Virginia.

“We shouldn’t be subsidizing [the AI companies],” Carstarphen told the outlet. “They have enough money.”

The woman isn’t alone. Amidst an AI boom, massive data centers are being constructed across the country, bringing jobs and revenue to communities, but also drawbacks. The impact is reverberating from northern Virginia, currently the largest data center market in the world, according to a report from the Joint Legislative Audit and Review Commission (JLARC). The region houses 13% of “all reported data center operational capacity globally.” 

The consequences are already being felt by residents in neighboring Maryland and Washington, D.C., with BGE consumers seeing the increased costs distributed over lower-usage months, CNN reported.

The additional cost doesn’t appear directly on electricity bills, and is instead hidden in electricity supply charges, according to the report. (Data centers are not the only factor in higher electricity prices. A recent study featured in The Electricity Journal found that a variety of factors, including natural disasters “contributed to sizable price increases in some states,” as well as shifts in natural gas prices.

There are two reasons data centers are driving up residential electricity costs in the region: the great need for electricity and the new infrastructure that’s required to deliver it, according to CNN. 

A 2024 report from the U.S. Department of Energy found that data centers used approximately 4.4% of total U.S. electricity in 2023, and are expected to consume about 6.7 to 12% of U.S. electricity by 2028. 

The hike in electricity prices is “the tip of the iceberg,” Marina Domingues, the vice president of U.S. New Energies at the Rystad Energy research firm, told CNN. “There’s so much more to come because of that increased need for power and upgrades.”

While the JLARC report found that data centers are currently covering the electricity costs for which they’re responsible, the sites’ huge demand for energy “will likely increase system costs for all customers, including non-data center customers.”

“A large amount of new generation and transmission will need to be built that would not otherwise be built, creating fixed costs that utilities will need to recover,” the report said, adding that it will be hard to meet the growing demand from data centers. Utility companies may also rely more on imported power, making them potentially more impacted by increases in energy market prices, according to the report. 

In a report for her company, Domingues estimated that the total impact of data centers on consumer costs won’t be fully felt until 2030. 

“If the energy transition and growth of data centers are expected to be globalized, these growing pains will only increase in complexity as they are applied to less resilient power grids and markets,” Domingues wrote.

The data centers have already influenced voters during recent elections. In Virginia, Virginia Gov.-elect Abigail Spanberger won after she campaigned on the promise that she’d make the owners of data centers “pay their own way and their fair share” of increasing utility costs, according to CNBC. And in New Jersey, Mikie Sherrill won her race for governor after she pledged to declare a state of emergency over the cost of electrical bills.

While there has been a push to ensure that data centers cover the full brunt of the costs they’re responsible for, some companies have emphasized that they’re already doing so and want to protect local consumers’ prices, CNN reported.

“Microsoft pays for the electricity we consume and for our share of infrastructure costs to generate and deliver that electricity to our sites,” a Microsoft spokesperson told PEOPLE in a statement.

“We support the work of utilities and regulators to make sure these costs are transparently calculated and assigned to us and the other customers who benefit from those investments,” the spokesperson said. “This work helps ensure that our neighbors and the local community do not pay for our share.”

Never miss a story — sign up for PEOPLE’s free daily newsletter to stay up-to-date on the best of what PEOPLE has to offer, from celebrity news to compelling human interest stories.

According to the CNN report, Maryland and D.C. are part of PJM Interconnection, a regional grid operator, that is one of many players in the industry preparing for the future — and that type of energy need comes with a big price tag. Since 2023, PJM has proposed at least $11 billion in infrastructure improvements, mainly in preparation for new data centers.

PJM, Amazon and other companies with data centers in northern Virginia did not immediately respond to PEOPLE’s requests for comment.

For locals like Carstarphen, the effects are already being felt.

“You’re trying to be more efficient. You even buy more efficient stoves and refrigerators and air conditioning systems,” she told CNN. “You feel like you’re doing the right thing, but there’s no reward.”