Episode Overview

POLITICO Tech — “Why energy bills could be AI’s new political problem”
Host: Stephen Overly
Guest: Ian Stevenson (POLITICO’s E&E News)
Date: November 6, 2025

This episode explores how the rapid expansion of AI and the proliferation of data centers are creating new political flashpoints around rising energy bills. Host Stephen Overly and reporter Ian Stevenson break down voter concerns from the recent election cycle, centering on Virginia’s gubernatorial contest, where energy affordability and AI’s role in demand became key campaign issues. The discussion widens to examine how these themes played out in other states, their impact on political strategy, and what the future might hold for both AI infrastructure and energy policy.

Key Discussion Points and Insights

The Election and AI’s Role in Energy Concerns

• Virginia’s Gubernatorial Race:
  • Abigail Spanberger, the Democratic candidate, campaigned on affordability and high cost of living, with a specific focus on energy costs linked to AI data centers.
  • Voters have seen a 6.7% rise in power bills in Virginia and surrounding states in the previous year, fueling concern (01:44).
  • Spanberger emphasized that “data centers should pay their fair share” and is monitoring a rate case considering a separate utility rate category for data centers (01:44–03:01).
• Local Backlash:
  • Northern Virginia, a global data center hub, is experiencing community resistance related to land use, water use, and energy demand from data centers (03:19).
  • Local politicians have pushed bills to regulate data centers, including restrictions on proximity to homes and schools, reflecting a classic “not in my backyard” dynamic (03:19–04:34).

Are Data Centers and AI Actually Raising Energy Prices?

• Evidence and Projections:
  • Direct proof that AI and data centers are driving current utility rate hikes remains limited, according to an energy analyst from the University of Virginia (05:08).
  • However, “electricity sales could double by 2040,” pointing to likely future cost increases for all consumers due to surging demand from data centers (05:08).
  • The discussion acknowledges regional divides: northern Virginia wants to limit data centers, while southern parts see them as opportunities for tax revenue and infrastructure development (05:08–06:35).
• Industry Finger-Pointing:
  • Tech companies often claim AI isn’t to blame for rising energy costs, instead pointing to climate policies and other industries.
  • Overly observes: “A lot of finger pointing about, well, actually rising energy costs are not the fault of AI. They point to climate policies, they point to all sorts of other industries or policies to blame.” (06:35)

National Energy Anxiety and Democratic Strategy

• Affordability as a Winning Message:
  • In New Jersey, candidate Mikie Sherrill declared a state of emergency over utility rates; in Georgia and New York, Democrats foregrounded the cost of living and energy prices (07:25–09:00).
  • Democratic analysts see success in focusing campaigns on affordability, predicting more candidates will emphasize energy costs — sometimes linking them to climate, sometimes focusing just on cost (07:25–09:00).
  • Overly notes, “People are already looking at Virginia and New Jersey, in particular, as blueprints for how … perhaps Democrats can pick up some seats.” (09:00)

Expected Industry Reaction and Policy Trends

• Industry Anxiety and Policy Uncertainty:
  • Tech and energy sectors now face emerging political backlash; results signal that future large-scale energy and AI projects may encounter stricter scrutiny or regulation in swing and blue-leaning states (10:04–11:20).
  • Partisan divides persist, with “all of the above” energy strategies favored by Republicans versus Democrats pushing for renewables and transitions away from fossil fuels (10:25).
• Prospects for New Roadblocks:
  • Spanberger’s win may increase momentum for regulating or segmenting data center energy rates in Virginia.
  • Elsewhere, Democratic gubernatorial winners (like Mikie Sherrill in NJ) also signal possible tightening of state-level oversight on energy-hungry tech infrastructure (11:52).
  • Stevenson: "It's definitely the case that we'll potentially be seeing changes in policies in different states who are worried about this issue and who are trying to limit the cost increases for their residents." (12:32)

The Broader Political and Electoral Context

• AI Enters Elections, but Affordability Dominates:
  • For the first time, energy demand related to AI became material in multiple races, though overall impact is intertwined with broader cost of living anxieties (13:01–13:38).
  • Stevenson cautions against overgeneralizing results from off-year, lower-turnout elections. “It’s the cost of energy that is of course going to be related to AI, but it’s more the cost of energy and then even more so the cost of living generally that they're picking up on as a salient issue for voters.” (13:01)
• AI’s Unexpected Political Headline:
  • Overly observes: “I wasn’t really betting on energy being the first one to sort of really show up in elections, but here we are. Fascinating to see.” (13:38)

Notable Quotes & Memorable Moments

• On Spanberger’s Messaging:
  • Ian Stevenson (02:01): “She’s focused on a line that she keeps repeating on the trail … that data centers should pay their fair share.”
• On Data Centers’ Expansion:
  • Ian Stevenson (03:19): “There are hundreds of data centers in the state. It’s really the data center hub of the country and probably the world. And people who live in Northern Virginia are starting to feel that and starting to see that around them.”
• On the Complexity of Blaming AI for Energy Prices:
  • Ian Stevenson (05:08): “It’s really too soon to say whether energy prices in the state so far have been rising due to AI and due to data centers specifically. But … electricity sales could double by 2040.”
• On the National Democratic Strategy:
  • Ian Stevenson (07:47): “I think that going forward ... affordability and a focus on energy prices is something that they’ll—a lot of candidates running on the Democratic ticket for governor in 2026—a lot of them might be focusing similarly on affordability issues.”
• On AI as a Political Issue:
  • Stephen Overly (13:38): “It’s been a fascination of mine, frankly, since we started this podcast, how AI issues will eventually become electoral issues... I wasn’t really betting on energy being the first one to sort of really show up in elections, but here we are.”

Timestamps for Important Segments

• [01:32] — Spanberger’s campaign and proposals on data centers and energy bills
• [03:19] — Why Virginia is central: Local backlash and community concerns
• [05:08] — Projections on future energy demand and nuanced regional perspectives
• [07:25] — How energy cost messaging played out in races beyond Virginia
• [09:00] — How the 2026 electoral cycle may be shaped by these issues
• [10:04] — Industry perspectives and expected political/legislative roadblocks
• [12:42] — How central was the AI-energy issue in these elections?
• [13:38] — Reflections on AI’s first real electoral test via energy affordability

Conclusion

This nuanced, forward-looking conversation demonstrates the rapid shift of AI’s presence from a backroom policy issue to an everyday political concern, primarily through the lens of energy prices and affordability. The Virginia election serves as a microcosm for debates erupting nationwide, with implications for 2026 campaigns, energy policy, and the tech sector’s public standing. The episode underscores the complexity—and inevitability—of AI infrastructure pushing its way into mainstream political discourse, likely with energy bills leading the charge.