Why energy bills could be AI’s new political problem

Summary

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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.

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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)

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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.”

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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

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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.

Transcript

[A]

Hey, welcome back to POLITICO Tech. I'm your host Stephen Overle. And on this show, I break down tech politics and policy with the people shaping our digital future. By now you've heard the results of Tuesday's election. Democrats logged big wins in Virginia, New Jersey, and New York City. And there were many reasons why, including anger toward President Donald Trump and and the record long government shutdown. But in some races, there was another factor at play, artificial intelligence. And specifically all of the energy that data centers are going to consume and whether taxpayers will foot the bill. See, tech companies are spending billions of dollars to build out AI infrastructure. And so far, the Trump administration has been hyping them up. That's expected to cause huge surge in energy demand. And Tuesday's outcome suggests there could be new political roadblocks ahead. Ian Stevenson from POLITICO's E&E News has been tracking this issue in Virginia, where Democrat Abigail Spanberger was elected the state's first female governor. Ian joins me today to explain what happened and what's to come. Here's our conversation. Ian, welcome to POLITICO Tech.

[B]

Thanks for having me.

[A]

So Democrat Abigail Spamberger won the Virginia governor's race. And on the campaign trail, she talked often about energy costs and often about AI data centers. What has she promised to do here?

[B]

Yes. So Spanberger has been running broadly on a platform of affordability and the high cost of living. Virginians have seen sharp rises in the power bills in recent months, 6.7% in Virginia and other southeastern states over the last 12 month period through last August. So she was focusing on the campaign trail on power bills and on bringing costs down for Virginians. And so she hasn't made explicit what all of her plans are, but she's focused on a line that she keeps repeating on the trail, or kept repeating on the trail, was that data centers should pay their fair share. And there are a lot of concerns from voters in the state at the moment that the high demand for power that the AI boom is causing will cause their power bills to increase. And so Spanberger has been focusing on that. And she's also said that there's a rate case before the public utility in Virginia, the public utility regulator in Virginia, where they're considering making a separate rate category for data centers and other large power producers. And she's been sort of watching that case closely and said that there may be legislative intervention once that case is decided, depending on what the outcome is.

[A]

Got it. So it sounds like a lot that is pending in terms of what she'll actually do and what pay their fair share means. I can only imagine tech companies feeling a bit of anxiety about that. But if that's where we're potentially headed, I do want to talk about how we got here. Like, how did this become a salient political issue?

[B]

Yeah. So there are in, you know, I think Virginia is a really good place, an interesting place to look at this topic. 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. And it's causing this kind of, I think, bubbling concern and anxiety amongst a lot of voters who are just worried about land use from data centers or water use. Rising power costs, of course, as the boom in data centers brings more demand for energy and more demand for power. So this year in the state legislature, there were a number of bills brought forward by lawmakers to potentially regulate data centers. And there were a number of candidates also running for legislative seats in Northern Virginia campaigning specifically on trying to limit data centers, restricting how close they could be to homes, how close they could be to schools. And we've seen some local politicians in counties in Virginia also start to push back on data centers. And so I think Spamberger clearly has been, you know, watching this space, and I think that it's an issue for a lot of voters in Northern Virginia, and that sort of brought it to the fore as we headed into this gubernatorial race.

[A]

Got it. Sounds like a lot of not in my backyard arguments to some degree. I mean, it is hard to overstate just how many data centers there are in Virginia. I mean, so much of the countries Internet traffic flows through Northern Virginia. A lot of people don't even realize that. I guess one question in my mind is like, to what degree are these talking points, like this idea that AI and these data centers are actually driving up energy cost at this moment? Like, is there proof of that or is to some degree this like a convenient political boogeyman?

[B]

Yeah, so that's a great question. I talked to an energy analyst at the University of Virginia, and he told me that 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 it does seem pretty clear that going forward, and there's a projection out there that electricity sales could double by 2040. So we're talking about really gargantuan potential increase in energy use. It's pretty clear that this kind of short term bump in energy demand is going to raise power costs for everybody. It's just sort of a simple supply and demand question. You have a lot more demand, prices go up. I think that part of it, that we're going to see incremental or larger cost increases in the future for all consumers and for residents is true. I should say, and point out though that it's a complex question in Virginia and I think elsewhere in the country too, because while northern Virginia has seen a concentration of data centers, lots of parts of the southern part of Virginia would love to see data centers come in potentially, or at least local politicians there are still much more open to data centers because they bring a lot of tax revenue and they help fund schools, they help fund lots of local infrastructure needs. It's a complex question and it's not as if there's a unified opposition in the state to data centers at all.

[A]

Yeah, that's a really interesting point and one frankly that I think, or I could easily see the tech industry, probably the energy industry trying to exploit a little bit because we already see, I can tell you from the tech industry standpoint, you know, 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. At the same time, though, as you said, AI is going to cause this surge of energy demand. Everyone, including the tech industry, is anticipating that. And so I do think that argument is going to get harder to make. It is worth noting. I mean, we're talking about Virginia. It wasn't the only state where energy was on the mind of voters this week. Did we see AI power concerns emerge in any of the other elections?

[B]

Yeah, so I think definitely we saw the cost of living, the price of energy be a major concern around, around the country. And I think we saw in races where Democrats focused on energy and affordability as a major campaign topic, they won pretty big on Tuesday. So for instance, in New Jersey, Mikey Sherrill, the Democratic candidate for governor there, she talked about declaring a state of emergency around electricity costs, utility rates. In Georgia, Democratic candidates for the state regulator of electricity won also for the first time in many years, of course, in New York, Zoran Mamdani focused a lot on affordability issues. And so I think that going forward, and I've talked to some Democratic analysts following up on the election who are happy about the results. I think they feel like 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. And I think it'll depend a lot of these candidates will tailor their messages to their states. Some will focus on climate change and a need to curb emissions and relate that to affordability, building more clean, renewable power. Others will really just focus on the costs. But I think after Tuesday's results, it seems clear that affordability was a winning message and really resonated with a lot of voters.

[A]

Yeah, I was going to say, I mean, the 2026 prognosticating has already begun in a lot of ways, even though we're only a few days out from this election cycle. And it does seem like people are already looking at Virginia and New Jersey in particular as blueprints for how in swing states or states that maybe Trump won narrowly, perhaps Democrats can pick up some seats.

[B]

Yeah, and I mean, that all, of course, remains to be seen and will depend on, I think, a lot of it. You know, I think it's still clear that Democrats are also running on running against Trump and in a lot of ways, running against the Trump administration. And so it'll depend on the states where they're running, how they craft their messages. But I think energy is likely to be a big part for a lot of candidates.

[A]

I wonder what this means for the energy industry, for the tech industry, because right now they are trying to roll out more data centers. They are trying to roll out all of these energy projects. And the results from Tuesday suggest that they now need to worry about political backlash to that. I mean, are you hearing any reaction to these results?

[B]

Not specifically from tech companies, but I do think there's been a lot of, you know, debate about what energy policy in different states should be on the Republican side, especially at the state level. You know, some officials are focusing on, we need all of the above energy strategy. We need, we need to expand natural gas and fossil fuel use and also renewable power. On the Democratic side, there's a lot of focus on transitioning, of course, away from fossil fuels and power generation. And there's also a blame game going on, of course, about pointing fingers at the transition to clean energy is causing electricity prices to rise, or on the flip side, the Trump administration's de emphasis and pulling funding from renewable energy projects, similarly raising prices. I think that's all something that's likely to be in the mix as campaigns continue into the next year.

[A]

You mentioned the Trump administration, and a lot of the enthusiasm around artificial intelligence is coming out of The Trump administration these days, and particularly there's incentives to build AI data centers because there's such a need for them to. There are efforts to try to streamline permits for energy projects. Do these election results suggest that we could see some new roadblocks, you know, coming out of states, because there has been some of this backlash, some of this anxiety among voters about what these projects will mean for their energy bills?

[B]

Yeah, I think that, I think that clearly in, in some states that have seen a lot of data centers, in particular Virginia, there's some angst from local lawmakers there who are concerned about data centers and are looking to regulate them. And so far they haven't been successful. Most of those bills that they introduced this legislative session were not successful. But with Spamberger now entering office, that could potentially change. And depending on what happens with this rate case in Virginia, she could be more open to regulations. Similarly, in New Jersey, the winner there, the Democrat, Mikey Sherrill, she seems really focused on this issue. And so I think 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.

[A]

We're talking all about these energy issues and particularly AI But I mean, for perspective here, like, how defining of an issue was this, this election cycle, especially considering we are sort of in an off year. You know, this isn't your sort of typical high turnout election.

[B]

Yeah, I think, I mean, I actually just talked to a analyst in Georgia and he was sort of saying, he was sort of cautioning, like this is a off your race there. A lot of rural voters were not voting, so Democrats really did really well. But, and it's likely because of energy issues that they did do well. But it's, it's not like Democrats are going to win in landslide races in Georgia now because of it's, it's sort of, 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.

[A]

Got it. It's been a fascination of mine, frankly, since we started this podcast, how AI issues will eventually become electoral issues because people point to privacy, they point to job loss, they point to all of these concerns around AI And 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. Listen, Ian, thanks for being here on Politico Tech.

[B]

Thanks for having me. I appreciate it.

[A]

That's all for this week's Politico Tech. If you like the show, go ahead and subscribe and recommend it to a friend or colleague. And for more tech news, subscribe to our newsletters, Digital Future Daily and Morning Tech. Our producer is Nirmal Maliko. Pran Bandy made our theme music. I'm Stephen Overlea. See you back here next week, Sam.