What Are AI Data Centers Doing To Your Electric Bill?

Summary

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Episode Overview

Title: What Are AI Data Centers Doing To Your Electric Bill?
Podcast: Short Wave (NPR)
Date: December 3, 2025
Hosts: Emily Kwong, joined by reporter Dan Charles
Expert Guest: Mike Jacobs, Union of Concerned Scientists

This episode explores how the rapid growth of Artificial Intelligence (AI) data centers across the U.S. is driving up electricity demand—and examines who bears the cost of powering them. Through vivid reporting from “Data Center Alley” in Virginia and interviews with grid specialists, the hosts unpack a quietly unfolding policy debate: Should ordinary utility customers subsidize the infrastructure needed by big tech, or should data centers foot the bill themselves?

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Key Discussion Points & Insights

1. Setting the Stage: Data Centers’ Rising Energy Appetite

• [02:00–02:44]
  Dan Charles visits “Data Center Alley” in Loudoun County, VA, painting a picture of massive, seemingly empty buildings fed by rows of enormous power lines—“rivers and rivers of electricity.”

  • "There is not a person in sight but I'm seeing these enormous enormous buildings... along the road, these enormous power lines... so much electricity flowing into this place, like rivers and rivers of electricity.” — Dan Charles (02:20)

• [02:50–03:07]
  Hosts cite a recent analysis projecting U.S. utility bills could rise 8% generally—and up to 25% in Virginia—by 2030 due to data centers and crypto mining.

2. The Grid Geek’s Revelation: Who Pays?

• [03:18–03:50]
  Mike Jacobs of the Union of Concerned Scientists describes how utilities build new power lines for data centers—and these extra costs are absorbed by regular electricity customers, not data center companies.

  • “The data centers themselves don’t have to pay extra to get connected... guess who’s really paying the bill for this?” — Dan Charles (04:10)
  • “All the consumers of Virginia are subsidizing the business plans of these data center companies, which I would say is morally wrong and bad policy.” — Mike Jacobs (12:11)

• [04:08–04:35]
  Mike is outraged regular customers foot the bill for infrastructure serving lucrative tech businesses:

  • “I saw a bunch of [new transmission lines] being built to supply data centers and... the data centers were getting these connections pretty much for free... It just gets your hackles up.” — Mike Jacobs (04:35)

3. Massive Investment—and Growing Policy Tensions

• [07:08–08:16]
  Digging into utility filings, Mike finds Dominion Energy (serving most of Virginia) plans dozens of new data center hookups; other Mid-Atlantic utilities are similarly engaged.

  • “In this one document from 2024, a couple of dozen projects just in Virginia... One-hundred-thirty projects for data centers, costing in total over $4 billion.” — Dan Charles (07:54)

• [08:34–09:44]
  Dan reports from Fairfax, VA, at the site of a future data center—a space the size of 8 football fields. New power lines and substations for this single data center are expected to cost $40 million.

4. Utilities’ Viewpoint: Is This Good for Everyone?

• [09:54–10:31]
  Dominion Energy spokespersons argue new power lines built for data centers also make the grid stronger and more reliable for all customers:
  • “It’s not just the data centers—it's our hospitals, your schools, your churches, residents... But the data center is largely driving the need for this project.” — Dominion Energy representatives (09:54–10:04)

5. How Costs Get Passed On: The Regulated Monopoly Model

• [10:38–11:20]
  Utilities like Dominion are regulated monopolies. When they make infrastructure investments, rates go up so they can recover those costs and keep a profit.

  • “So when Dominion spends more money building new power lines for data centers, that extra cost translates directly into a little boost in the rates that everybody pays.” — Dan Charles (11:14)

• [11:25–12:11]
  Quantifying the impact is tricky and regional, but evidence suggests household bills may rise by at least several dollars a month in areas dense with new data centers.

6. Disparities in Who Pays: Data Centers vs. Renewables

• [12:23–13:23]
  Mike highlights a glaring discrepancy:
  • Renewable projects (solar/wind farms) must pay upfront for new grid connections.
  • Data centers don’t; their connection costs are spread across all ratepayers.
    • “If you are a solar or wind farm generating electricity, you have to pay for the power lines... If you are consuming electricity... you don’t have to pay for that upgrade—instead, everybody gets a rate increase tacked onto their bill.” — Emily Kwong (13:04)

7. Momentum for Change: Policy Proposals and Pushback

• [13:35–14:11]
  The rules could change. The Trump administration—despite vocal support for AI—has called for a federal rule requiring data centers to cover their own grid connection costs, though it’s unclear if such a rule will override state regulatory authority.
  • “Just a few weeks ago the Trump administration actually called for a new federal rule that would require new data centers to pay the costs involved in connecting them to the grid.” — Dan Charles (13:53)
  • “They’re asking for the right thing, so we got a nice little fight unfolding over this very problem.” — Mike Jacobs (14:11)

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Memorable Quotes & Moments

• “There is no such thing as a free power line.” — Dan Charles paraphrasing an economist (04:10)
• “This isn’t right... All the consumers of Virginia are subsidizing the business plans of these data center companies, which I would say is morally wrong and bad policy.” — Mike Jacobs (12:11)
• “If you are a solar or wind farm generating electricity, you have to pay for the power lines... but if you are consuming electricity, like you’re a customer, a big data center, you don’t have to pay.” — Emily Kwong (13:04)
• Regarding new policy: “It was kind of a shock because the Trump administration has been very enthusiastic about AI... They’re asking for the right thing, so we got a nice little fight unfolding over this very problem.” — Dan Charles & Mike Jacobs (14:11)

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Timeline of Key Segments

| Timestamp | Segment Description | |------------|---------------------------------------------------------------| | 02:00–02:44| Arrival at “Data Center Alley” in VA; energy demands described| | 02:50–03:07| National predictions for rising electric bills | | 03:18–04:35| Grid geek Mike Jacobs describes hidden costs and inequity | | 07:08–08:16| $4 billion in planned investments to serve new data centers | | 08:34–09:44| Field reporting from future data center site in Fairfax, VA | | 09:54–10:31| Dominion: new lines benefit all, not just data centers | | 10:38–11:20| Utilities as monopolies—costs and profits explained | | 12:11–13:23| Renewables vs. data centers: who pays connection costs? | | 13:35–14:11| Trump administration pushes for data centers to pay their share| | 14:11–14:24| Forecast of upcoming policy and regulatory fights |

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Conclusion & Further Resources

Dan Charles reports that the fight over who pays for the AI revolution’s electricity infrastructure is only just beginning—policy, fairness, and big money are all at stake.
Emily points listeners to earlier Short Wave episodes on the environmental impact of data centers (see show notes).

Produced by: Burley McCoy
Edited by: Rebecca Ramirez
Fact-checked by: Tyler Jones
Audio Engineering: Jimmy Keeley
Senior Vice President of Podcasting: Beth Donovan

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This summary omits fundraising appeals and sponsor messages to focus on the episode’s content.

Transcript

[A]

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[B]

Com hello there short waivers emily kwong here with a quick word before the show so this week is giving tuesday that is the global day of generosity that npr celebrates every year but this year is different because it is the first time in fifty years that npr is operating without federal funding that is a huge deal and a big challenge but it is one that we can take on together at shortwave we bring you science coverage that is fun human that introduces you to new ideas amazing discoveries and everyday mysteries that helps you feel a little more connected to this planet and the people we share it with we know all of this matters to you and that is why some of you have already stepped up to share in the cost of bringing you shortwave each week like gloria a listener in texas who says i would be less informed thoughtful and interesting without fresh air throughline shortwave and up first i love these programs and i hope they continue we are so grateful to listeners like gloria who have stepped up to support npr they this year you can join them sign up for npr and mark giving tuesday this is a simple recurring donation that gets you perks to npr's podcasts join at plus dot npr dot org thanks again for your support here's the show you're listening to short wave from npr hi short wavers emily kwong here with npr alum now independent science writer one of our favorite reporters on the planet dan charles oh you.

[C]

Make me all choked up hi emily.

[B]

Hey dan okay you've brought us basically a mystery novel something about money and.

[C]

Power electric power i took a field trip the other day emily and i made you a little audio postcard so here i am in data center alley northern virginia loudoun county and i'm standing along the road and there is not a person in sight but i'm seeing these enormous enormous buildings and along the road there are these enormous power lines steel towers with wires hanging from them there is so much electricity flowing into this place like rivers and rivers of.

[B]

Electricity yes these are the buildings that are full of computing equipment and are seeing a rapid increase in construction to power ai you've been poking around in.

[C]

Them huh well the specific thing i've been looking into is what is this doing to my electric bill yeah that's.

[B]

A real concern i was just reading there is this analysis from carnegie mellon university and north carolina state university found that electric bills are on track to rise an average of eight percent nationwide by twenty thirty and as much as twenty five percent in places like virginia because of data centers and cryptocurrency mining.

[C]

Now some of those forecasts are a little speculative they're based on models of future electricity markets but i found a guy who showed me how this is actually playing out right now i'm mike.

[D]

Jacobs i work at the union of concerned scientists and transmission topics are what.

[C]

I do here when he says transmission he means electricity transmission power lines substations full of massive pieces of equipment called transformers this whole incredible network we call the electrical grid he's a grid geek so he sees things that go right by most people like when he takes.

[D]

A flight i get a window seat so i can look for the transmission lines on the airplane and now they.

[C]

Lead to wind farms so he's clearly.

[B]

Dazzled by how the grid has changed.

[C]

Yeah this is his world so a year or so ago mike was looking at plans for new power lines and he saw a bunch of them were being built to supply data centers oh wow and he realized the data centers were getting these connections pretty much for.

[B]

Free what do you mean for free.

[C]

Well the data centers themselves don't have to pay extra to get connected but you know a famous economist once said there is no such thing as a free power line so guess who's really paying the bill for this my guess.

[B]

Is it's people like us dan people who pay our utility bill yeah the.

[C]

Electric companies are adding the cost of building these power lines into their customers electric bills which mike thinks is outrageous.

[D]

Dan when i saw this and when i've showed it to my colleagues who work in the renewable field and they see you don't have to pay for it if you're a data center just gets your hackles up it really was sort of a this isn't right kind of moment for me today on the.

[B]

Show what's coming to light about how utility customers like you and i are footing the bill to bring data centers.

[C]

Online and why a lot of people want that to change i'm emily kwong and i'm dan charles and you're listening to shortwave the science podcast from npr.

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[B]

Conditions apply okay dan let's back up a little bit with mike here when did he start investigating data centers well.

[C]

Mike'S starting point was we need more clean energy more solar and wind you know instead of burning coal and gas which pollutes the air and warms the.

[D]

Planet in the future we're going to have our economies run on non fossil fuel and we're going to think it was so foolish to dig up ancient.

[C]

Carbon and burn it but the thing is solar and wind farms have to send that clean electricity to where people.

[B]

Need it right so we can charge our electric cars cook our food and it's power lines that's ultimately carrying that energy where it needs to go yeah.

[C]

And as a grid geek mike spends a lot of time looking at obscure documents on the websites of electric utilities these are the companies that build and maintain that network of power lines and send us an electric bill every month.

[D]

I was digging around these local plans and i started to notice these references about building for data centers so for.

[C]

Instance he was going through this document from dominion energy which serves most of virginia it lists the projects they have.

[D]

In the works page thirty six new delivery point to serve a data center customer in south hill page forty eight a request at the white oak substation to serve a data center customer page fifty page fifty eight serve a data center complex center complex and data center.

[B]

Customer and henrique i'm picturing him like with his mind map data center data center how many data centers is as far as he could tell is dominion planning to power so in this one.

[C]

Document from twenty twenty four a couple of dozen projects just in virginia he went to similar documents from six more states in this same part of the regional electrical grid pennsylvania ohio illinois new jersey maryland and west virginia and he found one hundred thirty projects for data centers costing in total over four billion.

[B]

Dollars four billion dollars wow that is a lot so a fleet of data centers is under construction fueled by the ambitions of tech companies like openai and of course the trump administration's support for ai so d can you describe what one of these data center construction projects.

[C]

Looks like yeah so i picked one of the places in that list of projects that mike saw and i drove out to fairfax virginia to look at it i found an old warehouse a parking lot a big u haul center it all felt kind of sleepy honestly but in a few years a data center and a substation are supposed to fill this space about the size of eight football fields wow and i'd arranged to meet a couple of people from dominion energy here aisha khan and rob richardson have you come out here a lot not for not for a while.

[B]

How about you no i mean we've got a bunch of transmission projects we're.

[C]

Working on rob set up a little tablet computer on the hood of his truck to show me the plan we're right here right here by the by the u haul the edsel substation would be here at this right where we're standing or down there further nope right about here yep and then the transmission lines you know would come in right here by this creek it's going to be a big power line big enough to power a small city steel poles one hundred twenty feet tall together with the substation this project is listed as costing forty million dollars dan is this.

[B]

Power line just for one data center.

[C]

Yeah so this is an interesting point i got slightly different answers from aisha and rob about that that it's to.

[B]

Meet the growing demand here it's for reliability it's not just the data centers is you know our hospitals your schools your churches you know residents but the.

[C]

Data center did ask for this right then i think the data center is is largely driving the need for this project yes so honestly there's really no question it is getting built because the data center needs it okay but dominion argues that new power lines like this also make the whole power grid stronger and more reliable so everybody benefits and that's why it makes sense for everybody.

[B]

To pay for it how exactly does dominion get itself into a position where it can charge customers for this so.

[C]

Electric utilities like dominion energy aren't like regular businesses they are regulated monopolies right.

[B]

When i covered local government i saw this up close like the local government regulators they set the rates that companies like dominion are allowed to charge that's.

[C]

Right dominion energy sells electricity maintains the grid builds power lines when they're needed and regulators let them charge consumers just enough to cover those costs and collect some profit on top okay so when dominion spends more money building new power lines for data centers that extra cost translates directly into a little boost in the rates that everybody pays hmm because.

[B]

The system is kind of set up this way so how much are data centers adding to people's electric bills right.

[C]

Now so this is surprisingly hard to figure out this this wave of new data centers is just starting for one thing it's not exactly clear what the costs will be you have some people saying electric bills could jump a lot like dollar seventy a month and others say there could even be cases where data centers actually reduce people's bills if utilities can spread all their fixed costs across this base of customers but based on what's happening in for instance ohio and pennsylvania where utilities have proposed big increases in electricity rates it seems like data centers there at least will likely cost an average household at least a few extra dollars every month ultimate question is this fair well mike jacobs sure.

[D]

Doesn'T think so this is not fair you know this isn't right all the consumers of virginia are subsidizing the business plans of these data center companies which i would say is morally wrong and.

[B]

Bad policy interesting what does he think would make this fair basically mike would.

[C]

Like electric utilities to handle power lines for data centers the way they already handle power lines for solar and wind farms so here's an example right now there's a company that wants to build a big solar farm called cassius blue in southern virginia that's named for a really pretty butterfly species by the way nice okay so in order for cassius blue the solar solar farm to connect to the electrical grid it'll need dominion energy to build or upgrade some power lines and dominion energy has said okay we'll build them if you pay us twenty seven million dollars huh okay so.

[B]

It sounds like if you are a solar or wind farm generating electricity you have to pay for the power lines but if you are consuming electricity like you're a customer a big data center you don't have to pay for that upgrade instead everybody gets a rate increase tacked onto the their bill to build those power lines that is the way.

[C]

The system works right now those are the rules and mike says the rules should change that data centers should have to pay upfront for the power lines they need just like solar farms what.

[B]

Are the chances dan that this will.

[C]

Actually happen yeah it actually is possible i think huh data centers are not popular these days they're running into more and more opposition and just a few weeks ago the trump administration actually called for a new federal rule that would require new data centers to pay the costs involved in connecting them to the.

[B]

Grid oh wow that's a big shift.

[C]

Yeah it was kind of a shock because the trump administration has been very enthusiastic about ai mike jacobs says it's not really clear if there will be any such rule because this has always been something that state regulators had control over not the federal government but they're.

[D]

Asking for the right thing so we got a nice little fight unfolding over.

[C]

This very problem so all i can say is emily stay tuned.

[B]

Dan charles thank you so much for coming on to share what's going on with data centers and people's electric bills thanks for having me on the show and shortwavers if you want to dig into the environmental impact of data centers we have a two part series for you that i reported earlier this year visit our show notes to listen to it this episode was produced by burley mccoy it was edited by rebecca robert ramirez tyler jones checked the facts jimmy keeley was the audio engineer beth donovan is our senior vice president of podcasting i'm emily kwong thanks for listening to short wave the science podcast from npr.

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