Energy bills on the rise, driven in part by power-hungry AI
Utility customers nationwide are facing higher electricity bills as power companies request steep rate increases and artificial intelligence data centers place growing demands on existing grids.
According to KTLA consumer reporter David Lazarus, utilities requested and received approvals for $34 billion in rate changes during the first three quarters of 2025—more than double the $16 billion sought over the same period last year, according to a report by nonprofit Power Lines.
Residential electricity prices have climbed 11% from January to August, federal data show—a rate nearly four times higher than inflation.
“The increases are due in part to the usual factors, like upgrading aging infrastructure, which is understandable,” Lazarus said. “But AI is also playing a major role.”
He explained that fast-growing AI data centers consume enormous amounts of electricity and require significant water to cool their systems. While some facilities are investing in their own energy sources—including nuclear options—these projects are still years from completion.
In the meantime, Lazarus said, “data centers are drawing power from existing grids, which leads to shortages and higher rates for everyone else.”
The Pew Research Center reports that total annual U.S. electricity consumption reached a record high in 2024, and that trend is expected to continue as data centers expand. Researchers caution, however, that it can be difficult to determine exactly how much of a data center’s energy use is specifically driven by AI.
For consumers worried about rising bills, Lazarus offered some guidance. He recommended contacting utility providers to explore payment plans or short-term arrangements. “They’re not going to let you off the hook, but they can at least help you manage the spike,” he said.
He also urged residents to engage with state utility regulators, reminding them that public input is considered in rate decisions. “If enough people speak out against rising rates, these regulators will respond,” Lazarus noted.
Still, he warned that electricity rate hikes may become a permanent feature. “This is likely to be a perennial problem,” he said. “The AI industry is here to stay and it’s fueling the U.S. economy—but it’s extremely energy-intensive.”
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