New report links AI data centers to increase in California homeowners’ electricity bills

CALIFORNIA – A Realtor.com report, released on August 7, found that AI is driving innovation but also consuming huge amounts of electricity, much of it from massive U.S. data centers.

In California, one of the states supplying the most electricity to data centers, electricity rates have risen 1.9% for homeowners.

The Jack Kemp Foundation says by 2029, consumers could face a 70% surge in electricity bills due to the escalating energy demand from AI data centers, impacting low- and middle-income families disproportionately.

Virginia, which supplies the most electricity to these data centers, saw a 3.1% increase in electricity prices. Texas rates rose 4.4%, Illinois 12.2%, and Oregon 5.5%.

Peak-time surcharges increase residents’ electricity bills

Business Insider identified 1,240 data centers in the U.S. already built or approved for construction at the end of last year — nearly four times the number in 2010.

“As utilities race to meet AI-driven energy demand, infrastructure costs are rising and those costs are passed on to everyday ratepayers,” said Solomon Group and Solomon e3 CEO Aaron Wright.

In hot weather places or fast-growing AI hubs like California and Texas, peak-time surcharges increase residents’ electricity bills during high-demand periods.

Realtor.com says efficiency is key to cutting electricity costs – using smart thermostats, energy-efficient appliances, off-peak usage, weatherproofing, and solar panels helps lower bills and improve reliability.

Bills to rein in surging energy demands

California lawmakers are moving to rein in the surging energy demands of AI and cloud computing.

SB 57, the Ratepayer and Technological Innovation Protection Act, directs the California Public Utilities Commission (CPUC) to create a special electricity rate for big energy users like data centers and AI companies.

These rates are designed to keep costs fair for all customers, support clean energy goals, and make sure new users pay their share of grid upgrades.

AB 222 mandates annual energy-use reporting for data centers, establishes efficiency standards, and requires utilities to justify any related cost increases.

Both bills are still in the legislative process.