Your Power Bill is Soon Rising, Thanks to the AI Boom

Residents in New Jersey are facing the possibility of a sharp increase in electricity costs starting June 1, with bills potentially jumping by as much as 20%. A major reason behind this projected spike is the rapid growth of data centers across the country. 

These massive computing hubs, essential for supporting AI, cloud services, and data storage, are pushing U.S. electricity demand higher than ever. Experts say this trend is only going to intensify. Schneider Electric, a firm focused on energy systems and automation, predicts a 16% rise in electricity usage by 2029, largely driven by the expanding footprint of data centers. 

Most of these facilities rely heavily on the public electrical grid, which puts the cost burden on regular consumers. Mark Wolfe, who leads the National Energy Assistance Directors Association, said utilities are scrambling to keep up with AI and cloud service needs by building more infrastructure, often hiking rates without much notice or public input. As a result, everyday families end up paying more, while tech giants often negotiate favorable terms out of public view. 

According to Environment America, data centers nationwide have soared, nearly doubling between 2021 and 2024, with Virginia, California, and Texas being home to the largest clusters. Most of these facilities are also growing in size, thus using a massive amount of electricity. 

Part of what’s driving this boom is the surge in GenAI technologies. Tools like ChatGPT require enormous computing power, and each AI-driven search can use up to ten times more energy than a standard search engine query, according to the Electric Power Research Institute. These systems also generate a lot of heat, requiring additional power for cooling. 

Apollo Global Management chief economist Torsten Sløk estimates that by 2030, data centers in the U.S. could need an extra 18 gigawatts of power—three times what New York City currently consumes. 

A study from the Lawrence Berkeley National Laboratory found that data centers accounted for around 4.4% of U.S. electricity use in 2023. While AI is a piece of that, it’s not the only factor. Other reasons for higher electricity prices include rising natural gas costs, inflation, and the electrification of vehicles and buildings. Still, utilities are factoring in the heavy load from data centers when they propose new pricing. 

Dominion Energy in Virginia, for instance, suggested a new rate plan targeting large energy users like data centers, alongside an $8.51 monthly increase set for 2026. Nationwide, energy prices have gone up 4.5% over the past year and are projected to climb further this summer. 

A Republican-supported federal tax bill could drive costs even higher by cutting back on tax credits introduced by the Inflation Reduction Act. Analysts warn this could add close to $400 per year to household energy expenses. 

Besides price hikes, there’s concern about grid reliability. The North American Electric Reliability Corp. recently noted that new facilities built for AI and crypto are sprouting up faster than the energy infrastructure needed to support them. PJM, a major grid operator serving 13 states and D.C., has already identified data centers as a risk factor in its forecast, warning of potential shortages in power capacity. 

A time could soon come when major tech companies like D-Wave Quantum Inc. (NYSE: QBTS) may have to look into coming up with AI innovations that are energy-efficient so that the current hunger for energy by AI systems can be kept in check. 

NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS 

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