New analysis may prompt Americans to revisit tradeoffs associated with the development of artificial intelligence. Regulatory updates could also put billions of dollars back in consumers' pockets and make wealthy corporations pay for their expensive activities.  

What's happening?

Wealthy companies are increasingly investing in data-center development amid an AI boom. Yet everyday consumers usually foot the bill rather than companies. 

The Union of Concerned Scientists examined utility costs in seven states served by transmission company PJM: Illinois, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, and West Virginia. 

UCS discovered that PJM passed over $4.3 billion in data-center transmission costs on to customers in the last year. Electric companies connected data centers to the grid with "very expensive" new lines subsidized by consumers 130 times, according to senior energy analyst Mike Jacobs. 

"From most perspectives, this is morally wrong and bad policy. However, from the perspective of the rules for electric companies making routine expansions of their transmission and distribution wires, this is standard practice," Jacobs wrote for UCS' The Equation. 

"This spreading of costs isn't illegal. It is simply out of date. Unfortunately the impact is very real. The wealthiest companies are building extraordinarily expensive data centers that you and I are subsidizing," he added. 

Why is this important?

A core point of contention surrounding data center development is whether the pros outweigh the cons. In Virginia, for instance, Data Center Alley has led to tax cuts for residents, created new jobs, and generated revenue that can be reinvested into essential services like schools.

However, many say that noise and pollution from data centers have destroyed their quality of life and local ecosystem health. A single data center can consume as much electricity as a small city. Emerging projects for data-center campuses may demand energy "comparable to the total power plants in small states," as Jacobs explained for The Equation. 

Major companies, including Amazon, Google, and Microsoft, among others, have invested in clean, non-polluting energy to power a growing number of data centers. But many data centers still rely on dirty fossil fuels. They also require massive amounts of water for cooling. 

Earlier this year, the city of Tucson, Arizona, rejected a proposal for a data center that would have required millions of gallons of water annually. 

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The project was reportedly from Amazon, which has heavily invested in AI. At the end of October, the company laid off thousands of workers. It cited AI as the reason for its reduction in force even as it raked in billions in profits.   

What's being done about this?

While a silver-bullet solution may not exist, cooling technology developments could create more sustainable, less energy-intensive data-center operations. Solar and wind projects can also be scaled quickly to meet increasing energy demands. 

As for the problem of utility providers passing costs on to consumers, the UCS analysis outlined its recommendations to ensure a "fair and prudent allocation of power sector infrastructure." 

The four-pronged plan would require utilities to track transmission costs attributable to specific customers. The Federal Energy Regulatory Commission and state public utility commissions would work to assign new utility costs to consumers or retailers responsible for causing those costs. 

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