Homeowners have been paying more for electricity over the past few years, but new analysis has revealed that data centers for artificial intelligence are impacting electricity bills for individual consumers in a significant way.
What's happening?
According to Yale Climate Connections, residential electricity prices in the United States increased by 25% between 2020 and 2024. Karin Kirk, a science writer, said prices are rising fastest for residential users, but increases in electricity demand are mostly due to data centers.
"A word of warning: this analysis might make you mad, but hopefully in a productive way," Kirk wrote.
The analysis separated energy customers into three categories: residential, commercial, and industrial. Data showed that commercial demand for electricity, which included that of data centers, grew more quickly than residential demand over the span of three years, with a 9% increase.
Why are electricity prices important?
In the analysis, Kirk said new data demonstrated how residential consumers are subsidizing the energy bills of data centers. Companies using a lot of electricity often have more leverage than individual consumers when it comes to pricing.
According to Axios, nearly 3,000 new data centers were expected to be built across the nation as of December. Add those to the 4,000 data centers that are already operating, and homeowners may see their energy prices rise even more.
The national average monthly electric bill for residential customers was already $144 in 2024, according to the U.S. Energy Information Administration.
Reducing your energy consumption or producing your own electricity can save you a lot of money in the long run. The U.S. Department of Energy said installing energy-efficient appliances can lead to greater savings when it comes to your electricity bill.
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