Rising electricity demand from data centers is drawing scrutiny over its effect on consumer power bills, according to a Congressional Research Service review of data center energy consumption. On average, residential electricity costs across the United States have risen about 42 percent over the last five years.

The review is careful about attribution. Data centers are not the sole reason for higher bills, which also reflect fuel costs, grid upgrades, and weather-driven demand. The analysis notes that data centers have been a major driver in specific places where costs have climbed the most, particularly in regions with dense computing clusters and constrained transmission.

The scale of consumption underlies the cost debate. Data centers draw large, steady loads that run around the clock, which differs from the variable demand of homes and most businesses. That steady draw requires utilities to plan firm capacity, and the cost of new generation and transmission is often spread across the customer base unless regulators direct large users to shoulder more of it.

The cost question has moved into the policy arena. State utility commissions and federal officials are examining how to allocate the expense of serving data center load, including special tariffs, large-load interconnection rules, and dedicated supply agreements. The 42 percent five-year increase in residential rates has made the affordability of electricity a focal point as the data center buildout continues across the country.

Source: Congressional Research Service - https://www.congress.gov/crs-product/R48646