Electricity Demand Soars as Data Centers Drive Concerns Among Lawmakers

Sat Nov 15 2025 10:01:23 GMT+0200 (Eastern European Standard Time)

Utility forecasts predict a drastic increase in electricity demand due to growing data centers, raising alarms about the feasibility of meeting this surge amid concerns of potential overbuilding and costs passed on to consumers.

Utility companies predict a two to threefold increase in electricity demand driven by new data centers critical to the burgeoning AI economy. This alarming forecast has prompted skepticism from lawmakers and consumer advocates regarding the accuracy and reliability of these demand projections. Concerns center on whether anticipated data center projects may not materialize, potentially leaving consumers to foot the bill for unnecessary infrastructure. Recent calls for improved accuracy in electricity demand forecasting urge greater scrutiny of the financial viability of these developments, as states grapple with rising electricity costs attributable to this increasing demand.

HARRISBURG, Pa. (AP) — The forecasts are eye-popping: utilities saying they’ll need two or three times more electricity within a few years to power massive new data centers that are feeding a fast-growing AI economy.

But the challenges — some say the impossibility — of building new power plants to meet that demand so quickly has set off alarm bells for lawmakers, policymakers, and regulators who wonder if those utility forecasts can be trusted.

One burning question is whether the forecasts are based on data center projects that may never get built — eliciting concern that regular ratepayers could be stuck with the bill to build unnecessary power plants and grid infrastructure at a cost of billions of dollars.

The scrutiny comes as analysts warn of the risk of an artificial intelligence investment bubble that’s ballooned tech stock prices and could burst.

Meanwhile, consumer advocates are finding that ratepayers in some areas — such as the mid-Atlantic electricity grid, which encompasses all or parts of 13 states stretching from New Jersey to Illinois, as well as Washington, D.C. — are already underwriting the cost to supply power to data centers, some of them built, some not.

Joe Bowring, who heads Monitoring Analytics, the independent market watchdog in the mid-Atlantic grid territory, noted, 'There’s speculation in there. Nobody really knows. Nobody has been looking carefully enough at the forecast to know what’s speculative, what’s double-counting, what’s real, what’s not.'

Suspicions about skyrocketing demand

There is no standard practice across grids or for utilities to vet such massive projects, and figuring out a solution has become a hot topic, utilities and grid operators say.

Uncertainty around forecasts is typically traced to a couple of things. One concerns developers seeking a grid connection, but whose plans aren’t set in stone or lack the heft — clients, financing, or otherwise — to bring the project to completion, industry and regulatory officials say.

The effort to improve forecasts got a high-profile boost in September, when a Federal Energy Regulatory Commission member asked the nation’s grid operators for information on how they determine that a project is not only viable but will use the electricity it says it needs.

In Texas, lawmakers still haunted by a blackout during a deadly 2021 winter storm were shocked when told in 2024 by the grid operator that its peak demand could nearly double by 2030.

Electricity bills are rising, too

PPL Electric Utilities, which delivers power to 1.5 million customers across central and eastern Pennsylvania, projects that data centers will more than triple its peak electricity demand by 2030. Ratepayers in Philadelphia have already absorbed increases in electricity bills attributed to the rising cost of wholesale electricity driven primarily by data center demand.

That’s why state lawmaker Rep. Danilo Burgos stated that ratepayers need more protection to ensure they benefit from the higher costs, expressing concern that once companies profit, they show little empathy toward those paying the bills.