On Tuesday, Senators launched an investigation requesting that technology companies detail their strategies to prevent data center projects from raising electricity costs in areas where rates are already soaring. The inquiry was prompted by a study indicating that electricity prices in regions with substantial data center activity have surged by up to 267 percent over the past five years.
In communications sent to seven AI firms, Senators Elizabeth Warren (D-Mass.), Chris Van Hollen (D-Md.), and Richard Blumenthal (D-Conn.) argued that electricity prices rise when utility companies expand infrastructure to accommodate the massive energy demands of data centers, which can consume as much power as an entire city. Prices also increase when the local power demand surpasses supply. Residents often find themselves faced with unexpected higher bills, unaware of data center projects, as tech companies frequently keep the terms of such deals undisclosed to avoid opposition.
The Senators criticized AI firms for practices such as requiring public officials to sign non-disclosure agreements (NDAs) that prevent them from sharing information with the public. Companies are further accused of using shell entities to conceal the true ownership of data centers and of obligating landowners to sign NDAs regarding land sales, revealing only that a 'Fortune 100 company' intends to carry out an 'industrial development' to obscure the data center's existence.
The Senators highlighted that some states, including Virginiaāwhich has the nation's highest concentration of data centersācould see electricity rates rise by an additional 25 percent by 2030. However, they warned that the problem is not confined to states that engage in these non-transparent deals, as interconnected and interstate power grids mean a data center built in one state can increase costs for residents in neighboring states.