As power-hungry data centers proliferate, states are searching for ways to protect utility customers from the steep costs of upgrading the electrical grid, trying instead to shift the cost to AI-driven tech companies. (Dana DiFilippo/New Jersey Monitor)

Regular energy consumers, not corporations, will bear the brunt of the increased costs of a boom in artificial intelligence that has contributed to a growth in data centers and a surge in power usage, recent research suggests.

Between 2024 and 2025, data center power usage accounted for $9 billion, or 174%, of increased power costs, a June report by Monitoring Analytics, an external market monitor for PJM Interconnection, found. PJM manages the electrical power grid and wholesale electric market for 13 states and Washington, D.C., and this spring, customers were told to expect roughly a $25 increase on their monthly electric bill starting June 1.

“The growth in data center load and the expected future growth in data center load are unique and unprecedented and uncertain and require a different approach than simply asserting that it is just supply and demand,” Monitoring Analytics’ report said.

Data centers house the physical infrastructure to power most of the computing we do today, but many AI models and the large AI companies that power them, like Amazon, Meta and Microsoft use vastly more energy than other kinds of computing. Training a single chatbot like ChatGPT uses about the same amount of energy as 100 homes over the course of a year, an AI founder told States Newsroom earlier this year.

The growth of data centers — and how much power they use — came on fast. A 2024 report by the Joint Legislative Audit and Review Commission in Virginia — known as a global hub for data centers — found that PJM forecasts it will use double the amount of average monthly energy in 2033 as it did in 2023. Without new data centers, energy use would only grow 15% by 2040, the report said.

As of July, the United States is home to more than 3,800 data centers, up from more than 3,600 in April. A majority of data centers are connected to the same electrical grids that power residential homes, commercial buildings and other structures.

“There are locational price differences, but data centers added anywhere in PJM have an effect on prices everywhere in PJM,” Joseph Bowring, president of Monitoring Analytics said.

Creeping costs

At least 36 states, both conservative and liberal, offer tax incentives to companies planning on building data centers in their states. But the increased costs that customers are experiencing have made some wonder if the projects are the economic wins they were touted as.

“I’m not convinced that boosting data centers, from a state policy perspective, is actually worth it,” said New Jersey State Sen. Andrew Zwicker, a Democrat and co-sponsor of a bill to separate data centers from regular power supply. “It doesn’t pay for a lot of permanent jobs.”

Energy cost has historically followed a socialized model, based on the idea that everyone benefits from reliable electricity, said Ari Peskoe, the director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program. Although some of the pricing model is based on your actual use, some costs like new power generation, transmission and infrastructure projects are spread across all customers.

Data centers’ rapid growth is “breaking” this tradition behind utility rates.

“These are cities, these data centers, in terms of how much electricity they use,” Peskoe said. “And it happens to be that these are the world’s wealthiest corporations behind these data centers, and it’s not clear how much local communities actually benefit from these data centers. Is there any justification for forcing everyone to pay for their energy use?”

This spring in Virginia, Dominion Energy filed a request with the State Corporation Commission to increase the rates it charges by an additional $10.50 on the monthly bill of an average resident and another $10.92 per month to pay for higher fuel costs, the Virginia Mercury reported.

Dominion, and another local supplier, recently filed a proposal to separate data centers into their own rate class to protect other customers, but the additional charges demonstrate the price increases that current contracts could pass on to customers.

In June, the Federal Energy Regulatory Commission convened a technical conference to assess the adequacy of PJM’s resources and those of other major power suppliers, like Midcontinent Independent System Operator, Inc., ISO New England Inc., New York Independent System Operator, Inc., California Independent System Operator Corporation (CAISO) and Southwest Power Pool (SPP).

The current supply of power by PJM is not adequate to meet the current and future demand from large data center loads, Monitoring Analytics asserts in a report following the conference.

“Customers are already bearing billions of dollars in higher costs as a direct result of existing and forecast data center load,” the report said.

Proposed changes

One of the often-proposed solutions to soften the increased cost of data centers is to require them to bring their own generation, meaning they’d contract with a developer to build a power plant that would be big enough to meet their own demand. Though there are other options, like co-location, which means putting some of the electrical demand on an outside source, total separation is the foremost solution Bowring presents in his reports.

“Data centers are unique in terms of their growth and impact on the grid, unique in the history of the grid, and therefore, we think that’s why we think data centers should be treated as a separate class,” Bowring said.

Some data centers are already voluntarily doing this. Constellation Energy, the owner of Three Mile Island nuclear plant in central Pennsylvania, struck a $16 billion deal with Microsoft to power the tech giant’s AI energy demand needs. 

But in some states, legislators are seeking to find a more binding solution.

New Jersey Sen. Bob Smith, a Democrat who chairs the Environment and Energy Committee, authored a bill this spring that would require new AI data centers in the state to supply their power from new, clean energy sources, if other states in the region enact similar measures.

“Seeing the large multinational trillion dollar companies, like Microsoft and Meta, be willing to do things like restart Three Mile Island is crazy, but shows you their desperation,” said co-sponsor Zwicker. “And so, okay, you want to come to New Jersey? Great, but you’re not going to put the basis (of the extra cost) on ratepayers.”

New Jersey House members launched a probe into PJM’s practices as the state buys its annual utilities from the supplier at auction this month. Its July 2024 auction saw electrical costs increase by more than 800%, which contributed to the skyrocketing bills that took effect June 1.

Residents are feeling it, Smith said, and he and his co-sponsors plan to use the summer to talk to the other states within PJM’s regional transmission organization (RTO).

“Everything we’re detecting so far is they’re just as angry — the other 13 entities in PJM — as us,” Smith told States Newsroom.

Smith said they’re discussing the possibility of joining or forming a different RTO.

“We’re in the shock and horror stage where these new prices are being included in these bills, and citizens are screaming in pain,” Smith said. “A solution that I filed in the bill, is the one that says, ‘AI data centers, you’re welcome in New Jersey, but bring your own clean electricity with them so they don’t impact the ratepayers.”

Utah enacted a law this year that allows “large load” customers like data centers to craft separate contracts with utilities, and a bill in Oregon, which would create a separate customer class for data centers, called the POWER Act, passed through both chambers last month.

If passed, New Jersey’s law would join others across the country in redefining the relationship between data centers powering AI and utilities providers.

“We have to take action, and I think we have to be pretty thoughtful about this, and look at the big picture as well,” Zwicker said. ”I’m not anti-data center, I’m pro-technology, but I’m just not willing to put it on the backs of ratepayers.” 

U.S. Senate Minority Leader Chuck Schumer, D-N.Y., speaks during a press conference inside the Capitol building on Wednesday, June 18, 2025. Oregon Democratic Sen. Ron Wyden is at right. (Photo by Jennifer Shutt/States Newsroom)

WASHINGTON — The next hurdle for Republican leaders in the U.S. Senate and the “big, beautiful bill”: Democrats — and possibly a few of their own members — in a marathon voting session will make last-ditch attempts to change the tax and spending cut measure.

The vote-a-rama, as it’s known, is expected to begin sometime during the last full week of June as Congress heads toward the Fourth of July recess. It will likely begin in the afternoon and  last overnight into the next morning. Senators will debate and vote on dozens of amendments attempting to revise the massive legislation that could have an effect on nearly every American.

Democrats, who have 47 votes in the Senate compared to 53 for Republicans, plan to zero in on Medicaid, taxes, corruption, policies that could raise energy costs and proposals that would increase the deficit, according to Senate Minority Leader Chuck Schumer.

Senate Majority Leader John Thune, R-S.D., and the committee chairs tasked with drafting pieces of the package have spent weeks combing through the House-passed bill to figure out what needs to be altered to avoid divisive floor votes. 

They’ve rewritten numerous policy proposals to comply with the strict rules that go along with the complex reconciliation process and are now trying to work out disagreements among GOP senators that could doom or complicate a final deal.

The goal is to avoid a protracted debate over core GOP provisions in full public view once the vote-a-rama begins, though some senators are already predicting votes on GOP amendments.

‘A potentially messy process’

Missouri Republican Sen. Josh Hawley, who has raised concerns about the bill’s impact on rural hospitals, said he hopes GOP leaders reach a consensus before vote-a-rama but didn’t rule out offering his own amendments if they don’t settle their disputes.

“Amending it on the floor, that’s a potentially messy process,” Hawley said. “I would hope that we could get to a good place before that. But we have to fix the rural hospital issue.”

Alabama Republican Sen. Tommy Tuberville said he will likely propose amendments during floor debate, though he declined to say what specific policies he’d seek to change or eliminate from the package.

“Yeah, we’ll have some,” Tuberville said. “And we’ve got them all, we just haven’t turned them in yet.”

Thune said he and other negotiators are making “headway” toward consensus on the more significant provisions in the package, which in many respects is far from its final form.

“The meetings right now are on the major provisions in tax and health. We have sort of pre-litigated a lot of that,” Thune said. “But there are a lot of the other provisions in the bill, chapters in the bill that are still subject to going through the Byrd bath, and we’re in the process of doing that. But hopefully that’ll be done by early next week.”

Republicans are using the reconciliation process to pass their sweeping tax and spending cuts package through the Senate with just a simple majority vote, requiring them to comply with the Byrd rules.

That includes the Byrd bath — going before the Senate parliamentarian to explain how each provision has an impact on federal revenue or spending that is not “merely incidental.” Democrats then usually debate before the parliamentarian the various changes that don’t meet that threshold. The process is named after the late Sen. Robert Byrd, a West Virginia Democrat.

Once the parliamentarian rules what elements comply and which need to be removed, the bill can go to the floor and senators can trudge through vote-a-rama. Eventually, all 100 lawmakers will vote to approve or disapprove of the legislation.

GOP senators passing their version of the package would send it back to the House, which passed its version on a slim 215-214 vote earlier this year — and could make yet more changes in the Senate bill.

Democrats develop strategy

Democrats are hoping to highlight policy divisions among Republicans during the vote-a-rama. And even if they don’t succeed in getting any of their amendments adopted, several votes could serve as fodder for campaign ads during next year’s midterm elections.

Schumer said Wednesday during a press conference it would be “difficult” for Democrats to peel off at least four GOP senators from the rest of the party in order to get an amendment adopted, but said he’s hopeful Republicans will “vote with us on some things they’ve all said they’ve agreed with.”

Democratic senators, he said, have created a task force to reach out to Republicans on major issues in the package, including how it would impact rural hospitals.

“Many of these hospital administrators and employees are Republican,” Schumer, a New York Democrat, said. “In many of the rural hospitals, they are the largest employer in the county, and in most they’re the only supplier of health care. It infuriates the rural counties, and they tend to be Republican.”

‘It’s just a show, it’s a charade’

West Virginia Republican Sen. Shelley Moore Capito said she’s not concerned about having to vote on dozens of amendments. 

“We’re here to vote,” Capito said. “As a creature of the House, we voted all the time on everything, so this doesn’t bother me. And, you know, just let the body work its will. If some changes are made, those will have to be dealt with. But I’m not worried about that.”

Arkansas Republican Sen. John Boozman said he expects the vote-a-rama will be “a very late night” and that he’s not planning to offer any of his own amendments.

As chairman of the Agriculture, Nutrition and Forestry Committee, Boozman expects to spend a considerable amount of time during vote-a-rama arguing against amendments seeking to change those provisions — including controversial cuts in the Supplemental Nutrition Assistance Program, which provides food aid for lower-income families.

Wisconsin Republican Sen. Ron Johnson said he plans to spend much of the vote-a-rama “going back and forth from my hideaway,” the ceremonial office that every senator holds in the Capitol building.

But Johnson cast doubt on actually being able to amend the package during that process, saying changes to the various bills that Senate committees have released need to be agreed to before then.

“You’ve got to get this before it ever goes to the floor. I mean, you’re not going to change things substantially or significantly with amendments. I know people have some idealized version that happens. It doesn’t,” Johnson said. “You’ve got to get these things in the base bill. Amendments; it’s just a show, it’s a charade.”

Vote-a-rama after vote-a-rama

The Senate has held two vote-a-ramas so far this year, and both demonstrated how difficult it is to change a piece of legislation.

The first all-nighter in February went along with Senate debate on its budget resolution and included votes on 25 amendments, with lawmakers adopting just two — one from Alaska Republican Sen. Dan Sullivan and one from Utah Republican Sen. Mike Lee.

The second vote-a-rama took place in April just before the Senate voted to approve the budget resolution that ultimately cleared the way for Congress to use the budget reconciliation process to advance the “big, beautiful bill.” Senators debated 28 amendments, voting to adopt one change from Sullivan.

Oregon Democratic Sen. Ron Wyden, ranking member on the Finance Committee, said he and staff on the panel will continue to parse through details of the panel’s bill, which Republicans just released Monday.

Wyden said he plans to hold several town hall meetings in GOP areas of his state over the weekend to gauge how residents there view the policy revisions Republican senators have put forward.

“We’ve had this bill for basically 36 hours. The first time I had it, I stayed up all night, so last night I got a little sleep,” Wyden said on Wednesday. “But on the plane, I’ll be working through it. And I expect to be working through it all through the next few days, except when I’m having these town hall meetings where I’ll have a number of questions.”