Utility bills spike as power-hungry AI data centers boom, Bank of America report finds

The rapid rollout of power-hungry AI data centers could be straining the US energy grid and causing utility bills to spike – and prices could get worse in the coming months, according to economists.Americans spent 3.6% more on electricity and gas in the third quarter of this year than they did during the same time last year, according to a study led by Bank of America economist David Tinsley.Taking a longer view, electricity prices rose 5.1% over the past 12 months through September, while gas service went up a whopping 11.7%, the Bureau of Labor Statistics said Friday.That came as the feds and state governments have been offering financial incentives for companies to build data centers.There are over 4,000 such sites throughout the US today, according to datacentermap.com, though there is no official count.“The rising demand for electricity generation capacity and grid investments, due in part to the build-out of data centers, appears to be placing more upward pressure on bills,” stated the Bank of America report, which was released last week.When electrical grids get enhanced to accommodate increased power demands from new data centers, at least some of the cost appears to get passed on to consumers, the report explained.On top of that, the increased use of electric vehicles has added to electricity demand, helping to keep prices high, according to the study.More price hikes could be in store this winter.“Consumers may again feel the pressure on their utility bills in the coming months, particularly if the winter is a cold one,” BofA’s report warned.Electricity and natural gas prices actually ticked down slightly from August to September, according to the Consumer Price Index, though that’s likely due to consumers flipping off the A/C and waiting to turn on the heat.Meanwhile, expanding the US power grid faces a number of barriers, with massive amounts of capital needed to build “more generation and transmission capacity,” the BofA report stated...