Bending the Curve: Who Pays for the Power, and Pollution, of Data Centers?

In Episode 7 of Bending the Curve: Positive Progress on the Environment, our YouTube series, we examine the anxiety about data centers’ effects on residential power bills. We also wonder if people should pay more attention to where the electricity comes from.

Data centers keep the digital world running. But as artificial intelligence drives construction of larger facilities, communities are asking hard questions: Who pays for the electricity? Where does that power come from? And who gets to decide?

A Backlash Against the Building Boom

Opposition to new data centers is spreading across the United States. According to Data Center Watch, at least 75 projects valued at $130 billion have been stopped in their tracks. A moratorium tracker from Interconnected Capital reports 300 construction pauses or restrictions as of early 2026. Those figures capture a growing conflict between the demand for computing power and the communities expected to host it.

The debate is not only about technology companies. It is also about trust in local government. Tech journalist Jasmine Sun, says fear about AI is only part of the frustration.

“[People ask] why the hell is our city council selling us out?” Sun said on the podcast MTS. “You were supposed to be on our side. You’re supposed to be our democratically elected representatives. There’s almost more tension, I think, between residents and their local governments than [with] AI.”

Are Data Centers Driving Up Electricity Bills?

Ratepayers have reason to pay attention. In Washington state, Puget Sound Energy has requested increases that could add $612 a year to an average electric bill and $276 to an average gas bill by 2029. Customers at a recent public hearing decried to the proposal.

“These rate raises will kill us. We will die,” one speaker said.

“I’ve seen that the jury has spoken, and spoken unanimously in rejecting the proposed rate increases,” said another speaker.

In Virginia, a center of the data-center boom, Dominion Energy’s generation costs have risen 88 percent since 2021, translating into a 13 percent monthly increase for the average customer. Large facilities can require 100 megawatts of continuous power—comparable to the needs of tens of thousands of households. These rising costs justify increases, the company says.

But is it fair to blame rate increases on data centers? Research by energy consulting firm E3 identifies inflation, changing natural-gas prices, grid modernization, resilience investments, and other market forces as major factors. Data centers add demand, but they are not the only cause of rising bills.

The Climate Question: What Generates the Electricity?

For people who care about the warming climate, the source of the power matters as much as its price. Coal and natural gas together generate about 57 percent of America’s electricity. Some data centers also rely on diesel backup generators or on-site gas turbines. These increase emissions and air pollution just when the electric grid needs to become cleaner.

A few states are pushing back. New Jersey fined a data center $1.1 million for operating gas generators in violation of pollution rules. Investigative journalists at Floodlight News imaged gas turbines serving an xAI facility in Mississippi. Journalists alleged violations of federal clean-air laws; the company denied the allegation.

These cases raise a basic question: Should companies building energy-hungry computing facilities be allowed to rely on fossil-fuel infrastructure that undermines climate goals?

A Cleaner, Fairer Way Forward

Data centers don’t require fossil fueled electricity, except in power failures or other emergencies. Local permits should require developers to use clean electricity from wind, solar, and hydropower, supported by battery storage. Regulators can also protect households from paying for infrastructure built primarily to serve large commercial customers.

States can write laws and regulations to encourage sustainable power for data centers and shield residential customers from data-center costs. President Trump has extracted a voluntary pledge from AI companies and data center builders not to shift those costs to consumers.

Environmental writer Bill McKibben says we already have the capacity via wind and solar to supply data center needs, as well as mitigate the effects of climate change.

“Cheap energy from the sun and the wind that’s easily scalable helps people at the most basic level everywhere,” he says. “That offers us a way not to stop global warming–too late for that–but a way to blunt its worst excesses.”

AI is becoming part of everyday life. The choice is not simply whether data centers get built, but how they are powered, who bears their costs, and whether communities have a meaningful voice. A digital future should not force us backward on clean energy.

Watch Episode 7 of Bending the Curve on YouTube.

What do you think? Are data centers in your neighborhood driving up power bills?

Image: Colorized frame of film Kronos (1957)