AI data centers could hike California electricity bills

By Alejandro Lazo, CalMatters

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If you’re worried about data centers and AI inflating your electricity bill, you’re not alone.

A California watchdog released a report Tuesday urging policymakers to act fast on the state’s fast-growing data-center industry – before soaring electricity demand from artificial intelligence lands on the bills of ordinary households.

“The costs that data centers impose on the electrical grid should be paid by the centers themselves, not by average California families already struggling with high utility bills,” said Pedro Nava, chair of the Little Hoover commission, the independent bipartisan body that produced the report.

The commission outlined more than a dozen recommendations for managing the industry’s impact on the power grid, electricity prices and the state’s climate goals.

The report lands at a critical moment as lawmakers in Sacramento prepare another round of proposals aimed at regulating the rapidly expanding industry.

Similar efforts last year — including proposals to require more transparency about energy use and to shield ratepayers from the cost of grid upgrades — stalled in the Legislature after opposition from the tech industry and business groups.

The coming power surge

At the center of the debate is the sheer scale of electricity demand anticipated from data centers. Pacific Gas & Electric, the state’s largest utility, told regulators last year that data center projects seeking power could add about 10 gigawatts of electricity demand over the next decade — roughly four times the generating capacity of the Diablo Canyon nuclear plant. For context, the Sacramento region uses a little over 3 gigawatts of electricity at its busiest times.

State energy planners assume many planned data center projects will never be built or will operate below full capacity. That’s because companies can propose large…

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