Author: Mike Jacobs Published: 09/29/2025 Evergreen Action
Union of Concerned Scientists: “The wealthiest companies are building extraordinarily expensive data centers that you and I are subsidizing.”
A new analysis from the Union of Concerned Scientists reveals that electric utilities across the PJM region are forcing consumers to pay billions to connect Big Tech’s massive data centers to the grid. Households in seven states—including Pennsylvania, New Jersey, and Maryland—were on the hook for $4.3 billion in 2024 alone. Utilities are taking advantage of outdated rules to pass these costs on to ratepayers instead of charging the companies actually driving the demand. And the system is working exactly as designed—protecting monopoly utilities, generators, and tech giants while sticking families with the bill. If PJM and regulators are serious about affordability, they must end this cost-shifting scheme and require Big Tech to pay its fair share.
ICYMI: Union of Concerned Scientists: Data Centers Are Already Increasing Your Energy Bills. We Have the Receipts.
Key Points:
- Electric bills are going up around the country and some of those increases are due to an outdated practice that requires consumers to pay billions for tech giants’ grid connections.
- Our new analysis tallies up $4.3 billion in costs in 2024 for just seven states: Illinois, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia.
- Many data centers built recently have the electricity demand of small cities. New proposals for data center campuses have power demands comparable to the total power plants in small states.
- Through a review of planning documents across states within the grid operator PJM’s jurisdiction, I found 130 examples of electric utilities connecting data centers to the grid with very expensive new lines while passing costs to consumers under old rules.
- From most perspectives, this is morally wrong and bad policy. However, from the perspective of the rules for electric companies making routine expansions of their transmission and distribution wires, this is standard practice.
- Around the country, consumers are alarmed by rising utility bills while utilities are responding with insufficient changes to ensure that the large new data center customers are held responsible for simply paying their own bills.
- Totaling $4.3 billion in 2024 alone, the costs for the electric connections that extend from the existing transmission lines to the data center customers are immense. These are costs for directly connecting the data centers, often including new transformers and gear on the property of the data center. Many of these individual connections cost between $25 million and $100 million.
- When these data center direct connections are included in the utility’s locally planned transmission plans, they become part of the regional transmission expansion plan without regulatory review. In addition, this step also allows the utility to include the costs in transmission rates. This sequence of essentially automatic approvals has caused controversy and calls for reform, even before the rise of data center costs.
- Because of a gap in regulatory jurisdictions, the transmission costs are bundled together, filed at the Federal Energy Regulatory Commission (FERC), and then sent to the states as one amalgamated cost. The information describing the cause of certain costs as due to a single customer is lost.
- When these enormous new customers arrived in recent years, their costs were allocated without respect for the principle of cost causation. Usually, regulatory decisions aim to assign costs to the entities that cause those costs. This problem needs to be fixed. Early indications for the coming year reveal $2.5 billion for more data center connections in these seven states so far, and dozens more in progress.
- The wealthiest companies are building extraordinarily expensive data centers that you and I are subsidizing.
Find this release online here.