As AI companies build data centers across the country, American consumers have seen increased energy costs, and policymakers at all levels of government are concerned about the resilience of the electrical grid. A new report released today by Matthew McHale and Hannah Wiseman proposes nine ideas for state and federal policymakers to protect households from increased costs of electricity and to ensure a reliable, resilient grid.
Data centers are projected to utilize up to 12% of total U.S. electricity by 2028, up from 4.4% in 2023, and this increased demand is being thrust upon aging electrical grid infrastructure. Electricity bills are a “major” source of stress for more than one-third of adults, according to an October 2025 Associated Press-NORC Center for Public Affairs Research poll, and rising utility bills were a salient issue in the 2025 elections.
“Data centers have fundamentally changed the trajectory of American energy demands. One hyperscale data center can use the same amount of energy as about 80,000 households,” said Wiseman, a professor at Penn State Dickinson Law School and in the Penn State Department of Energy and Mineral Engineering, where she co-directs the Center for Energy Law and Policy. “Policymakers have options to ensure that the aging electrical grid—stressed by rapidly growing data center demand—remains reliable for American households.”
McHale and Wiseman propose six policies to ensure that new and proposed data centers do not drive up rates for residential, commercial, and smaller industrial customers. These include:
- Requiring utilities to allocate the costs of grid expansions from data centers to the data centers themselves, rather than other consumers
- Requiring data centers to pay for additional local infrastructure costs
- Ensuring tax breaks and other benefits are transparent and provide net benefits to the community
They also suggest avoiding overbuilding, ensuring publicly available rates and terms of service, and tracking disconnections to monitor affordability. The authors also propose three policies for ensuring grid reliability and resilience.
“The advancement of AI is a national priority, but so is affordability,” said McHale, an energy expert and consultant. “Voters are worried about their increasing utility bills, and they want policymakers to shield them from rate increases driven by the cost of providing electricity to data centers.”
Read the full paper on VPA’s website, or read more about the report in VPA’s Substack.
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