This is One Thing, I'm David Rind, and what you type into ChatGBT comes with a cost.

There's so many chips and these facilities are so large that these facilities now consume as much energy as large US cities.

'AI boom is showing up in your electric bill in just a bit. Stick with us. At the heart of the nearly two-week-long government shutdown is a debate about affordability, specifically affordability in healthcare. Affordability is also an issue for both parties in key governor's races this year in New Jersey and Virginia, where Elizabeth Martirana lives.

We've lived in Prince William County for 49 years.

So like this area is, is home through and through for you.

Definitely my husband and I moved here in the summer of 76. We raised our children here, they attended schools here.

Liz is retired. She lives in an active 55 plus community in Gainesville, Virginia, about 45 minutes outside of Washington DC. And she loves just about everything about the area, except for one thing. There were.

'On a Sunday morning going for a hike in our National Forest Park, which is right adjacent to my community, and they couldn't figure out what this humming was. And the humming can come from the 24-7 air handlers on top of all of these data centers.

'She says over the past couple of years, huge data centers have been popping up all over her county. Data centers have a been a thing, of course, ever since the modern internet was born. But as more tech companies go all in on artificial intelligence, they need these buildings to house the computers that are doing massive complex calculations 24-7. And Virginia is quite literally the data center capital of the world. According to a 2024 state government study, the state accounted for 13% of the world's data center operational capacity, 13%. Loudon County has been dubbed data center alley because of how many centers it has, and nearby Prince William County, where Liz lives, is quickly catching up.

The old data centers weren't that big. They were two stories tall. Now we have the hyperscale data centers. They're going 90 to 115 feet are being approved here in my neighborhood.

Paint the picture for me like where you live, like how close is the nearest one to you?

I'll show you this one is about a four minute drive.

Okay.

And then the next one is this one. And this is also about a... Just for the listeners at home.

Just for the listeners at home, you're showing me printouts of these data centers, which I appreciate.

I am, and in the red, those numbers are the approximate number of diesel generators next to those buildings.

It strikes me that, you know, seemed to know a lot about the specific kind of, um, infrastructure of these data centers. Did you ever expect that you would be so intimately aware of like how these things are constructed?

Not in a million.

'Liz says fighting back against these data centers has become her full-time job. She and her neighbors have been making the case to county officials that this is much more than a not in my backyard fight. Experts say the infrastructure needed to support the massive growth of AI has the potential to impact the wallet of people who live far from these facilities. We'll hear about that in a bit. But Liz says there are also environmental impacts for those who live close. When the backup diesel generators Thank you, sir.

You have to worry about that diesel fuel and the particulate matter that is emitted with that diesel field. So you've got air quality problems, right? The data centers need water, massive amounts of water. You've got the deforestation. You know, this farmland, so much of it is forest and not just taking down the trees, which help our air quality, right, help protect us. But then we're losing all of our wildlife too.

Now the tech companies insist they are being good neighbors and are being mindful of the environmental impact. They also argue the centers will create thousands of jobs. But there's no doubt that residents who live nearby and many who don't are seeing higher electric bills as a result. Bloomberg recently crunched some numbers from the energy tracking site grid status and found that since 2020, wholesale electricity costs have gone up astronomically in major cities all over the country. Tulsa, 108%... Columbus 110%, Baltimore 125%, Buffalo nearly 200%.

Ours went up this year, July 1, probably about $15 a month, and over time we've been warned in the next five years or so it could go up domestically.

I guess the one question I have, and it's a tough one, is have you ever thought about moving?

All the time. All the time, my husband will.

But you would?

Because I know, I know how devastating this area is going to be in the next 10 years.

So, as the AI race shows no signs of slowing down, how soon will you feel the sting of higher prices? And can you do anything to stop it? I recently put those questions and more to an expert.

I'm Ari Pesco, I direct the Electricity Law Initiative at Harvard Law School.

Okay, so can you first explain what is actually in these AI data centers? Because from the outside, like to me, who doesn't know a ton about this stuff, they look like any other warehouse you'd see in an industrial park. These are.

'Massive facilities that are packed with computer chips, particularly power-hungry computer chips and cooling equipment, because these energy-intensive chips emit a lot of heat and the facility has to be kept at a particular temperature to keep everything operational. But there's so many chips, and these facilities are so large that these facilities now consume as much energy as large U.S. Cities.

Intel's new Internet Operations Center is a $150 million technological wonderland, 85,000 square feet, 10,000 network servers.

So data centers have been part of the backbone of our internet since the internet began. When you type something into your computer and you wanna watch a video or get some information, that's all coming from some far away data center. What's changed is since the introduction of chat GPT a few years ago, a handful of the largest tech companies have been pursuing the development of artificial intelligence. And under their current model... The more computing power they have, the better their models are.

Freaked out. That's how one doctor is describing his reaction to A.I.'s ability to outperform him in diagnosing medical conditions, outperforming by a lot.

'OpenAI's new video app Sora 2 is almost erasing the line between reality and AI-generated video.

'And so they've been building ever-larger computing facilities over the past couple of years. And we are now seeing, we went from megawatt scale facilities to now gigawatt-scale facilities. And to give you a sense of what that means, a nuclear reactor can generate about a gigawat of electricity. So there are now these industrial-scale computing facilities that are so large even a nuclear power plant cannot power it.

Good Lord, I mean, so where are they getting this power that is needed to operate these things?

So historically in the United States, and it continues to be the case, that we generally have excess generating capacity on the system. And the industry wants that because you want to have some margin for error, right, in case something breaks or something like that. And also we as a society are always using different amounts of power throughout the day and in different seasons, right? So typically a power system is generating its max during a hot summer day when we're all using the air conditioning, and that's when demand is at its highest. But for the rest of the year, there is more than sufficient capacity. Where we may be running into trouble is as more of these facilities connect, we have to make sure that supply can keep pace with this demand so we keep that adequate safety margin.

And I guess I'm wondering how does this end up impacting the end consumer in the form of higher electricity bills? Like I guess first of all, are we seeing that as a result of all these data centers coming online?

'So we are starting to see that. And so we have to talk a little bit about how it is that your power bill is the price that it is. And we all take service, electricity service from a utility. Three quarters of Americans receive power from a for-profit utility. It's a trillion dollar industry. And because these companies have monopolies on local delivery, the prices they charge to consumers are regulated by a state. Utility commission, a body of usually five members that decide what the price can be. And the sort of traditional way of setting prices is to tie them to the costs that the utility incurs to provide service. So if the utility builds a new power plant, builds a power line, the costs of those facilities are just included in the rates that we all pay. And in effect, the utility build something We all basically pay for it. And the basic idea was that increased and reliable energy benefits all of us and so we all pay. What's changing now is that utilities are spending billions of dollars really just for this one or two customers, these tech companies that are building these facilities and using the traditional rate setting methods. So we're in this period right now, where demand is starting to really go up as these data centers come online. That demand is going up, but supply can't catch up fast enough. So we're seeing higher prices in some of these markets. We'll be right back.

The rising electric bills, are we seeing it only in areas that are right next to these data centers or is it becoming like more widespread throughout the country?

So utility bills are going up for a number of factors. I would say data centers are just one factor in the mix. The main reason is that your local utility is simply spending more money on the sort of poles and wires that sort of make the system all work. Part of the reason here is that a lot of the component costs are going up and part of the reasons is just that they're spending money because that's how utilities make money. And I think we're in a moment now where we are at the early stages potentially of this build out for these industrial scale computing facilities. I think if regulators don't take action now to fix how rates are set and to make sure that these facilities, these data center facilities are paying for all this new infrastructure, then I think that we could see a lot greater increases going forward.

Yeah, that's what I wanted to ask. Are there regulations in the works that would help some of this, or are folks just gonna kind of have to sit there and take it?

Yeah, so what we need are some reforms to basically how regulators and utilities spread the costs of new infrastructure. The traditional method of just socializing costs to everyone is not appropriate when we have just a few of these facilities, which just so happened to be owned by the wealthiest corporations in the world. We have to make sure that these companies are paying for the costs of all of this new infrastructure, So we're starting to see some movement. In that direction, it can be tricky because some aspects of this are regulated by states, other aspects are regulated by the federal government and like so many issues, it's hard to get everybody on the same page and also to align different states that may have different interests here as well.

'Loudoun County, Virginia, the site of, you know, America's so-called data center alley. They claim that revenue from these centers have helped lower residents' property taxes and that can help offset rising electricity costs. Does that resonate with you?

It certainly resonates me if there may be benefits to these facilities and that communities ought to have a say about whether or not these facilities come to their communities. And if they do come, there ought to be some benefits from this development to those communities. But rates paid in Loudoun County, those same rates are paid in other counties that don't get that tax revenue. Typically, Dominion Power is the main utility down there in Virginia. And it has the same rate structures for residential rate payers in Loudoun County and in every other county that it serves.

'So even if you don't live right next to one of these things, you're not getting the same benefits, but you might get the same drawbacks. Right, yeah, exactly. I've heard from some tech experts that we could be on the cusp of an AI bubble, that there's all this circular financing and these sky-high valuations that could just be propping up a product that does not actually warrant the hype. So I guess I'm wondering what happens if that comes to pass and we don't actually need all these data centers going forward.

Yeah, so you're raising a really important risk here, which is that the power industry could build a whole lot of new infrastructure in anticipation of these computing facilities that for one reason or another never materialize. And then the utilities go to their regulators and say, we want everybody else to pay for all these power lines and power plants that we built, even though there's no data to cover a single penny. Of those costs. So that's a real risk. We're starting to see regulators to their credit take a more proactive approach. And so one way to minimize that risk is before a utility builds any of this infrastructure, it has to have a legal contract in place with the potential data center that says you are going to pay for some portion of this, ideally all of it, but usually it's just a portion of it, you know, regardless of whether this facility. Ever operates and ever consumes energy because we want to make sure that this industry is on the hook, not the public for this infrastructure build out.

'Oh yeah. So you mentioned how some of the biggest corporations, these tech companies are playing an outsize role in all this. You actually co-wrote a paper earlier this year called extracting profits from the public, how utility rate payers are paying for big techs power. And in light of that, I guess I'm wondering for the average person who may just not be that keyed in to AI, may not use it a ton in their daily life and are just feeling like I don't use this stuff. What do I have to do with this? Why do I to pay for it?

'What can they do? Well, even if you're not using it, I still don't think you should be paying for the energy of these facilities. Most businesses, every business uses energy and they just have to build the cost of that energy into the prices that they charge for their products and services. And I think that these tech companies should be no different. It's hard to say sort of what an individual should be doing. I think this issue, thanks to shows like this and reporting around the country is getting- more public attention. And that's important to making this an issue that rises to policymakers' attention. And they're the ones really that need to take action here. As I said, we have these state utility regulatory bodies in every state that are in charge of this issue. They take direction from state legislators and governors. And so I think the role of the public here is to make sure that your voices are heard on high utility bills, that those complaints should be directed. To your local utility who in turn is regulated by the state utility commissions and make sure this issue is front of their agendas.

Ari Peskoe is the director of Harvard Law School's Electricity Law Initiative. That's it for us today. We're back on Wednesday. Thanks for listening.