While your kids are using Chat GPT for therapy, and your influencer cousin is creating anime superhero movies with Sora 2, is your electricity bill headed for the moon?
That’s the driving consumer-policy question asked pointedly by artificial intelligence consultant Brandon Owens and Colorado School of Mines public policy professor Morgan Bazilian. They team up for op-eds clanging alarm bells for consumers and policymakers who must cope with AI’s exploding demand for limited electricity supplies.
“While the world marvels at what large language models can write or design, fewer people are asking a more basic question: who’s paying to keep their servers running?” the duo wrote in a piece published by The National Interest, a magazine published by the Center for the National Interest public policy think tank.
They warn that without more public attention, the AI giants will be “socializing” the enormous energy costs of running their suddenly ubiquitous programs, while privatizing the enormous profits. Beyond the simple economics of their demand pushing up prices for all consumers, the AI industry possesses other advantages, the authors argue: AI giants possess hidden information and pipelines that allow them to control the flow of energy to their advantage.
“Electricity demand is no longer predictable — it is algorithmically spiked and AI-governed. Policy is lagging. Capital is stampeding. And the consequences are arriving faster than most institutions can measure — let alone manage. This is not a temporary distortion. It is a structural realignment of energy, intelligence, and infrastructure,” according to Owens’ consulting firm.
It’s not just Virginia being overwhelmed by data center construction happening far faster than regulators can keep up. CoreSite is building a highly visible data center in the heart of north Denver, looming over Elyria-Swansea neighborhoods battered around by larger economic forces for more than a century.
We hosted a Q&A session with Owens this week to further decode the expert warning signals.
Sun: What are the primary warnings you are observing that have led you to believe that the rapid growth of AI data centers and data companies is a threat to electricity consumers?
Owens: There’s two things there. One is scale and the other is concentration. So AI data centers are adding very large, 24/7 loads in clusters that are outpacing normal grid planning cycles. That means utilities need to accelerate adding substations, transmission lines and sometimes even new firm generation capacity to serve that growth. And much of the cost is traditionally recovered through rates, which means that ordinary customers are going to bear part of the bill.
Nationally, the Department of Energy estimates that the data center load has tripled over the last decade, and it could double again in the next couple of years. And so it just creates this urgency, this backdrop that tells us about the increasing scale and concentration. There have been some reports on electricity prices going up, and some debate about, hey, what’s this from? We say it’s from data centers. Others say, it’s from fuel prices in general, inflation. I think that really misses the point. It’s Economics 101. You have essentially a fixed supply, because you can’t add power quick enough, and surging demand, and that demand surge is only going to increase. And what happens when you have fixed supply and growing demand? Prices are going to go up. So if we haven’t seen it happen yet, we know it’s going to happen. It’s just a matter of time.
Sun: You’ve said in your op-eds, “Households are quietly paying the price.” Tell us more about that.
Owens: Well, this has to do with the asymmetry in how hyperscalers and data center owners procure power through long-term contracts, and are able to hedge and insulate themselves through price spikes, through those contracts, and in some cases, build their own power supplies. And then households, who basically just pay their electric bills and don’t have the ability to hedge and insulate themselves from those price hikes. And so we have this asymmetry in the market, and as those prices go up, and as hyperscalers continue to hedge and embark on those long-term deals, it’s going to be consumers and householders holding the bag and dealing with those higher prices.
Sun: So the data centers are making far better deals for themselves than the consumer is able to?
Owens: Well, they’re doing the best they can, they’re optimizing within the existing system, and they have every right to do that. They just have more means at their disposal to do that.
And so they’re doing what makes economic sense, and they’re doing it in the cleanest way possible as well. They’re trying to procure renewable energy to the extent possible, so they’re doing the right thing. The challenge is, consumers don’t have access to many of those tools, so they’re going to be subject to those price increases. Even the ones who aren’t using AI tools and data centers.
And then the other issue is that, because they need power, so much power, so quickly, and there’s a long queue to get new power on the grid. The highway is backed up. So the quickest thing you can build often is natural gas-fueled electricity. And so even though the hyperscalers are trying to build renewable energy, and trying to do it in a clean way, if there’s a big demand surge, there’s going to be a default to carbonized fossil fuel, and so it’s going to be less clean.
Sun: Colorado has prided itself among the states in a targeted, mandated push toward clean renewable energy for electricity. In addition to driving up all electricity prices, does the growth in demand also threaten to reverse that progress for us and for others?
Owens: I think Colorado is at an inflection point. There already is a data center footprint on the Front Range. And there’s a new hyperscaler campus you’re familiar with, the QTS Aurora-Denver project, And there’s this push and pull, can we meet the hyperscaler data center demand and continue to decarbonize our power system? So far, Colorado has done very well and has the best intentions. I don’t know how it’s going to play out, but tensions are going to intensify.
Sun: There’s already been some controversy in Colorado with Xcel and whether private companies, big buyers, are able to make a better deal for themselves than the average consumer, and whether that’s legal. And I’m curious, is that happening in other parts of the country? Is that going to be one of the big questions?
Owens: Within prevailing systems, it is legal. Within Colorado, they’re allowed to achieve special rates, economic development rates for qualifying large loads. So everyone’s operating within the legal framework. The key is in where this is headed: to try to get the costs of the infrastructure required to be borne by hyperscalers, data center owners, rather than spread across the system, where consumers will have to pay for those at the end of the day. Different states are going to travel down different paths, but at the end of the day, it’s about making sure that those costs are not socialized for the entire rate.
Sun: One of my favorite quotes about both policy and journalism is a Michael Kinsley saying: The scandal isn’t what’s illegal, the scandal is what’s legal. And so I think that Colorado law you’re referring to, people might have thought: That certainly passed and had support, but now the people see it in practice, they’re thinking, wait, does that seem fair?
Owens: I’m a glass half-full person. I think that stuff was passed with the best intentions and the regulators are trying to do the right thing. I think the challenge is that this is moving so fast, and people are trying to get a hold of it and try to figure out how to build a fair system, and we haven’t really worked out the bugs and the details just yet. It’s like a freight train coming down the track. The devil’s in the details. And it’s going to be an increasing point of tension, because these bills are going to start to go up, and that’s where inflation and affordability are going to be an increasing concern. They’re going to lose public trust pretty quickly, and then you’re going to end up in a crisis mode.
Sun: That leads us to another question of, whether it’s the Public Utilities Commission in Colorado or a parallel organization in another state, and the consumer counsel/advocate systems that usually accompany those … aren’t they the ones set up to handle this? Are they up to the task, or does there need to be a new kind of structure to mediate this?
Owens: I think that is what they were set up for. I think they are up for the task. I don’t think you need another governmental body. I don’t know whether they’re going to be able to move quickly enough or succeed. I don’t know how it’s going to unfold.
Sun: For Colorado or other states, you have the consumer structure in place, but you also have to have individual commissioners talking about it. It’s still politics and policies, still personality-driven to some extent, and someone needs to take up the charge for consumers and really be on the lookout for them.
Owens: Yes, and that starts with public awareness. Presumably, you’re going to help with that, but people need to understand the problem. It’s an emerging issue, and there’s technical detail, and it’s complicated, but there’s a level of public awareness that needs to occur. So we know what the problem is, and we know what needs to be solved. And the challenge in the U.S. is that everything gets solved differently on local turf, and in each state. There’s all these different sorts of experiments occurring around the country, and so it’s going to be sold differently and at different times and different places everywhere. Colorado’s fortunate that it’s not Virginia, right? The problem is acute there, because of the amount of capacity that’s being built.
There are some areas of the country where the rate of data center building is unbelievable, and they are already seeing the strain on prices, the strain on the system and the infrastructure cost. The trains have left the station. So to that extent, Colorado’s got a little bit of time to kind of head this off and try to deal with it.
Sun: Colorado has a governor’s election in 2026, what would you tell the next governor of Colorado to do or be prepared for in regards to all these things?
Owens: It’s an issue around the energy system and energy infrastructure. One of them is about affordability and equity that needs to be addressed immediately, and so I don’t know if it’s a governor’s commission, but this needs to be prioritized. Because the grid overall is in crisis related to demand outstripping supply, and it’s only going to get worse, and data centers are one key aspect of that. So we need to take the energy system very seriously, and that’s against the backdrop of inflation and rising costs and the economic strain that everyone is feeling. It’s a very serious issue.