Energy bills on the rise, driven in part by power-hungry AI

Utility customers across the country are facing higher electricity bills as power companies seek large rate increases and artificial intelligence data centers strain existing grids.

According to KTLA consumer reporter David Lazarus, rate requests and approvals totaled $34 billion in the first three quarters of 2025. That’s more than double the $16 billion sought over the same period last year, according to a report from the nonprofit Power Lines.

Residential electricity prices rose 11% from January to August, the federal government says, a pace nearly four times the rate of inflation.

“The increases are due in part to the usual things: improving our aging infrastructure, and that’s understandable,” Lazarus said. “But AI is also playing a significant role here.”

Lazarus noted that fast-growing AI data centers are incredibly power-hungry and often require massive amounts of electricity to function and fresh water to cool equipment.

While many facilities are building their own power sources, including some opting for nuclear, they are still years away from completion.

In the interim, data centers will “be siphoning power off from the existing grids, which means shortages, which means higher rates,” Lazarus said.

According to the Pew Research Center, the total annual U.S. electricity consumption hit a record high in 2024, and it’s likely that records will continue to be set if data centers continue expanding at their current pace. Researchers also note that it can be difficult to fully distinguish how much of a data center’s power demand comes from AI technology alone.

As for how to prevent major price hikes due to the incoming “robot takeover,” Laz says consumers have limited options.

Customers struggling with bills should first contact their utility providers to seek payment plans or short-term arrangements. “They’re not going to let you off the hook, make no mistake, but they can at least get you through the hump,” he said.

He also encouraged residents to make their voices heard with state utility regulators, saying the Public Utilities Commission exists to receive and review public input on rate increases.

“These folks will respond if, in fact, there is a groundswell of criticism about rising rates,” Lazarus said.

Ultimately, though, consumers should prepare themselves for rate hikes to become the new norm.

“This is going to be a perennial problem for years to come,” Lazarus said. “The AI industry clearly is not going away—in fact, it’s driving the U.S. economy at the moment—and this industry is thirsty.”