The rapid growth of data centers is quickly overwhelming utilities, undermining environmental goals, increasing public health impacts, and putting ratepayers at risk of dramatically increased costs for the infrastructure and extraordinary power demands of these facilities.

Loudoun County Data Center, photo by Hugh Kelly, PEC. Loudoun County’s data centers alone used over 1 billion gallons of water in 2023.

What are data centers?

Data centers are massive facilities that power cloud computing and our digital infrastructure, which are rapidly expanding across the United States. Once concentrated in a few regions, data center development has surged nationwide in recent years. The increasing demand for computing power, fueled by artificial intelligence and cryptocurrency, is placing unprecedented strain on the energy grid, land, water resources, and health of local communities.

Utilities are being pushed to build new power plants, often fueled by fossil fuels, to serve these facilities’ around-the-clock electricity needs. Without strong safeguards, households and small businesses could be left paying for costly infrastructure while communities face worsening air pollution, water stress, and land-use conflicts.

About 56% of the electricity used to power data centers nationwide comes from fossil fuels. Data centers’ projected electricity demand in 2030 is set to increase to up to 130 GW (or 1,050 TWh), which would represent close to 12% of total U.S. annual demand.

What are the risks of data centers?

The emergence of Artificial Intelligence (AI) is changing the internet. It is also changing the physical landscape of communities across the country as an influx of tech companies seek to build “hyperscale” data centers that support AI.

These facilities consume as much energy as a mid-sized city, like Orlando. They use an enormous amount of water, and occupy hundreds or even thousands of acres. The implications are significant for our communities, economy, ratepayers, and environment.

COST Big data centers need a lot of generation and transmission infrastructure, and for many utilities those costs are shared by all customers - including everyday household ratepayers. And if the AI boom shrinks, we could find a lot of utilities, and their customers, holding the bag for all of those costs.

CLIMATE Utilities are rushing to build gas and the administration has promised to bring zombie coal plants back, all to meet the needs of data centers, putting critical climate progress at risk.

POLLUTION Data centers use back up diesel generators, sometimes hundreds of them, which can produce more power than utility power plants. And while those are supposed to be for emergencies only, they might start running a lot more, they’re huge sources of soot and particulates.

5M gallons of water used per day

267% energy cost increases near data centers

Utilities are rushing to build more fossil fuel plants to meet the needs of data centers, putting critical climate progress at risk

Big data centers need a lot of generation and transmission infrastructure. To meet the rush to serve data centers, utilities are proposing a historic build out of new fossil gas power plants. See our gas plant tracker to learn more about the wave of new gas plants planned in your state and across the country.