Tech Companies Grapple with Rising Power Costs for Data Centers

Proposals floated to have data centers pay for new power plants and infrastructure

Published on Feb. 25, 2026

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As tech companies invest billions to build energy-hungry data centers, the increased demand for electricity is driving up power bills for consumers. Lawmakers are considering proposals to have data centers pay for new power plants and infrastructure, or even requiring them to build their own power sources. Experts warn that flawed policies could saddle Americans with higher electricity bills or put the U.S. at a disadvantage in the global race for AI dominance.

Why it matters

The growth of data centers is straining the power grid, leading to concerns about rising electricity costs for consumers. Policymakers are trying to balance the need for new infrastructure investment with the risk of burdening ratepayers or hindering the U.S. tech industry's competitiveness.

The details

Tech companies are building data centers at a rapid pace, which can require new transmission lines, power generation, and other grid upgrades. The costs of these investments are often spread across an entire region, but some companies like Microsoft and Anthropic have pledged to cover 100% of the grid upgrade costs for their facilities. However, experts say the accounting is complex, as it's difficult to attribute specific upgrades to individual data centers. There are also concerns about utilities planning for data centers that never get built. Proposals include requiring data centers to pay for new power sources, allowing them to build their own generation, or even imposing a moratorium on new construction to give policymakers time to develop the right approach.

  • In January, the White House proposed that tech companies help pay for new power plants added to the grid on their behalf.
  • Last week, Senators Josh Hawley and Richard Blumenthal introduced a bill that would require data centers to build their own energy sources.

The players

Rachel Mural

Senior research associate at Harvard's Belfer Center for Science and International Affairs.

Christopher Knittel

Professor of energy economics at the Massachusetts Institute of Technology.

Senator Bernie Sanders

Independent senator from Vermont who has endorsed a data center moratorium.

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What they’re saying

“The question of how we spread out these costs over the right end-users is really, really challenging because people technically are benefiting from these upgrades.”

— Rachel Mural, Senior research associate (New York Times)

“If it's just a few industrial customers with behind-the-meter power plants, it doesn't really matter. But as data centers grow bigger and more plentiful, these things are going to matter so much.”

— Christopher Knittel, Professor of energy economics (New York Times)

What’s next

Lawmakers are expected to continue debating proposals to address the impact of data centers on the power grid, including potential legislation and regulatory changes.

The takeaway

Policymakers face a delicate balance in addressing the strain that data centers are placing on the power grid, needing to ensure grid reliability and affordability for consumers while also maintaining the U.S. tech industry's global competitiveness.