Data centers’ utility consumption leads to higher bills for consumers

There is growing concern over how much energy and water big tech data centers are using, and that it could lead to higher bills for consumers.

Data centers are a booming business for states, bringing jobs, but they also consume a significant amount of electricity and water. Nationally, the average electricity rate for residents has risen more than 30 percent since 2020, after years of relatively modest increases. Much of that increase has been driven by utilities’ efforts to catch up on deferred maintenance and harden their grids against extreme weather.

But recent reports expect data centers will require expensive upgrades to the electric grid, a cost that will be shared with residents and smaller businesses through higher rates unless state regulators and lawmakers force tech companies to cover those expenses.

Joanna Allhands, Reporter at The Arizona Republic and azcentral.com, joined “Arizona Horizon” to discuss more on these recent reports and whether or not they are affecting consumers.

Although people are concerned about how much energy and water these data centers will use, according to Allhands, the numbers aren’t that concerning. About 4% of energy goes to data centers, and when it comes to water, that drops to less than 1%.

“It’s hard to know, especially for each facility, because they’re not necessarily reporting this,” Allhands said. “At least the estimates are that this year, about 3,000 acre-feet goes to data centers.”

One data center development project in Tucson, Project Blue, was criticized primarily for its potential use of water. In order to encourage development, developers of Project Blue assured the city that they would not take new water.

“The developers were saying, not only are we going to use recycled water, we’re going to click into the system to use water that’s already been used more than once,” Allhands said.

Even with promises of recycled water for some data center developments, there is still a fear that water will become an increasingly scarce resource.