Basics
Energy Affordability During an Era of Increased Electricity Demand for AI Data Centers
Energy & Utilities Technology
Published on September 1, 2026
Explore This BasicEnergy affordability and the construction of data centers, including for the use and development of Artificial Intelligence (AI), are increasingly important issues, not only in Congress but also in rural and urban communities across the country. As data centers continue to be developed across the US to support the growing use of generative AI models, move from on-premises compute to more efficient cloud computing, and the rising national security concerns about maintaining US competitiveness in AI relative to China, it is clear that demand for electricity for AI data centers will continue to rise.
This Basic will provide an overview of what AI data centers are, where they are located, how they function, and how they affect electricity usage and rates, water consumption, and overall affordability for Americans.
Links to Other Resources
- Bloomberg: Big Tech to Spend $650 Billion This Year as AI Race Intensifies
- Congressional Research Service: Data Centers and Their Energy Consumption: Frequently Asked Questions
- CoreSite: Top 10 U.S. Data Center Markets and Why They Are Hot
- Edison Electric Institute – Charles River Associates; Retail rate trends in the US
- Environmental and Energy Study Institute: Data Centers and Water Consumption
- Environmental Law Institute – AI’s Cooling Problem: How Data Centers Are Transforming Water Use
- Eurostat: Glossary: Terawatt-hour (TWh)
- IBM: What is an AI data center?
- Microsoft: Inside the world’s most powerful AI datacenter
- NPR: Data centers are booming. But there are big energy and environmental risks
- Pew Research Center – What we know about energy use at U.S. data centers amid the AI boom
- Searchlight Institute – Seizing the Data Center Buildout for Grid Modernization
- The Guardian: The AI boom is heralding a new gold rush in the American west
- U.S. Department of Energy – Electric Grids
- World Resources Institute – From Energy Use to Air Quality, the Many Ways Data Centers Affect US Communities
- Data Center Dynamics – How much capacity is in aging data centers?