On Tuesday, U.S. Senators Elizabeth Warren (D-Mass.), Chris Van Hollen (D-Md.), and Richard Blumenthal (D-Conn.) initiated an investigation into how technology companies plan to mitigate the impact of data center projects on local electricity prices, which have reportedly surged by as much as 267 percent in the last five years in areas with significant data center activity.

The Senators noted that electricity prices tend to rise when utility companies expand infrastructure to accommodate the energy demands of data centers, which can consume power equivalent to that of entire cities. Additionally, they pointed out that local residents often face unexpected increases in their electricity bills, frequently unaware of the approval of nearby data center projects due to a lack of transparency from tech companies.

The Senators criticized practices such as the use of non-disclosure agreements (NDAs) by tech firms, which prevent public officials from sharing information with constituents. They also highlighted the use of shell companies to obscure ownership of data centers and the requirement for landowners to sign NDAs during land sales, often under vague terms.

States like Virginia, which hosts a high concentration of data centers, could see average electricity prices rise by an additional 25 percent by 2030. The Senators emphasized that the interconnected nature of power grids means that a data center in one state could lead to increased costs for residents in neighboring states.

The investigation targets major tech companies, including Amazon, Google, Meta, Microsoft, Equinix, Digital Realty, and CoreWeave, which have been accused of failing to genuinely address the rising costs for local residents while lobbying against regulations that would require them to bear a larger share of infrastructure costs.

For instance, Amazon has publicly stated its commitment to covering costs to prevent them from being passed on to consumers, yet it is also a member of the Data Center Coalition, which has opposed regulatory measures aimed at ensuring data centers pay a fair share of costs. Similarly, Google has faced scrutiny for opposing the establishment of a distinct rate class for data centers that would hold them accountable for their energy consumption.

The Senators pointed out that the current model of electricity ratepaying, which distributes costs among all users, was not designed for scenarios where a single customer demands as much energy as a large city. They raised concerns about reports indicating that tech firms are receiving discounts on energy costs while local residents face rising bills.

In response to the Senators' inquiry, some tech companies have not provided comments, while others, like Digital Realty, expressed a willingness to collaborate with elected officials to enhance digital infrastructure.

The Senators are considering potential legislation to address the rising electricity costs that they argue disproportionately affect average Americans. They have requested detailed responses from the tech companies regarding their energy projections and the impact of their data centers on regional utility costs by January 12, 2026.

Among the questions posed, the Senators seek information on the financial incentives received by tech firms from local governments and how these compare to their lobbying expenditures. They advocate for a model where data centers contribute a greater share of upfront costs for energy infrastructure, particularly given the risk that some projects may not yield the anticipated energy demand.

Recent legislative actions in states like Utah, Oregon, and Ohio have established separate utility customer classes for data centers, incorporating financial safeguards such as upfront payments. Virginia is also considering similar measures.

While some studies suggest that data centers may have helped reduce electricity costs by distributing upgrade expenses across a broader customer base, the long-term implications of increased demand for AI and data center energy consumption remain uncertain. Experts warn that if data centers do not deliver the expected business to utility companies, consumers could face significant electricity bills without corresponding benefits.

The Senators' investigation reflects a growing concern over the balance of corporate power and community welfare, particularly as the energy demands of large tech firms continue to rise.