Recent polling from Morning Consult has shown that voters are assigning the blame for rising energy costs to data centers. When energy bills climb, voters are understandably looking for explanations. In today’s economy, data centers, which power AI, cloud services, streaming services, and more are a natural and easy target.
Journalists and lawmakers alike have been raising alarms about their electricity usage, making consumers form a natural link of the correlation between the two.
However, data centers are not the primary drivers of rising energy costs, nor are they reckless consumers of electricity. In fact, data centers are constantly innovating to find ways to be disciplined in their energy use. The real challenge isn’t that power demand is growing; it’s that lawmakers aren’t embracing a policy agenda that unleashes energy supply to grow with it and sustain it.
Data centers represent a small fraction of the energy consumption around the country. In 2023, data centers accounted for about 4% of the total consumption across the nation. While some projections have that figure rising to as much as 20% by 2030, it is still a fraction compared to other industrial use cases or residential and transportation sectors. Considering how much that usage delivers, a ton of compute and immediate access to information for consumers and businesses alike, that is incredibly efficient.
Because electricity is often one of data centers’ biggest operational expenses, operators have strong incentives to minimize waste. Some of the innovations they rely on to achieve that minimization include:
- Advanced cooling systems: Leveraging both outside air cooling and liquid cooling dramatically cuts the energy overhead for temperature control.
- Power-management and workload-shifting software dynamically adjusts server loads to minimize electricity waste.
- Highly tailored hardware and chips specialized for high-density computing tasks improve the performance.
Modern data centers at leading companies like Google utilize many of these tactics. Because they pay for every kilowatt-hour they use, they have a strong incentive to be a disciplined actor in this space. Managing that cost allows them to be more efficient and profitable, delivering results to shareholders. This is an underreported and underappreciated incentive.
When looking across the national stage, national energy prices are driven by a multitude of other factors, like fuel costs, transmission bottlenecks, and regulatory structures than by data center energy demand. In fact, as Andy Masley explained on his Substack, data center activity has not contributed to changes in household electricity costs, and it might even be associated with lowering costs.
Furthermore, while American prices surged 34% from 2020 to 2025, the fastest five-year increase in recent history, a deeper analysis shows that areas with high concentrations of data centers have a minimal correlation with residential rate increases.
It is impossible to ignore that energy demand is rising. That is because the world is collectively and rapidly digitizing. As the world increasingly leverages cloud computing, AI technology, remote work, e-commerce, and streaming services, the entire economy is becoming more data-intensive. The growth we are seeing is a reflection of a broader economic transformation happening before us, not an indicator of waste.
The more computing is integrated into our varying sectors, the more data-center capacity we are going to need. It is important to note that this demand is being created by real value creation: better services, more efficient businesses, and global competitiveness. In artificially suppressing that demand via poor policy, lawmakers would be actively choosing to make their constituents worse off by stifling growth.
If demand for energy is rising, the answer is not to cut back. It’s to build!
The real bottleneck isn’t data-center demand, it’s our hesitance to unleash the ability to expand generation and transmission to meet that demand.
Across many states, building new power generation, upgrading substations, and constructing new transmission lines face long permitting delays, regulatory drag, and local opposition. That slows the supply response, squeezing available power and exacerbating the very issue consumers are worried about, rising prices.
Instead of putting the focus on vilifying data centers, we should be encouraging policies that:
- Streamline the permitting process for power plants and transmission infrastructure
- Reduce regulatory friction surrounding grid upgrades and expansion
- Encourage private investment in generation and transmission capacity.
- Allow for tech-neutral expansion. Whatever power meets the needs optimally and cheaply.
Allowing supply to expand in response to increases in demand ultimately allows for prices to stabilize, robust expansion of the grid, and ensures that the economy can continue on its growth trajectory.
At the end of the day, data centers are not the villains in the energy story. They operate under relentless economic pressure to minimize waste and deliver massive value in the process.
If the U.S. wants to remain a leader in the digital age, it must do its part to ensure it has the power needed for those technologies to flourish. Build the supply. Future-proof the grid. Allow innovation to play a hand in powering economic growth.
While some advocates would rather lecture voters over data-center “overconsumption”, they are ignoring the fundamental question: why is this an issue to begin with? Why don’t we have the capacity to support this? Addressing those questions will solve the key conflicts surrounding this issue.
James Czerniawski is the Head of Emerging Technology Policy at the Consumer Choice Center.
