The rise of artificial intelligence and cloud computing has triggered a data center boom across the United States, with billions of dollars pouring into massive new facilities. But as these energy-hungry giants multiply, communities from North Carolina to Michigan are grappling with a tough question: Who pays the price—literally and figuratively—when tech’s appetite for power outpaces the grid?
On October 14 and 15, 2025, the North Carolina Utilities Commission gathered for a high-stakes technical conference in Chapel Hill to tackle the elephant in the room: the growing energy needs of computer data centers and the ripple effects on electric bills and the environment. According to the Southern Environmental Law Center (SELC), which spurred the meeting and represents groups like the Sierra Club, Southern Alliance for Clean Energy, and Vote Solar, the stakes couldn’t be higher. The commission’s decisions could shape not just the state’s energy future, but also the financial well-being of millions of residents.
At the heart of the debate is Duke Energy’s approach to powering this new wave of data centers. The utility’s current plan, as reported by SELC, leans heavily on building new gas-fired power plants—an expensive and polluting proposition. Critics warn this could saddle existing customers with higher bills while ramping up climate-heating emissions. "Regulators, utilities, and tech companies have an obligation to protect existing customers and households from the potentially massive impact of data center energy demand, and growing demand from other new energy-intensive businesses," said Jeremy Fisher, Principal Advisor for Climate and Energy at the Sierra Club, during the conference.
But are these new power plants even necessary? An expert report commissioned by SELC, titled "Uncertainty and upward bias are inherent in data center electricity demand projections," found that utility forecasts for data center growth are riddled with uncertainty and systematic overstatement. The report points out that projected electricity demand often outstrips the realistic capacity of global semiconductor chip production, suggesting that many of these facilities may never materialize at the scale utilities claim.
That uncertainty carries real risks. Duke Energy’s long-term resource plan proposes building methane gas power plants, but critical components are facing supply chain backlogs, making them unavailable for at least five years. If the forecasted data centers don’t show up—or if their energy needs are overblown—North Carolinians could be left footing the bill for costly, underused infrastructure. And with volatile gas prices, any spike gets passed straight to customers, compounding the pain for families already paying a disproportionate share of power plant costs.
"Now is the time to put rules in place to serve the real needs and weed out the speculators," argued Eddy Moore of the Southern Alliance for Clean Energy. "And there is no reason not to let these big industries provide their own clean power instead of adding to the electric system costs that we all pay." SELC and its clients are pushing for a mandatory large-load tariff with customer protections, and even a "Fast Forward" tariff that would require major users to invest in clean energy instead of more methane generation.
While North Carolina wrestles with these policy choices, similar battles are playing out nationwide. According to Tom’s Hardware and The Washington Post, the past year has seen a trillion dollars’ worth of investment and deals flow into the AI data center sector. But with that money comes mounting opposition. In Saline Township, Michigan, a proposed 250-acre AI data center by Related Digital (RD) sparked a legal showdown. The township, wary of the project’s power and water demands, initially tried to block it. RD and some residents—those eyeing land sales or welcoming the investment—sued. To avoid a drawn-out court fight, the township settled, securing concessions like water usage limits and millions for local public services.
Yet, this uneasy compromise is hardly unique. Across the U.S., cities and towns are increasingly wary of the downsides that come with data centers: soaring energy and water consumption, noise, pollution, and the risk of higher power bills. While tech companies tout job creation and tax revenue, the reality often falls short. As Tom’s Hardware notes, construction jobs vanish once the centers are built, and the facilities themselves require only a handful of permanent staff. Meanwhile, neighbors may face constant noise and increased pollution, as seen in Memphis, where protests erupted over an xAI data center powered by natural gas turbines.
Some cities are pushing back hard. In St. Charles, Missouri, developers wanted to build a 440-acre data center near vital wells, but faced fierce criticism over water use and noise. The city council responded with a one-year moratorium on new data centers, passing it unanimously after developers withdrew. At least one other city has imposed a similar ban, while Lordstown, Ohio, opted for permanent restrictions—though it made an exception for a Softbank-backed project that repurposes a former GM factory to make data center components, not host servers.
Elsewhere, the tide is turning against unchecked data center expansion. In Wisconsin, Microsoft scrapped a planned facility, while Pennsylvania is grappling with spiking power prices linked to data center demand. These stories echo a growing national anxiety: Who should pay for the grid upgrades required to support these energy-hungry operations? And how can communities ensure they’re not left holding the bag when costs rise or promises fall flat?
Online, the debate rages on. Some argue that AI and data centers should face new infrastructure taxes, given their outsized impact on local utilities and the environment. Others point out that for years, the U.S. had surplus energy and low costs, but the rapid surge in demand has outpaced infrastructure investment. "We just need to start passing laws that the ones causing the issue are ones funding its growth," wrote one commenter on Tom’s Hardware, suggesting that companies should be required to generate the resources they use—or face shutdowns if they fail to deliver.
There’s no easy answer. States are tempted by the promise of tax revenue, but as a CNBC report highlighted, the actual fiscal benefits can be modest once tax breaks and infrastructure costs are factored in. And while some exemptions require job creation, the long-term economic impact remains uncertain. Ultimately, the key question for policymakers is how to balance the lure of tech investment with the need to protect residents from rising costs and environmental harm.
Back in North Carolina, the Utilities Commission’s technical conference represents a pivotal moment. As Nick Jimenez, senior attorney at SELC, put it, "The crucial next step will be to turn the lessons from the hearing into action to save customers money and clean up the grid while allowing our economy to grow. I’m excited about the opportunity here."
As AI data centers mushroom across the country, the challenge for regulators, utilities, and communities is clear: find a way to harness the benefits of digital transformation without letting the costs—financial, environmental, or social—spiral out of control.
