The surge in data center construction is facing close scrutiny from the U.S. political establishment, as its immense pressure on the power grid and direct impact on consumer electricity prices have become increasingly acute political and economic issues in the United States.

On November 10, according to media reports, a group of left-wing senators led by Senator Sanders has written to the White House and Commerce Secretary Rutenberg, demanding that the U.S. government explain how it will address the rising electricity prices exacerbated by the expansion of data centers.

They pointed out that tech giants such as Meta, OpenAI, and Alphabet are driving a historic infrastructure build-out across the country, with their massive power demands placing financial strain on ordinary households.

The letter was harsh in its wording, stating that the Trump administration's policy of rapidly approving these projects is forcing American citizens "to compete with billion-dollar companies for home lighting."

According to data from the U.S. Department of Labor, residential electricity bills rose 5.1% year-on-year in September this year, becoming a factor pushing inflation above the Federal Reserve's target.

Although AI development has injected strong momentum into the U.S. economy and capital markets, the enormous energy consumption and costs behind it are raising widespread concerns from local communities to the federal Congress, and may pose new regulatory risks for the future expansion plans and related investments of tech companies.

Senators Demand Federal Intervention to Ensure Tech Giants Bear Costs

The core demand in the letter is for the federal level to establish regulatory safeguards to ensure that the huge costs of data center construction are borne by the large tech companies that create them, rather than being passed on to ordinary consumers.

In addition to Sanders, the letter was co-signed by Democratic Senator Chris Van Hollen of Maryland, Democratic Senator Ed Markey of Massachusetts, and Democratic Senator Ron Wyden of Oregon.

Notably, Wyden's home state of Oregon is one of the largest data center markets in the country. Democratic Senator Richard Blumenthal of Connecticut told the media:

The focus is not to stop data centers, but to ensure that the costs are borne by the giant companies that create them and to control or even reduce electricity prices.

Blumenthal added that he is concerned that electricity regulators and local officials "may succumb to the immense financial pressure these companies can bring." The lawmakers called for the establishment of "a safeguard and oversight mechanism at the level of the U.S. government" to address this challenge.

Rising Electricity Prices Fuel Inflation, Becoming a New Political Issue

Trump promised during his campaign last year to cut energy costs by 50%. Although gasoline prices have fallen slightly, the continued rise in electricity prices stands in stark contrast.

Data from the U.S. Department of Labor shows that the 5.1% year-on-year increase in electricity prices in September was one of the factors keeping overall inflation high. According to reports, concerns about rising electricity bills have helped Democrats win in recent elections in New Jersey, Virginia, and Georgia.

Electricity markets have always been opaque, and price increases may stem from upgrades to transmission lines, fluctuations in commodity prices, and costly fire prevention measures, which vary by region.

In many areas, local activists have begun organizing against large tax breaks for data centers. Analysts warn that data centers are exacerbating power pressure in certain regions because development is happening faster than utility companies can increase their generation capacity.

On energy choices, U.S. government officials tend to power construction through natural gas and coal, while cutting subsidies for renewable energy.

As a response, many developers have started seeking to build their own independent power sources to avoid supply chain bottlenecks and the cumbersome regulatory challenges of connecting to the traditional grid.

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