AI is driving up electricity bills primarily through the massive energy demands of data centers running complex models.
Training and operating large-scale AI systems, like those used for generative tasks or machine learning, require significant computational power, often powered by energy-intensive GPUs.
For instance, training a single large language model can consume as much energy as several households use in a year, with estimates suggesting a single AI model training run can emit over 600 tons of CO2 equivalent, largely due to electricity use.
Data centers, which house these operations, are projected to consume 4-6% of global electricity by 2030, up from about 1-2% today, as Artificial Intelligence adoption grows.
For consumers, this can translate to higher electricity costs in two ways:
Direct Usage
If you use AI-powered services (e.g., cloud-based AI tools, smart home devices, or even streaming platforms with AI-driven recommendations), your devices may consume more power, especially if they’re running constant background processes or querying remote servers.
Indirect Impact
Utilities may raise rates as grid demand surges from AI data centers. In regions with heavy data center presence, like Northern Virginia or Silicon Valley, local grids are strained, potentially leading to higher costs for everyone.
Some reports indicate that data center electricity demand in the U.S. could double by 2030, pushing utilities to invest in costly infrastructure upgrades, which get passed on to consumers.
Energy Optimization
It’s been said that AI can optimize energy use for smart grids and AI-driven appliances can reduce household consumption by up to 10-20% in some cases.
Though Artificial Intelligence might optimize energy use in the long run, we already know that once the cost goes up, it never comes down.
We’ve seen the historical price increases for services and products over the years due to higher inflation. However, when the inflation goes down, the high prices remain.
Any savings that you might expect AI to deliver with regard to energy optimization will be negligible at best.
The net long term effect will lean toward higher electric bills due to the scale of AI’s energy footprint.
Saving Money
If you’re noticing a spike in your electric bill, check if your home devices (smart speakers, AI-enabled thermostats) are running constant updates or cloud queries, and consider auditing your usage patterns.
You might also save a bit of money on your electric bill by disabling the wi-fi on your thermostat, refrigerator, or any other item you might have in the home that consumes power via IoT connections.
AI also puts a strain on the batteries of your hand held devices, like your iPhone for instance. Turning off (or deleting) AI powered apps on your phone can extend your battery charge and life by a good margin.
Higher Prices Coming
NorthWestern Energy has already been raising it’s rates this year (with higher rates planned for the near future) and with the planned TAC Data Center expected to be built right here in Great Falls, our electricity rates will most likely more than double in just a few short years.
