MICHEL MARTIN, HOST:
Tech companies invested hundreds of billions of dollars this past year in data centers, which use enormous amounts of electricity. Planet Money's Keith Romer explains the connection to consumer power bills.
KEITH ROMER, BYLINE: Electricity prices have been going up for a lot of Americans, including a retired couple in Granville, Ohio - Ken and Carol Apacki.
(SOUNDBITE OF TYPING ON KEYBOARD)
ROMER: Every month for the last five years...
KEN APACKI: And here's my spreadsheet.
ROMER: ...Ken has recorded every charge on his electric bills.
K APACKI: And so here we start back in July of 2020.
ROMER: In 2020, they paid between 11 and 12 cents per kilowatt hour for power.
K APACKI: And down here in 2025, it's 19.
ROMER: Up 60%. Ken's wife, Carol, suspects the price jump has to do with some new construction nearby.
CAROL APACKI: A hundred and thirty data centers in Central Ohio here. I mean, that is amazing.
ROMER: Let's break down how these data centers could be raising their bills. There are three basic components to an electric bill. The first is distribution. Think the local power lines that bring electricity the last mile to your home. Marc Reitter runs the Apackis' local utility company, AEP Ohio.
MARC REITTER: The grid supports everybody. It's almost a universal service.
ROMER: That grid has to be expanded to bring lots of power to data centers. But the way the electricity system is set up, it's not just data centers that pay for that expansion. It's everyone.
REITTER: And everybody pays fair share. That's the crux of the model - has been for a long time.
ROMER: Reitter's company recently designed new rules to make data centers pay for more of that expansion. But those rules don't extend to the next component of the Apackis' bill - transmission. Think the high-voltage power lines that bring power from far away to your town. The Apackis' transmission company is spending billions of dollars building out its grid for data centers, costs which filter down to residential customers. Still, more than half of the Apackis' increased electricity prices come not from distribution and not from transmission, but from the third component of their bill - generation. Think the power plants that make electricity.
Cathy Kunkel works for the Institute for Energy Economics and Financial Analysis, a think tank focused on sustainable energy. She says in the region where Ken and Carol Apacki live, prices for generation have gone way up, in part because of data centers' insatiable hunger for electricity.
CATHY KUNKEL: The demand is there, and the supply is maybe not.
ROMER: And those high prices? They are also being shared, even though a lot of that price increase was a result of the new data centers tech companies are building.
KUNKEL: I think it's almost inevitable, the way that these structures are set up, that ordinary people are going to end up subsidizing the wealthiest industry in the world.
ROMER: Unless, Kunkel says, we reform the rules so that more of the costs of expanding electricity infrastructure are paid by the data centers themselves.
Keith Romer, NPR News.
MARTIN: Keith's full story, tracing how data centers affect electricity pricing, is on the Planet Money podcast.
(SOUNDBITE OF THE JAZZ JUNE'S "FALLING ASLEEP ON LINCOLN DRIVE") Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR鈥檚 programming is the audio record.