Tech Giants and the Power Dilemma: Who Pays the Price?
A Major Expansion
Microsoft, a major player in the tech industry, has been rapidly expanding its data center footprint across the United States. As of 2024, the company had secured permits for 44 data centers, making it one of the top five companies in terms of data center construction.
These facilities are not small—half of them are among the largest, consuming a whopping 40 megawatts of electricity each.
Strategic Locations
The locations of these data centers are strategic:
- Virginia hosts the most, with 24 facilities
- Texas follows with eight
- Illinois and Iowa each have four
The data center in Maricopa County, Arizona, stands out as the most power-hungry of the bunch.
Growing Concerns
The rapid growth of data centers has raised eyebrows and concerns:
- The number of data centers in the U.S. has quadrupled since 2010, with 1,240 facilities permitted as of 2024.
- This surge has led to worries about rising electricity costs for consumers and community opposition to new constructions.
Electricity Demand
Microsoft's data centers are not always running at full capacity, meaning their electricity demand can vary. If all 44 permitted facilities go online, they could consume between 16 and 25 terawatt-hours of electricity annually.
To put that into perspective, that's roughly the same amount of electricity used by 1.8 million U.S. homes in a year.
Broader Impact on the Grid
The broader impact of data centers on the grid is significant:
- If all permitted facilities come online, their electricity demand could reach between 149.6 and 239.3 terawatt-hours annually.
- This is a lot of power—equivalent to the entire state of Florida's electricity consumption in 2023.
Community Concerns
Communities near these data centers are voicing their concerns:
- The high electricity demand often requires utilities to build new grid infrastructure, and the costs are often passed on to all ratepayers, including residential customers.
- A 2025 Harvard Law study found that utilities can fund discounts to Big Tech by socializing their costs through public electricity prices.
Microsoft's Response
In response to these concerns, Microsoft has pledged to cover the electricity costs of its data centers.
- Brad Smith, Microsoft's president, announced that the company would ask utilities and regulators to set rates high enough to cover the costs incurred to provide electricity to its data centers.
- Microsoft also plans to pay for any necessary grid infrastructure improvements.
Broader Context
This promise comes at a time when President Trump is pushing for broader affordability measures, including plans to lower mortgage rates and cap credit card interest rates.
The tech industry's impact on electricity costs is just one piece of the puzzle in the broader conversation about affordability and infrastructure.
