Mullin questions data center impact on residential power bills 

The intent behind the query isn’t to stymie the AI boom, much of which is centered in San Francisco and nearby California counties, but to work in partnership with major players to protect residents who are already struggling with the cost of living and skyrocketing utility bills, Mullin said. 

“Data centers are crucial to powering that AI boom, and they’re central to the innovation economy,” he said. “I really want to make sure that this is not coming at the expense of consumers, and I really want to focus on how we can protect and insulate everyday residential consumers from paying more for their utilities.” 

By 2028, data centers are projected to account for 12% of electricity use across the country, per the letter. It’s integral to understand the potential relationship between that increase and a rise in utility bills to protect customers, Mullin said. 

“This is trying to get some answers, not in an accusatory tone, but really a way to engage with these players so we can develop some sustainable policies around making sure that the costs are not passed on to consumers,” he said. “That’s going to require a lot of coordinated and collaborative activity between the industry players and the federal regulators.” 

At the state level, local legislators are attempting to tackle California’s rising utility rates — including a 90% increase for Southern California Edison customers in the past 10 years and a 110% increase for Pacific Gas and Electric customers — with legislation like Senate Bill 254, authored by state Sen. Josh Becker, D-Menlo Park, to bolster utility infrastructure without ratepayers taking on the cost burden. 

There’s also been an effort from Assemblymember Diane Papan, D-San Mateo, to increase transparency on data center resource use by requiring data center owners disclose expected water use when applying for business licenses. That legislation, Assembly Bill 93, was recently vetoed by Gov. Gavin Newsom. 

“While I appreciate the author’s intent, I am reluctant to impose rigid reporting requirements about operational details on this sector without understanding the full impact on businesses and consumers of the technology,” Newsom’s veto message read. 

Papan said she disagreed with the veto and noted the bill was designed to increase disclosures for future planning, not stop technological growth. 

While he was unfamiliar with the specifics of AB 93, Mullin said the debate elucidated the fine line legislators had to walk on issues like data centers and AI growth. 

“This entire thing is a balancing act, where you want to encourage innovation, you want to encourage growth and job creation that comes with data center development, but you have to account for environmental and other economic impacts,” he said. 

Right now, legislators like Mullin are simply asking the question of how to incorporate demand flexibility, create transparency on how rate increases are calculated and stabilize the utility grid structure for future impact. 

But he acknowledged that in the future, the federal and state government will need to be prepared to appropriately regulate new technologies and their resource use to protect consumers — ideally, while still creating an environment for growth. 

“Government absolutely has a role [at] both state and federal level, to protect consumers, protect our democracy, protect our workforce from the potential dislocations that are coming with AI,” Mullin said. “At the same time, when policy is done right, you can encourage the appropriate development of this technology.”