Your electric bill is going up, and AI might be to blame.

Mike Jacobs, senior energy manager at the Union of Concerned Scientists, has spent his career deep inside the unglamorous world of grid planning meetings, utility documents, and transmission cost accounting. What he found is alarming. 

In a recent report, Jacobs traced $4.3 billion in grid connection costs across just seven states directly back to data center expansion—costs that are being quietly passed on to everyday ratepayers. Worse, he told EnergySage that these increases are going to start to impact customers nationwide, and the $4.3 billion is “a slow drip compared to that $20 billion that arrives quite immediately.” 

We sat down with Jacobs to talk about how this is happening, why regulators are letting it slide, and what homeowners can do to protect themselves.

Transcript

Kristina: Mike Jacobs, thanks so much for coming in today. Can you just give our audience a little bit of background about where you work and what you do?

Mike: Thank you for having me. I'm Mike Jacobs. I'm the senior energy manager at the Union of Concerned Scientists.

Kristina: And for people who don't know, what is the Union of Concerned Scientists?

Mike: We're a nonprofit. We support sustainability and the use of science in government decision-making. We're actually an MIT spin-off and started during the Vietnam War, when researchers felt all the funding was meant for military purposes.

Kristina: Very interesting. So you were recently featured on an NPR podcast, and they called you a grid geek. Is that a term that you came up with? Is it something you enjoy?

Mike: I think that's a new term. I hadn't heard that one because people didn't even talk about the grid, so you couldn't have a grid geek.

Kristina: What makes you a grid geek?

Mike: I think the grid is really pretty cool. I've spent most of my career poking at it and trying to get the engineers who control it to use it better. I go looking for it.

Kristina: You're probably the only grid geek I've ever met, so I think it's pretty cool.

Mike: It's a small club.

Kristina: Let's get a little bit into business here now. You put out a report last September called "Data Centers Are Already Increasing Your Energy Bills—We Have the Receipts." When did you first start realizing that something is up with AI data centers?

Mike: It really did sort of sneak up on the electric power industry. I spend most of my time watching the PJM region—that's a grid operator that covers Pennsylvania, New Jersey, Maryland, and the Mid-Atlantic, including Virginia, which is "Data Center Alley." We were hearing Virginia was having increased energy needs, and then gradually over the last two years, the transmission discussions were about meeting those needs. And then it just blew up like a bomb.

This shows up in what they call local transmission planning, which is grid extensions for local needs. Virginia's utility, Dominion, was saying, "We have a new data center, and we're going to build this for them." They said that 12 times over the course of one meeting. So I went back to the next meeting. These are meetings where very few people show up, they're very quick, and there's very little discussion.

Kristina: Are they public meetings? Can anyone go?

Mike: Anyone can go. There are about three members of the public who have started going because they're NIMBYs (“not in my backyard”). But otherwise, this is entirely an engineering conversation, and the engineers don't really understand what the fuss is about. It's probably my job to translate.

The way the meetings go is that at the first presentation, there's a need, and you come back some time later with a solution to the need. It's only at step two that you see the price tag. What I did in this project was link the price tag to the identification of the need, being a data center wanting to connect. So it really made it quite clear: This data center is causing this cost.

Kristina: In that report, you specifically dug into the utility documents. I'm assuming that took quite some time to go through all of that. Walk us through exactly what started standing out to you when reading these documents.

Mike: The individual discussion of individual data centers is two slides. You have to know to recognize that they're talking about a data center. Some were labeled "it's a data center customer, and they want the power yesterday." That's unusual. What's really unusual about all this is that we don't have transmission planning for individual customers. That was the first thing.

My career has been about attaching renewable energy to the grid, to the transmission system specifically. And the rules for that are like 180 degrees different from what the data centers are being given.

Kristina: We'll get into that a little bit later. But first, we want to talk about the price tag and what the implications really are for the consumer. Your report found $4.3 billion in connection costs that are being passed to consumers in just seven states. We're seeing some projections of utility bills up to $70 a month for some people, which is outrageous. Are these increases concentrated to this area, these seven states, or do you see it expanding?

Mike: PJM is a regional grid operator, and part of their function is to make information more available and transparent, so it's actually easier to find in PJM than in most places. I got these seven states and this $4.3 billion number because that was easy to find in comparison.

But we've had folks at UCS involved in Louisiana, where it was all in a rate case, and we've participated in Illinois and Pennsylvania, which are part of PJM, where there's additional money in a separate conversation buried outside of the PJM databases.

Kristina: So you're saying this is likely happening on more of a nationwide level, but it's just not as transparent?

Mike: Yeah, it's definitely what I'm saying. I counted about 14 states where it's pretty clear there's been a big case for a big data center and big costs being passed to consumers. Honestly, when people are telling me "this is early days" with generative AI, most of these data centers that are showing up were planned before that. So the wave is still coming.

Kristina: Have you seen any examples of any states or markets that are doing this right or more ethically?

Mike: It's a little murky. The angle I focused on in this report was about the last mile of wires getting to these data centers. That's probably the third of three major cost areas. This is affecting people's bills in easily 12 or 14 states so far across several layers. This $4.3 billion is the smaller number of those three.

Kristina: Oof.

Mike: The number for new generating plants—new supply, which solar and batteries at home would obviate—that number is now about $20 billion for the PJM region. There's also how quickly the costs are collected. My $4.3 billion is the slow drip compared to that $20 billion that arrives quite immediately.

Kristina: That's quite concerning. You mentioned earlier how it's quite unusual to have an individual client coming forth and a utility being like, "We need to accommodate these needs." How exactly are tech companies getting these billion-dollar grid connections while we pay for it?

Mike: There are a couple layers of rules. If anybody's ever asked the utility about a cabin in the woods—I want the utility to bring me a wire—they would say "after we come to the street where your driveway is, after that, it's your cost. We have a line extension policy, and you pay for the line extension." That's the way it works for what we call the distribution system, where 99.5% of all customers interact with the grid.

Data centers need so much power that the utility brings their transmission team. The rules for transmission extension are different—and of course, they're different for customers than they are for renewable projects or any kind of generator. So we've got three different sets of rules going here.

The short answer is if the utility can make the argument that this is a transmission extension, it goes into the rates for everybody to pay. And they just haven't really asked the data center companies anything else.

Kristina: Since your report went public, have any of these utilities or regulators contacted you? Any sort of backlash there?

Mike: The only conversations I've had where somebody objected was a friend of mine who works as a consultant. He said, "Oh my gosh, these are very big numbers. Why don't you find something else to do?" Because that's the way the utility work rolls.

But having gone into a couple of rate cases and literally sat in with a bunch of the utility folks, they all fully concede that I've described it correctly. They just say there's nothing wrong with that.

Kristina: So they just justify it as "this is fine"?

Mike: "Those are the rules." The strangest thing in all of this was action by the United States Department of Energy asking for rule changes to be made at the federal level. They called out amongst their 14 requests—number eight was, "Don't do the thing I described happening." They said that should not be the way it works.

As an advocate, that's like money in the bank. We asked for something and the government said, "Yeah, let's do what he said." That's pretty unusual.

Kristina: We have seen some utilities claim that data centers will actually lower our bills in the long run by spreading out fixed costs across more customers. Do you find any validity in that argument?

Mike: There was a time and a place where that was true. Propaganda uses a little bit of truth as a nugget. When we have broad load growth and consumers of various kinds are added to the system, you do get a spreading out of costs over more use.

But rate-making is the whole game here. What's true about the utility statement right now is the call center costs, maybe some of the automotive fleets that the utility owns, the CEO and executive salaries—those costs are spread over all customers and are contributed to by the data centers.

But because they're not attached to the distribution system, and they may also be making separate deals for the power supply, the revenue from the data center sales doesn't contribute to lowering people's bills. The costs do contribute to raising their bills.

Kristina: When we're talking about these costs and when a data center gets connected in general, what kind of grid infrastructure are we talking about?

Mike: In addition to the last mile of wires, there's eventually—and quite clearly in places like Virginia—a larger amount of transmission into the region needed. And then there's also the power supply, new power plants. Those have different places where the accounting and the costs are dealt with and are a lot harder to sort out and assign to a specific customer, but they're clearly raising costs for everybody. We just don't have declining costs because of greater assets. Those things are adding to the cost for consumers.

The most obvious part that I wrote about is literally a couple of miles or maybe half a mile of high voltage transmission. Then the utilities have taken up the practice of building a substation on the property of the data center. They run a transmission line into the substation, another line out of that substation back to the existing backbone transmission in the area. Then there's 60 feet of more wire to go to the customer themselves.

The utility is owning that substation on the property of the data center. They may even be giving it a clever name, like the name of a cloud—Cumulus or Nimbus or Quantum 400—because they want to be clever in their moment of creativity. Because they've looped that and they've put a line in and a line out, they can claim it's part of the network, and it helps everybody. All the rhetoric and policies of the past hundred years get dropped on top of this customer connection, and it gets spread to everybody.

Kristina: You said in your report that regulatory cost reviews are practically nonexistent when it comes to building these data centers. Why is that?

Mike: Some data centers have power demands that are comparable to small states. The data center in Louisiana is broadly described as using three times the electricity needs of New Orleans. These are generally measured in megawatts. The routine now is 300 megawatt data centers, but the ambitious folks are talking 1,000 megawatts. 1,000 megawatts is roughly what some small states have for utility-owned generation in the state—Vermont-sized states.

Kristina: Do you think if data centers were to connect directly to the power plant, that would solve the cost problem?

Mike: If the data center and their power plant developer want to provide both supply and demand, and they're talking about this actively, and not connect to the grid, there would actually be no impact on consumers.

Kristina: Why isn't that the go-to?

Mike: There are a couple of reasons. First of all, the utility hates this because it means they've lost the customer. This is a once-in-a-lifetime expansion of the utility system. There's nobody in their legal department that says, "Yeah, that's a good idea." The finance people can't get over themselves about what good days they're having.

It also requires both the data center to think a lot harder and the power plant developer to take on a whole mess of risks, because the grid is this social infrastructure that does all kinds of stuff for everybody who uses it. Consumer solar on the roof blows power out when they're not home, and the sun's out, and takes power in. Data centers do that as well.

In fact, data centers—their demand fluctuates so quickly as they go through tasks and reset, and start new tasks that average power plants attached to them cannot follow that variability in the demand. So they really need the grid or some more expensive gear to just handle the behaviors of the data center.

Kristina: Would it make more sense for data centers to just have their own renewable energy options, like having solar panels and batteries to keep them running, or wind energy?

Mike: From a societal point of view, the best thing here would be energy parks that have both supply and demand with lots of wind farms inside that park, or directly attached lots of solar and batteries to handle both the variations of the generation and that spiking and dropping behavior of the data centers. You can put it all inside a fence—legally or economically or physically. They would have their business, and the rest of us could go back to what we were doing two years ago before this overwhelmed the utility system.

Kristina: And that wouldn't lead to us paying outrageous energy bills?

Mike: It would completely isolate the data centers from consumer energy bills. The idea is simply that the data centers are distorting the electricity market and shouldn't be part of the same flow of money that consumers pay into.

It's actually the position of the independent market monitor that helps govern the PJM region—they don't help govern, they're a body that's supposed to keep the market on track, but they get ignored. Joe Bowring is the guy who leads the independent market monitor. He's being ignored. His point is simply: This is clearly for individual customers who have other options, affecting all the rest of us who don't have options.

Kristina: A lot of data center companies argue that they're going to bring in jobs and tax revenue, and it's going to be economically beneficial for the people who live there. From your research, do you think that the economic benefits will ever actually materialize for locals in the community?

Mike: All those promises are behind nondisclosure agreements. It's absolutely empty rhetoric. When you actually visit a data center that's been built, you find there are like two or three people—lock the doors and sweep the floors. Once they're built, the job creation there is zero.

The tax revenue is a separate agreement they call "payment in lieu of taxes." It's negotiated behind closed doors with a municipality that's completely outgunned in this conversation with these data center developers.

Kristina: You started this work because you care about clean energy, getting solar and wind connected to the grid. How does it feel knowing that these data centers are just kind of cutting through the line, getting immediate attention from the utilities, while these renewable energy projects are being shot down?

Mike: This has been the saddest story I've ever seen in my career. PJM has also been notorious for gumming up and then putting a moratorium on grid connections for renewables. So we got demand growing and limits on supply. It's a squeeze. In the finance world, it seemed to be, unfortunately, part of the goals for some of the folks involved.

If this were just about money, that would be one thing. The truth is, we're talking about first blocking clean energy. But now we actually have an all-out shortage of power. PJM can no longer meet its reserve margins in the coming years and is throwing out all the rules to figure out how to simply get the supply needs.

We're going to be back to folks who either have solar and batteries with the inverter so they don't need the grid for an outage, or folks with a big woodstove and a supply of firewood.

Kristina: The preppers are doing okay.

Mike: Yeah.

Kristina: It doesn't seem to make sense. The government, especially, shooting down these renewable energy projects, but we need more data centers—they need more energy. Are you worried about the sort of strain this is going to put on our power grid and the reliability of energy in the United States?

Mike: If you're a grid geek, you get a whole greater insight about power outages. We have a history, a really pretty good history of keeping the lights on. But the formula we have now—it's the old formula. In particular, PJM and our whole turn to markets, and the reason why this stuff is so lightly regulated is our variety of reliance on market mechanisms to do a better job.

This is a disruption of the expected market behaviors of the parties. This is a long way of saying what we get doesn't work for the problem we have. The problem we have keeps people warm in their homes and food in their fridge, and medicine and medical treatments. Places that don't have reliable power don't have healthy economies.

This is kind of a career-changing moment for everybody in the electric power world. The stuff the utilities are saying ranges from willful ignorance to willful misdirection of what's going on.

Kristina: This is just beyond people's bills rising. It's a lot deeper than that.

Mike: This is beyond people's bills rising. The scenario we talked about of, "Build your own supply to meet your own demand, put a fence around that"—that's really anti-social. The solar community sort of started with a lot of "I can do this myself," but that takes a lot of determination. We don't really want to fragment into social infrastructure and make it so only the strong survive. That's just not what I do at work.

Kristina: Not to mention the climate issue of it all. I know one study found that emission levels could jump by 30% by 2030 because of data centers. Even if we were to fix the cost problem, do you think that would help or hurt the climate problem? How do we ethically bring data centers on without damaging our climate?

Mike: The law in a number of states and in most of the world is increases in infrastructure have to lower carbon emissions, not raise them. We've got a challenge in the U.S.—partly because of our government structure of states and the federal government—about even enforcing climate targets.

Certainly the growth in demand—if people are believing what they're being told by the developers and the AI companies—I don't see any confident way of building enough supply. Absolutely everything is so desperately needed.

What we've seen at some of these early gargantuan data centers is they bring in diesel generators on flatbed trucks by the dozen. While the grid and the utility are getting caught up to what they need, they're just running backup generators for 600, 800 megawatts. Nobody in their right mind does that—nobody in their right mind except in an emergency or, you know, a forward operating military base. These are customers in our neighborhoods who are acting like it's a war zone or a disaster zone. That's not sustainable.

Kristina: Do you think that people who live near these data centers should be concerned?

Mike: The local impacts vary. Some of this is aesthetic. When you get backup generators running all the time, you have immediate air pollution problems. Water issues are very localized—water is a hyper-local kind of thing. So that varies, but it's real where it happens.

Two-thirds of what I just said is probably within the state and local permitting regime. The mismatch between the negotiations of the municipalities involved with these data center companies and the amount of secrecy involved in all this puts the local communities in a terrible situation. This is not the way anybody wants to do business.

In the long run, maybe this is a crisis that shakes people up, and we realize we can do more renewable energy. Some of the stuff that seemed expensive is now getting investment. I'm looking at geothermal with that conversation. I'm not talking about putting them in space, which is apparently alive enough that The New York Times had an article about putting solar panels in space. "Put the data centers in space, we're good."

Kristina: You don't think so?

Mike: I can't imagine. I thought lifting stuff into space was expensive. That's what I thought. My dad was a physicist.

Kristina: It's funny how, for the right things, money seems to just appear.

Mike: Kristina, that's exactly what this business has been for the utilities. I literally was just explaining to one of my managers that everything the utility said for the last ten years about working on the grid for renewables, they just dropped that book altogether when it was new customers.

Kristina: Do you think that more homeowners living in and around these data centers should look into solar and storage solutions? Would that help with the grid issues there?

Mike: I would limit that to people who think there might be a data center coming. We don't know where the data centers are coming. Listening to them, their explanations are everywhere.

We've had such spectacular improvements in the cost of solar and now batteries that the idea that we can have a lot more local production of electricity that really is around the clock—winter's still tough, but solar plus batteries, I think, are a good idea everywhere all the time.

Kristina: We agree.

Mike: I set you up.

Kristina: You kind of mentioned this a little earlier, but the federal government did propose this new law that would require the tech companies to pay for the data centers. On its face, how do you feel about that proposal? Are you supportive, or do you think there are other issues that it could bring?

Mike: The most dramatic and visible came from the Department of Energy in late October. But for months, various congressional offices, senators, and their staff had been working on similar rules to propose as actual legislation, as laws. The Department of Energy has proposed this as rules for the regulatory agency to adopt. In all these situations, it's part of a package. The making of these packages, sometimes known as sausage-making, reveals a little bit more about who's involved.

The Department of Energy had this package they put forward with 14 changes. The eighth one was this thing about, "If you need the grid expanded, you need to pay for it." A lot of the other stuff was about jumping ahead of existing power plant proposals, studying the demand with the supply as a single thing, and then asking questions like "would that work? How would that work?" This one proposed set of rules from the federal government has inside of it really about six or eight rulemakings.

In this Department of Energy proposal, there really were about 14 things. Sorting out which ones are clear and understandable was the first step. Which ones kind of make sense and are fair to the other generators who have been literally in the interconnection queue for years? And then which ones are really viable in terms of physics and engineering and won't just be a shortcut?

What we have seen is tthat he data center people came from the world of "move fast and break things." The utility world doesn't have anybody who talks like that. There's such a collision between what folks are asking about and what they don't know, and how things have always been done, and "the way my boss always did it."

There's room for improvement. But this rulemaking has come down—some folks have been calling it a "rocket docket." The Department of Energy said, "We want answers by the spring." The agency, nominally an independent agency, took about three days to start the comment period and then provided a limited comment period. Although the question they were asking was, "Should we proceed with a rulemaking?" This isn't yet a set of rules to comment on. Some of the stuff was kind of thinly sketched.

Your question actually was, “How do I feel about this?” We support it. Some of it's good and lots of it will teach a lot of folks. But we're talking about rules that basically would make nuclear plants and data centers into microgrids or interruptible data centers when the data center hasn't really agreed to be interrupted. There's a whole lot of, "How are you going to do this?" still to be worked out.

Kristina: It also would prioritize that data centers have their own dispatchable power. I think they recommended fossil fuels or nuclear power. Do you feel like that also feels like another dig at clean energy?

Mike: These days, it's whack-a-mole with clean energy. I've worked on some of the offshore wind project development and support. I used to think it was bad when the two oilmen were in the White House. Little did we know. There are pendulum swings. Hopefully, the pendulum isn't broken.

Kristina: Also, under this rule, it seems like the utilities may also lose out on a lot of money. If the utilities aren't really profiting, who would win in this situation?

Mike: The military inside the U.S. has wanted to have energy capabilities in case of an attack. They've made efforts for quite a while to build cogeneration or just build generation on military bases with a disconnect switch so they could run island-mode during an attack on the U.S. Utilities won't let them—plain, full-out power struggle. The U.S. military has lost that fight because the utilities have their own games and their own tools.

This data center discussion is a little bit of a reprise of that discussion. How this is actually going to work out has to get over the utilities' objections. It's kind of unclear if any of this is going to get resolved. Of course, the patience level of some of the folks involved is minimal. So we'll see this thing change before we see it cleared up.

Kristina: If you were in charge and you could write the rules for how this is all going to play out tomorrow, what would your proposal be?

Mike: I think I'd tell them, "Find your own supply." You guys want it so bad? Don't connect to the grid and have a great time. Put them where you can afford it. And if space looks good, how about it?

Kristina: Any concerns about just sending them off into space?

Mike: Only when they get to nuclear plants in space. Then you've got a launch failure kind of problem. It hadn't quite occurred to me—what if space got crowded? No, my concern is the demands, the grid demands, the water supply, the fuel supply. You've got to do this with renewable energy. If we can't build it fast enough, that's a physical thing you've got to live with instead of stamping your feet and saying, "I'm going to bring in rented diesel generators until your eyes water."

Kristina: It's giving Veruca Salt. "I want it, and I want it now."

Mike: Yeah.

Kristina: Just on its face, how do you feel about AI data centers?

Mike: Let's start with data centers. It's true that twice today, before I got to this interview, I had trouble logging in to stuff because somewhere there was a data problem. I don't really hold that against data centers.

AI is a whole other story. I don't think we know how to live with AI. The folks promoting this are again from the "move fast and break things" world. They're talking about breaking an awful lot of stuff. While I'm supportive of data and data centers, the AI folks need to slow down and explain themselves, and stop testing stuff on people.

Kristina: So, you do have concerns with artificial intelligence?

Mike: It's just a rhetorical claim at this point. The further you look into it, the less there is there.

Kristina: For homeowners who are listening right now, what is the single most important thing that they can do or a policy change that they can try to advocate for to help save them on their electricity bills, and any other issues that might come with the building of these?

Mike: The socially cohesive thing to do would be to work through the political process to make sure the Public Utility Commission is assigning costs to those who cause it. Right now, we have a lot of people denying that this is within their authority, and that's a lot of hiding their heads in the sand and hoping somebody else takes responsibility.

We really shouldn't be accepting the rhetoric that everybody benefits from these costs. The slightly less social move, but perhaps the long-run survival move, is to get yourself enough solar panels and batteries so you feel good about your own electricity supply, because right now it's being corrupted by these data center requirements. Then meet your neighbors out on the sidewalk or down the road, tell them what you're doing and why it has long-term benefits.

Kristina: For you, just overall, you seem pretty—I don't want to put feelings in your mouth or anything—but you seem pretty angry at the whole ordeal. Is that accurate to say?

Mike: Yeah, it's really pissing me off. Partly because we spent so much time trying to make the grid reliable. Part of my job over these years has been to get renewables to fit in as a reliable source. The data center folks are not adhering, and the policies we have, and the practices we have are being trampled with—everybody is somehow thinking the problems aren't really going to arrive.

The grid fails instantly. It's always something people hadn't thought of. By definition, after every major failure, there's a study, and they correct that cause, and then there's another failure. The failure we're headed for is the simplest there is: More demand than supply could meet. We could see that coming now. Somebody is going to tell demand, "You're not going to get connected. And if you want to be connected, bring some supply."

The fact that the same jokers who said, "Oh, we need to wait for the renewables, they're intermittent, and it's going to cost you for the upgrades," have just dropped that line and said something different to the richest company in the world—that's pretty nasty.

Kristina: Sounds pretty nasty. Mike, is there anything we might have missed or anything else you wanted to say or talk about when it comes to this?

Mike: The utilities have had a long history of running the show. What we've got now are literally customers arriving who are larger than the utility company. I've heard utilities say on a podium in front of industry meetings, "We can't buy the equipment we need because the data center people went to our suppliers and bought out the next couple of years of manufacturing."

We really have thrown our socially important connected network into something that's really not yet under control. You can't expect everybody to have their own electricity supply. It's every man for himself. If that is your overriding philosophy, people should know that. Take a look at what you're being told and ask for some more explanation.

Kristina: Do you feel in general that people have enough concern about AI and AI data centers?

Mike: Concerned about AI, I'm not sure quite where I stand on that. I'm not really an expert in that. But the data centers and their impact on customer costs—it's definitely got people's attention. It's so much clearer to folks because it's such an immediate thing. You pay a bill. Nobody's actually paying for their AI use, and Google makes it awfully hard to turn it off, so you don't use it.

This past election cycle, affordability was a really big topic. In some of the states in PJM, they were explicitly talking about electric bill costs. I can tell you the number of legislative offices that have contacted me directly to talk about this further, so they can put in something to protect their constituents, is remarkable.

Data center costs are in the attention budget. I still don't know how to explain what AI is going to do to us. I just don't.

Kristina: We don't know. I think we just kind of have to sit, wait, and see.

Mike: There's just so much hype. If you look at what they're saying they can do and then see what they test and measure—they perform really well if they already know the answers.

Kristina: I know, even in my personal use of trying to ask it a question, I've seen them make mistakes countless times. But you only know it's making a mistake if you know what you're talking about and asking in the first place.

Mike: Right. And then the promoters are like, "Oh, we'll have general intelligence, we'll do better than people can on surgery." What do you mean? Have you ever seen an X-ray? I was just talking about X-rays on people's shoulders. Because my wife and I have each at times had X-rays on our shoulders. To make your fingers move, you need all this stuff all the way up and down your arm. The AI folks might be working with some robot folks, but they're not doing surgery. Reading X-rays, I'll grant them that. You can do that because you know the pool of right answers. But the AI folks are kind of overselling their position.

Kristina: I've also heard some claims of the AI folks saying that AI can help to solve our climate crisis issues. Do you see any validity in that?

Mike: Only under apocalyptic scenarios. They're so over-promising that they're just making promises they have no reason to be able to support.

Kristina: Do you see things like home rooftop solar or batteries as a way for people to protect themselves from possible grid failures?

Mike: It's already clear in the PJM region that demand from data centers is causing costs and threatening reliability. The results of the last procurement showed PJM won't have the reserve margin that they've had forever, that they need to keep the lights on. That kind of threat to reliability isn't the same as a winter storm or a tree falling on a line because a truck hit the pole.

The data center is claimed to be able to use the electricity. Consumers claim to be able to use the electricity. We don't have enough supply. The prospect from data centers' own predictions is that they're going to outstrip the supply, and we're going to have rolling blackouts. I was reluctant to talk about that until recently, but now Goldman Sachs is saying the same thing.

That's a full-on threat to society. Forget your pocketbook, which is already seeing the cost. That just disrupts the economy and people's health and welfare. If that's enough motivation for people to get their own backup generators—hopefully batteries and solar—that's great. But you've now rationed or allocated health and welfare without thinking of society's needs.

We really kind of try to provide health and welfare—clean water, clean air—without discriminating based on ability to pay. The one caveat in all the scenarios is if we are reduced to everybody having their own generator, and if you want to live a modern life, you have to be able to supply your own electricity; that's not really the basis for a healthy economy or society. That's what I worry about.

That's partly what makes me so crazy angry about this—they're going to break something that, when you have a long blackout, people die. It's just not a good idea to go down that road.

Kristina: As we said earlier, it's so much deeper than just your utility bills rising. That's what gets people angry, but it's very layered.

Mike: Yeah.

Kristina: Mike, thank you so much for coming in today. If people want to keep up with your work, follow you, is there a best way for them to do so?

Mike: The Union of Concerned Scientists is all about providing information to policymakers and the informed public. I write a blog about reliability and renewable energy. Lately, it's been data centers all the time. UCS.org is our website. I'm Mike Jacobs, and I have a blog, and you can see my past blogs there as well.

Kristina: Perfect. Thank you so much, Mike.