You might have no clue what a data center does. But a boom in these high-tech operations in the Chicago area and around the country will hit home next year in the form of higher electricity bills.
The average increase is expected to be $10.50 a month for each ComEd residential customer by the middle of next year.
That’s on top of the typical electricity bill in the Chicago area, which is about $100 a month.
The price of electricity is going up due to energy-hungry big data centers that are expected to dramatically increase demand for power as the United States races to be a world leader in artificial intelligence.
ComEd and other utilities pay up front to make sure the electric grid that extends from Chicago to the East Coast has plenty of power over the coming years and won’t see blackouts because of these new electricity hogs.
A typical consumer probably doesn’t have a sense of how these high-tech operations affect electricity demand. It’s unlikely that most people will have heard of PJM Interconnection, a government-regulated nonprofit that operates the grid and oversaw the process that led to the coming rise in electric bills.
But customers notice when their bills start to rise. And so do politicians.
Gov. JB Pritzker blames PJM for the rising cost of electricity. The grid operator said: Don’t blame us. We exist to make sure the lights stay on even as power usage soars.
A large data center uses enough electricity to power entire neighborhoods or even small cities. This is happening as Illinois and other states seek to phase out fossil fuel energy sources to fight climate change.
Linda Young, 68, sees nothing positive about a proposed “quantum computing” project at a long-abandoned steel mill site along Lake Michigan just over 2 miles from her South Shore home. She worries about the effects on the lake and other environmental ramifications from the almost 130-acre development, but is also concerned about the potential for higher property taxes.
The South Side project, being put together by developer PsiQuantum, is separate from AI research and is not a data center. But its electricity use is likely to be similar to that of a data center, a company spokesman said.
Told that data centers and other projects by tech companies are helping to increase ComEd bills because of high electricity demand, Young, a retiree and grandmother of four, said: “Just living is enough of a struggle. Is quantum computing really about making our lives better?”
Linda Young lives in South Shore, just over 2 miles from a proposed quantum computing operation on Lake Michigan. “Is quantum computing really about making our lives better?” she asked.
A data center is basically a building or complex that houses the equipment used for applications such as cloud computing and AI, among other things. Leading data center companies include subsidiaries of Amazon, Meta and Microsoft.
The consulting firm McKinsey and Co. said data centers are responsible for up to 4% of the country’s electricity demand today, and this will grow to 11% or 12% by 2030.
Chicago is the third-largest data center market in the country, just behind Dallas-Fort Worth and way behind the leader, northern Virginia, according to the real estate firm CBRE.
Pritzker said data centers are a huge piece of Illinois’ economic future. There’s a competition among states to lure and build massive data centers as the United States races to beat China to be the world’s AI leader.
There’s also a huge potential cost as these operations suck huge amounts of power.
And ComEd customers might feel the pinch.
Even with the boom in data centers in Illinois, ComEd said it still has plenty of power. There are more than 80 data centers sucking up power now, and more than 30 planned, in addition to the quantum project. That still leaves the Chicago area with more than enough power, ComEd said.
There’s “a critical need for infrastructure investments to ensure the strength and reliability of the energy grid now and in the foreseeable future,” ComEd spokeswoman Lauren Huffman said.
The expected $10.50 rise in ComEd customers’ monthly bills is tied to an auction process that PJM holds each year to make sure that its multistate territory has enough power to meet demand. The most recent auction resulted in higher electricity prices in part because of an increase in projected electricity demand, which contributed to high auction prices.
That comes as a shock to Liyola Taylor, 51, who lives in Austin. She said she battled ComEd last year to keep the lights on at her West Side apartment where she and her teenage son live. The disconnection notices have stopped for now, but having to come up with the money she owes will be “painful.”
“It’s more of a headache,” Taylor said. “I don’t really have income right now.”
Pritzker lashed out last month in a letter to PJM, whose electric grid keeps the lights on in all or part of 13 states and Washington, D.C. Northern Illinois is on the western edge of this grid. Southern Illinois is served by another power grid.
“These record-high prices are a serious concern,” Pritzker wrote in the letter that also was signed by the governors of Delaware, Maryland, New Jersey and Pennsylvania.
They complained that the costs “will be paid by our residents and our businesses and could deter future economic development.”
This demand for more power comes as Illinois and other states carry out plans to retire fossil fuels for electric power generation in favor of renewable energy, such as solar and wind. Hundreds of renewable projects are waiting to be connected to the electric grid in ComEd’s territory.
Pritzker’s office and clean energy organizations have been frustrated, saying PJM-related costs are soaring because of rising demand for electricity even as the grid operator has been slow to approve connections for new power plants to come online.
A report from Lawrence Berkeley National Laboratory found that 295 projects were in the PJM queue for grid connections in ComEd territory as of the end of last year. Solar farms were No. 1 among those waiting to connect.
PJM, based in Pennsylvania, said it has increased its pace for approving grid connections and that part of the problem is that older power plants are closing prematurely.
“PJM has been warning for some time that policy pressure on generators to retire before their replacement is in place could result in a supply crunch,” PJM spokesman Jeff Shields said.
Shields said thousands of renewable projects across the grid need to be studied and approved before they can connect and that PJM is doing what it can to get through the applications.
He also pointed to some renewable projects that don’t end up being completed.
“These projects are not coming online at the pace we need to replace retiring generators,” he said. “This is not due to PJM’s interconnection process, but due to difficulties with siting, supply chain and financing.”
The policy pressure to shift energy sources is coming from several states in PJM’s territory, including Illinois, which passed the Climate and Equitable Jobs Act in 2021. The landmark law was part of an effort to shift from coal and natural gas power plants and boost carbon-free resources such as nuclear and renewables.
But it would be wrong to blame the law for the plant closings that are contributing to high prices in Illinois, said Will Kenworthy, Midwest regulatory director for the advocacy group Vote Solar. Kenworthy said closings related to the law won’t happen until at least 2030.
Kenworthy and other renewable energy advocates said wind and solar power are being blamed for rate increases, when the main culprit is the increase in demand for electricity.
“We’re heading toward a period of higher prices,” he said.
Sarah Moskowitz, executive director of the Citizens Utility Board, a Chicago consumer advocacy group, said many share in the blame for rising utility bills, including politicians, regulators, PJM, ComEd and the companies developing data centers and other electricity-hungry projects.
“There isn’t one single entity that we can blame for high electric bills because our power bills are the result of a plethora of public policy and regulatory decisions,” Moskowitz said.
A proposed quantum computing center on the South Side would occupy part of a massive steel mill site once operated by U.S. Steel. The company permanently shut down the mill in 1992.
Burning coal to create electricity will be largely banned in Illinois in 2030. But plants in Waukegan, Romeoville, elsewhere burned more in 2021 than a year before. One day, their emissions will end — but not yet.
The suit says BP, Chevron, ConocoPhillips, Exxon Mobil and Shell have hurt the city by discrediting science even as their products lead to “catastrophic consequences,” including strong storms, flooding, severe heat and shoreline erosion.
The Climate and Equitable Jobs Act, signed by the governor, set a timeline for phasing out fossil-fuel energy sources by 2050.
