States challenge AI-driven electricity rate increases sought by utilities

Governors, attorneys general and regulators in several states are challenging electricity rate increases sought by utilities as the rapid growth of artificial intelligence data centers strains power demand and pushes up customer bills. Officials in at least six states, including Arizona, Indiana, Maryland, New Jersey, New York and Pennsylvania, are taking steps that range from scrutinizing proposed returns on investment to pressing utilities to change how they finance major grid upgrades, according to the reports.

The disputes are unfolding alongside concerns about affordability during a midterm election year, when household costs have become a central political issue. In Arizona, Attorney General Kris Mayes is contesting two rate increase requests before the state’s utility regulatory board. In an interview, Mayes said it was “never been more important” to resist what she described as “monopoly utilities,” and she later added, “Its becoming unbearable for the people in Arizona, and I think we have to fight back.”

Utility spending and allowed profit margins are at the center of the complaints. Consumer advocates and analysts say data center-driven electricity demand has been...