Highlights
- Four mechanisms potentially linking data center expansion to energy poverty risks are identified.
- Large load growth can translate into affordability stress through infrastructure expansion needs.
- Highly concentrated load growth and water dependence can amplify risks for reliability and service continuity.
- Backup generation can create localized exposure burdens that may worsen energy service adequacy risks for vulnerable households.
- Emerging responses focus on cost allocation and transparent planning, but uncertainties remain.
Abstract
Accelerated by the current surge in artificial intelligence applications, the expansion of data centers is now a significant driver of electricity demand growth in the United States, with potential implications for household energy poverty. This paper synthesizes the latest available evidence to identify four possible mechanisms through which rapid data center load growth may pose energy poverty risks. These mechanisms concern affordability pressures related to large load growth, service continuity risks associated with the high geographic concentration and water dependence of data centers, and service adequacy risks linked to backup generation. In response to these concerns, emerging institutional and policy developments focus on cost allocation and tariff design, interconnection and reliability planning, and environmental oversight. Outcomes will depend on implementation, transparency, monitoring, and adaptation in an era of rapidly evolving conditions.