Responding to calls from President Donald Trump, major technology companies have begun building dedicated power plants alongside their new data center campuses to supply their own electricity needs independently.

The Trump administration argues that this approach will help shield consumers from sharp increases in electricity prices as data center expansion accelerates. However, energy experts warn that the outcome could be exactly the opposite.

As the rapid growth of artificial intelligence fuels an explosion in the number and size of data centers, electricity demand has surged dramatically. A report published by Business Insider in June estimated that if all data centers approved through 2025 become operational, they could consume between 224.3 and 358.8 terawatt-hours of electricity annually, representing an increase of as much as 50% compared with the previous year.

For comparison, that level of electricity consumption is roughly equivalent to Mexico's entire annual power usage, despite the country having a population of more than 130 million people.

Until now, data centers have relied almost entirely on local power grids, contributing to significant increases in energy costs for nearby consumers due to the sudden jump in demand.

"We are witnessing a massive transfer of wealth from residential electricity customers to large corporations, including data centers, utility companies, and their parent firms that profit from building additional energy infrastructure," said David Lapp, Maryland's People's Counsel, last year.

"The utility regulatory system is failing to protect residential consumers, which is worsening the energy affordability crisis," he added.

In response, lawmakers from both the Republican and Democratic parties have increased pressure on technology companies to bear the cost of their own energy needs.

Political pressure, combined with lengthy wait times for grid connections, has also pushed major technology firms to develop independent energy sources. While some projects rely on clean energy or hybrid systems combining natural gas with renewables, most of the new projects are powered primarily by natural gas.

The unintended consequence

At first glance, private power generation appears likely to reduce pressure on public grids and protect consumers from higher electricity costs. In practice, however, the effect can be the opposite when data centers rely heavily on natural gas, as most current projects do.

According to a report by Utility Dive, natural gas is a globally traded commodity. As data centers consume massive volumes of gas, they inevitably compete with other consumers, driving prices higher.

As a result, households could face rising heating and electricity bills at the same time.

The growth of decentralized power generation dedicated to data centers could also create what some experts describe as a "shadow grid" operating outside the regulatory framework that governs traditional utilities.

The report noted that a data center with its own gas-fired power plant contracts directly with gas suppliers rather than public utility companies, placing gas pricing outside the oversight of state regulators.

An unfair energy bill

These facilities can also leverage their scale to secure large-volume, long-term gas contracts, as seen in states such as Texas, Pennsylvania, and New Mexico. This allows them to obtain lower gas prices while potentially pushing costs higher for other consumers.

Concerns extend beyond pricing. Experts warn that the emerging "shadow grid" could become a significant source of greenhouse gas emissions that are not subject to the same regulatory scrutiny as traditional power generation.

Critics argue that the Trump administration's approach misses a major opportunity to encourage technology giants to invest in upgrading and expanding America's aging and increasingly strained electricity infrastructure.

Such investments would also benefit the technology companies themselves, as long waiting periods for grid connections have become one of the biggest obstacles to artificial intelligence expansion.

Experts contend that if large technology companies were required to shoulder a significant share of the cost of modernizing the power grid, it could help reduce energy prices for consumers while maintaining stronger oversight of energy production and emissionsdelivering benefits for both households and the environment.