August M
Millions of Americans are helping finance major electricity projects before they are even built, as utilities race to expand power grids to meet soaring demand from artificial intelligence and data centres, according to a Reuters investigation.
The review found regulators across the United States are increasingly allowing utility companies to pass construction costs directly onto customers through higher electricity bills, reports Reuters.
Rising energy burden
Reuters reported that more than 40 US states now permit some form of “Construction Work In Progress” policy, known as CWIP, which allows utilities to recover infrastructure costs during construction rather than after completion.
A decade ago, fewer than 20 states used similar measures, according to research cited by Reuters from consulting firm The Brattle Group.
Supporters say the system helps utilities secure financing more cheaply and speed up urgently needed upgrades to ageing grids strained by data centres and growing electricity demand.
But critics argue households and businesses are being forced to absorb financial risks for projects that may never deliver promised benefits.
“All this does is shift the financial risk to the ratepayer,” Paul Cicio, president of the Industrial Energy Consumers of America, told Reuters.
Data centre tensions
The Reuters report also highlighted growing environmental disputes linked to the rapid expansion of global data centre infrastructure.
In Chile, environmental authorities approved plans by Amazon Web Services to build a major data centre complex near Santiago despite objections from local residents.
Community groups argued the project could threaten conservation land, water resources and potentially require construction of a high-voltage transmission line in the Andean foothills.
Authorities ruled in April that any future power-line proposal would need separate environmental review, allowing the AWS project to proceed.
Amazon Web Services said the facility was designed to minimise energy and water consumption while meeting Chilean environmental standards.
Climate pressure
Experts told Reuters that governments face increasing pressure to balance investment in digital infrastructure with environmental and social concerns.
Sebastian Diaz, a former adviser on Chile’s national data centre strategy, said the country had become highly attractive to technology companies but warned growth must be carefully managed.
Meanwhile, energy analysts say aviation emissions, climate-driven wildfires and fossil fuel dependence continue to complicate global sustainability goals.
Reuters also reported renewed concern among scientists over worsening climate extremes as El Niño weather conditions intensify and temperatures continue rising worldwide.
Sources: Reuters, Transport & Environment, The Brattle Group
