Balancing innovation and consumer protection in AI data centers

As we watch the digital revolution of artificial intelligence unfold before our eyes, this technological boom is already creating friction, and not just in politics or economics, but regarding something much more tangible: power. Lots of power.

AI is not powered by magic or fairy dust. AI is powered by giant data centers crammed full of servers that consume massive quantities of electricity to train the AI models, stream videos, and move information around in milliseconds directly to your fingertips.

The federal government is aware of the pressures. We need more power, but permitting and regulation are delaying these progressions.  The new America's AI Action Plan, issued by the White House last month, notes: "America’s environmental permitting system and other regulations make it almost impossible to build this [energy] infrastructure in the United States with the speed that is required."

This is a national problem affecting our region as well. High-growth areas in Idaho, Montana, and Wyoming are realizing that this power demand is beginning to pressure aging grids that were not designed for loads like that.

The impacts are already being felt by residential energy consumers. Utilities commissions are increasing power bills to make up for the cost of serving immense data and artificial intelligence centers, as the Idaho Capital Sun recently revealed. 

But it’s not all bad news, and the solutions are in sight if we make the right policy decisions.

AI data centers will bring jobs, investment, tax revenue, and establish our region as a tech economy player of scale for the future. They also create faster networks, smarter tools, and a more competitive economy for everyday consumers. The cost of powering this digital revolution, however, should not be borne by existing residential customers. 

We must consider an option that warrants at least as much attention and arguably more than anything else: allowing for the expedited expansion of power generation development and grid modernization.

This requires untangling the regulatory knots that slow or stop innovative energy projects. Excitingly, we are beginning to approach that scale with new, single-purpose power plants around the country, from Idaho National Laboratory efforts to build nuclear alongside AI, to the gas plant with carbon capture in Cheyenne planned expressly for huge data centers to anchor a revitalization of industry. Making space for these projects can enable new demand to be met while simultaneously providing a buffer for the health of pre-existing grids.

Here’s what policymakers should consider:

1. Accelerated Project Approvals: Speed up the review process for new power facilities, regardless of their technology. That way, large energy users can get their own source identified without burdening the existing infrastructure load.

   
   

2. Dedicated Power Agreements: Sponsors above a certain scale in the industrial chain, or operators of large-scale AI and internet equipment, should be encouraged to build and operate their own plants. This will allow the data center's power costs to be borne directly and not passed on to residential customers.

   
   

3. Transparent Cost Tracking: Make public the portion of utility upgrades and electricity purchases aimed at industrial users, apart from general usage. This will help both officials and citizens to see who pays what in the end.

   
   

4. Balanced Growth Partnerships: Innovation should be welcomed, but it should be accompanied by agreements that guarantee reliability and low cost for all others linked into the grid.

   
   

We don’t need to over-regulate AI or hold ourselves back from our role as a digital pioneer, but we have to build smart. Data centers are unique and necessary to the future tech expansion. The power load is substantial, and the effects are real, especially the impact that it has on rate structure, energy reliability, and long-term capacity; something many in our region are already feeling the effects of.

If we fail to plan for the future of this energy need, our region could be left behind in the race for new jobs tied to the digital revolution or unfairly burden residential energy consumers with the costs for this growth.

Let’s ensure that the benefits of AI data centers are accompanied by responsibility, transparency, and fairness. Growth can be a good thing, but only if good planning and better decision-making are involved.