Senate investigation finds AI data center firms resist paying full cost of grid upgrades

A nearly year-long Senate investigation into the companies building the country's AI data centers has concluded that the industry's largest players are not paying their "fair share" of the costs those facilities impose on the electrical grid, while continuing to seek nondisclosure agreements and state tax breaks that keep the public from assessing the trade-offs. The findings were released October 9 by Democratic Senators Elizabeth Warren, Chris Van Hollen and Richard Blumenthal in a 27-page report drawn from sworn-style written responses and staff interviews with seven of the country's largest data center operators.

The 27-page report, titled "Power and Profits: How the AI Data Center Boom Costs Households and Communities," is the product of an inquiry the three senators opened on December 15, 2025, when they sent detailed written requests to Amazon, Google, Meta, Microsoft, CoreWeave, Digital Realty and Equinix. It does not allege that any law was broken. Its conclusion, instead, is that companies worth a combined trillions of dollars have publicly pledged to cover the costs their data centers create while privately resisting the specific accounting standard, known as "but-for" cost allocation, that would hold them to that pledge in full.

What the companies told Congress

In their written responses, each company offered some version of a commitment to pay costs tied to its own operations. Google said it was "committed to contributing to other costs associated with growth"; Amazon said it makes "substantial investments in new generation and transmission infrastructure that benefit all ratepayers"; Meta said it would "help support new and upgraded grid infrastructure, including power generation, substations and transmission lines." The senators' report argues that in practice, these commitments cover only the infrastructure built exclusively to serve a single company's facility, not the broader upgrades to shared transmission and distribution lines that a large data center's power demand can trigger — costs that get spread across all ratepayers in a utility's territory.

The report also documents the companies' routine use of nondisclosure agreements with utilities, landowners, commercial partners and, in some cases, government officials. Four of the seven companies surveyed — described in the report as the "Big Tech" hyperscalers — acknowledged seeking NDAs specifically with local governments. Asked to justify that practice, Meta told Congressional staff in writing that maintaining confidentiality "increases efficiency and speed by enabling all stakeholders to remain focused on the needs of a proposed project," a framing the report says implicitly excludes local residents from the category of relevant stakeholders.

"Maintaining confidentiality during project development increases efficiency and speed by enabling all stakeholders to remain focused on the needs of a proposed project." — Meta, in written correspondence to Senate staff, quoted in the "Power and Profits" report

Google offered a similar rationale, writing that conveying "speculative information" to the public during early site diligence "can be more harmful than withholding" it.

The scale of the numbers

The report situates those practices against a backdrop of fast-rising electricity costs. It cites projections that data centers will account for roughly 20 percent of U.S. domestic energy use by 2035, up from about 5.9 percent today, and notes that a typical AI data center consumes as much electricity annually as 100,000 households, with some facilities under construction projected to draw as much as four million homes' worth. In the 13-state footprint of the PJM Interconnection grid operator, the report estimates data center demand will add $6.3 billion in ratepayer charges in 2028 and 2029 alone. It also cites a finding that investor-owned utilities nationally requested $18 billion in rate increases in 2025, the highest level in decades, with demand growth attributed primarily to the data center industry.

Specific state cases feature prominently. In Virginia, the report says, roughly three-quarters of utility Dominion Energy's 2025 transmission spending — $6.2 billion — was tied directly or indirectly to data centers, with state regulatory staff testifying that about 45 percent of those costs were attributable to specific facilities even though the costs are spread across all of Dominion's customers. In Maryland, ratepayers are projected to pay $1.6 billion over the next decade for transmission infrastructure the report says will "mainly serve out-of-state data centers." A separate study cited in the report found utilities charged ratepayers roughly $5 billion between 2022 and 2024 to fund more than 150 transmission projects "needed only to connect data centers."

On incentives, the report finds that none of the seven companies could or would provide comprehensive, quantitative evidence of permanent job creation at specific facilities, despite collectively accepting billions of dollars in state and local tax subsidies. As an illustration, it points to Illinois, where a tax incentive requires data centers to create 20 permanent jobs: 29 of the 34 facilities that had received the incentive as of the end of 2025 created exactly 20 jobs, the statutory minimum. A Meta-linked facility operating under the name Goldframe LLC was a rare exception, the report says, reportedly creating 50 jobs after receiving $50 million in tax benefits — a rate of roughly $1 million in public subsidy per job.

The report also revisits the disclosure fight around Meta's $50 billion data center in Louisiana. Entergy Louisiana, the local utility, said publicly in a press release announcing an expanded agreement with Meta that the arrangement is structured so Meta "covers its own costs" and "pays its full cost of service." The Senate report notes that, in a case still pending before the Louisiana Public Service Commission, an independent consultant retained by the commission concluded that a new power plant purchase tied to the project was "driven primarily" by the Meta facility — a characterization Entergy has disputed, arguing in regulatory filings that "no single customer is driving" the acquisition.

A mixed record on changing course

The companies' positions have shifted only partially since the senators' first round of letters prompted public commitments earlier in 2026. Microsoft announced in January that it would stop seeking NDAs with local governments, describing the move as part of a broader effort to be "transparent with the communities where we operate or seek to operate." The new report notes that commitment is narrower than it first appeared: Microsoft confirmed to Congressional staff that it will continue to request NDAs with state-level agencies such as public utility commissions and with the energy utilities themselves. Amazon separately announced in early October that it would stop seeking NDAs with unspecified "government agencies," though the report says it remains unclear which bodies that commitment covers or whether it extends to Amazon's contractors. Google and Meta declined to make any comparable commitment regarding local governments.

Earlier responses from the companies, gathered after the senators' original December 2025 letters, led the senators to conclude at the time that voluntary commitments from the industry would not be sufficient without additional guardrails. Coverage of the new report's release, including by the regulatory-focused outlet MLex, has so far noted no formal rebuttal from any of the seven companies to its specific findings.

What happens next

The senators frame the report as a foundation for further legislative action rather than a conclusion to the inquiry. Van Hollen has already introduced the Power for the People Act, a bill co-sponsored by Blumenthal and five other Democrats that would push for data center-specific electricity rate classes intended to separate large AI facilities' costs from the rates charged to residential customers; the measure has not advanced to a floor vote. Separately, the U.S. Energy Information Administration began a mandatory survey of data center energy use earlier this year at Warren's and Senator Josh Hawley's request, a step intended to give regulators better data than they currently have on the industry's actual power draw.

Because electricity rates are set mostly by state public utility commissions rather than federal regulators, the senators acknowledge that the most immediate fights over who pays for the AI buildout will continue to play out state by state. Several states have already begun reconsidering data center tax incentives passed over the past decade as the scale of the costs has become clearer, even as utilities and data center operators continue to sign new agreements, like the expanded Entergy-Meta deal in Louisiana, that each side describes in sharply different terms.