Microsoft said on Jan. 13 that consumers will not pay more for their energy bills when the tech titan establishes data centers in communities across the United States.
“We’ll pay our way to ensure our datacenters don’t increase your electricity prices,” Smith wrote.
The software maker plans to pay utility rates high enough to cover its electricity costs and to work with utility companies to increase the electricity it requires. It will also innovate in its data centers to ensure they operate more efficiently and champion policies that deliver “affordable, reliable, and sustainable power.”
“There’s no denying that AI consumes large amounts of electricity. While advances in technology may someday change this, today, this is the reality,” Smith said.
Microsoft also pledged to replenish more water than it consumes.
As more tech companies consume enormous amounts of water to cool electronic equipment, the public has become increasingly concerned that water utility bills will surge or their wells will dry up.
But Smith said he believes his company will not contribute to the problem.
“For communities where water infrastructure constraints pose challenges, we will collaborate with local utilities to understand whether current systems can support the additional demand associated with datacenter growth,” he wrote. “If sufficient capacity does not exist, we work with our engineering teams to identify solutions that avoid burdening the community.”
Trump Presses Tech Giants
Microsoft’s statement comes soon after President Donald Trump urged technology companies to “pay their own way” and not rely on Americans to cover their power consumption through higher electricity costs.
The president alluded to Microsoft as one of the first to “make major changes.”
Utility bills have become a major affordability concern for U.S. households.
Last year, electricity costs increased by 7 percent nationwide, according to the Bureau of Labor Statistics. The cost of electricity has risen by 38 percent since 2021.
In a November report, he attributed the increase, in part, to intensifying demand from data centers and the costs of aging grid infrastructure, further noting that “regional capacity shortfalls are adding to system costs and driving higher consumer rates.”
Companies building these data centers are now focusing on states with the lowest energy costs, with one economist pointing to Arizona, Texas, and the central United States as key locations for the infrastructure.
While land availability is critical, so is power, says Rick Pederson, economist and chief strategy officer at Bow Rival Capital.
“You can’t simply point to land availability alone; the next critical factor is power—its cost and its availability,” Pederson said in a note emailed to The Epoch Times.
“These data centers are choosing to locate adjacent to low-cost power due to factors such as state regulation, transmission infrastructure, and interconnect access, all of which are vitally important to the boom we’re seeing.”
Electricity prices in Texas, he says, average about 8 cents per kilowatt-hour. By comparison, commercial users in California and New York pay approximately 30 cents and 21 cents, respectively.
“That cost differential attracts major manufacturers and large power users, including data centers,” he said.
Similar efforts being undertaken in other states.
Aldgra Fredly contributed to this story.
