Consumer advocates: Big data centers threaten to raise electric bills, prolong fossil fuels

Companies like Google, Meta, Microsoft and Amazon are expected to build large data centers in Indiana. Each one requires a massive amount of energy. A consumer advocacy group worries these computer hubs could drive up electric bills for Hoosiers and slow the transition away from fossil fuels.

The utility Indiana Michigan Power expects that by 2030, data centers planned for its territory will use more electricity every year than all the residents it serves today.

Some of these data centers run 24 hours a day, seven days a week. Ben Inskeep with the Citizens Action Coalition said that makes them almost impossible to run on wind and solar power alone.

“So we have very strong concerns that these data center load growth projections are going to be used not only to try and keep these coal plants open, but now to invest in a lot of new natural gas plants that could operate for 30 or 40 years, leading to a lot of carbon pollution in our air," he said.

Inskeep said residents would have to pay for those plants — driving up their energy bills for decades, with no guarantee these data centers would stick around. He said data centers also don't provide many jobs and higher electric bills could discourage other businesses from moving into the state.

READ MORE: Meta bringing $800 million data center to southern Indiana

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He said Indiana Michigan Power has proposed a tariff on data centers that would make companies sign long-term contracts for power.

“And so that would give them some reassurance that the data center is not going to go away in ten years if I&M builds out, you know, equipment, facilities, infrastructure that are going to last 50 years," Inskeep said.

The Citizens Action Coalition has asked lawmakers for a moratorium on new data centers until Indiana can study policies to protect consumers.

In a statement, Indiana Energy Association President Danielle McGrath said state utilities are working with businesses that are building data centers to “better understand their needs.”

“We will not compromise the reliability of the service we provide, and a key priority is to ensure that existing customers are appropriately protected (in terms of both reliability and cost) with the addition of any new customer growth,” she said.

This story has been updated with the statement from the Indiana Energy Association.

Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.