As Pennsylvania attracts more AI data centers, one possible side effect may be higher electricity costs for local businesses.
Nearly half of Pennsylvania's private-sector workforce — about 2.5 million people — works for the state's more than 1 million small businesses, according to a Pennsylvania Sustainable Business Network report cited by WESA. The report says those companies are especially exposed to increases in electricity prices.
Many of the firms have little room in their budgets, so even a relatively small rise in utility costs could influence staffing, pricing, and stability.
To illustrate the pressure, the report cited a March Voice of Main Street poll of 247 small business owners nationwide. In that survey, 81% said their utility bills had gone up, more than half said they raised prices in response, and 1 in 5 said they froze hiring.
Michael Jarrett, the lead researcher on the report, said that kind of pressure can unsettle small employers.
"Even a 10% increase in annual energy costs can have a significant impact on their ability to hire individuals and employ more people in the state, grow and expand their businesses, or in some cases just stay afloat," Jarrett told WESA.
The report also cited jumps in PJM Interconnection capacity costs in Pennsylvania, saying they were "expected to translate into a 10-20% rise in residential electricity bills and up to a 29% increase for businesses."
The concern is gaining visibility as artificial intelligence's expansion stresses the electric grid.
Large data centers are essential to training and running AI systems, and bringing them online can create major new demands on power infrastructure. Backers of AI say the technology could help with grid management, improve forecasting, and advance cleaner energy systems. But its rapid spread has raised concerns about heavy electricity and water use, security problems, misuse, and downstream costs.
Those extra costs are often much easier for big corporations to handle than for small businesses.
Jarrett said large companies usually have more options and bargaining power when they deal with energy expenses.
"There are plenty of ratepayer protections for residential consumers, especially for low-income individuals, but that doesn't really exist for small businesses," he told WESA. "They're kind of in between."
In response, the report's authors backed Gov. Josh Shapiro's Governor's Responsible Infrastructure Development (GRID) standards, which, as WESA reported, are designed to keep energy affordable and promote community involvement in data center projects.
The report also called for communities to negotiate benefit agreements connected to these developments.
"We do caution that mandating a negotiation without funding appropriate technical assistance does produce access without agency," Jorge Luis Fontanez, another contributor to the report, told WESA.
Fontanez also said small businesses belong in those conversations, and he noted the Pennsylvania Office of Small Business Advocate could be expanded.
Beyond that, the report proposed support, such as utility bill aid, tax credits for energy costs above a certain threshold, and broader energy efficiency grants.
Pennsylvania isn't alone in grappling with this. Around the country, AI data centers are straining power systems, with ripple effects for electric bills and local economies.
• In Maine, AI demand is driving up electricity costs as data centers expand rapidly.
• In New Jersey, another 20% in electric bills could follow unchecked AI expansion.
• Across Big Tech, the AI boom is outrunning the power grid despite massive spending.
• AI data centers devour 6% of U.S. electricity as deployment reaches scale.
What's happening in Pennsylvania lines up with a national pattern. As data centers spread, the debate is increasingly about electric rates, grid capacity, and who foots the bill.
Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.