Tesla and Google are joining forces to advocate for broader use of the electric grid, a move they say could lower electricity costs for consumers. The initiative comes as tech giants face criticism from both lawmakers and the public over artificial intelligence's role in driving up energy demand - and Americans' bills.
The companies joined a handful of firms, including data-center developer Verrus, to form the Utilize coalition unveiled on Tuesday. They plan to focus their efforts on state officials and regulators to advocate for better usage of the U.S. electric grid. Meanwhile, Tesla $(TSLA)$, Alphabet $(GOOG)$ $(GOOGL)$-owned Google and others are staring down pressures to pay for their energy costs.
"For decades, we've built the grid to meet peak demand, even though large portions of it sit unused for most hours of the year," Utilize Executive Director Ian Magruder said in a statement. "It's like building an airplane that only flies with full passengers a few times a year."
The group pointed to a recent Stanford University study that found most transmission lines carry between 18% to 52% of available capacity. The group also plans to release research showing that consumers could save $100 billion on their electric bills if the grid is used more.
Electric and gas utilities requested almost $31 billion in rate increases last year, according to PowerLines, a nonprofit that advocates for lower utility bills. That will impact the bills of 81 million Americans, the group said.
Bills have been rising partially because major technology firms are investing hundreds of billions of dollars in AI infrastructure. BloombergNEF recently estimated that the demand for electricity from U.S. data centers will triple between 2024 and 2035.
"As demand grows, the priority has to be meeting new load without driving up costs for existing customers," Ellen Zuckerman, head of energy-market development for North and South America for Google, said in a statement.
Google joined several other tech companies, including Amazon and Microsoft $(MSFT)$, at the White House last week to pledge to protect Americans from rate hikes driven by data centers. However, experts have said it could take consumers years to see relief on their utility bills.
Both Tesla and Google see ramping up energy storage as part of the solution to rising costs. In January, Google invested in a startup that aims to recycle electric-vehicle battery packs to power microgrids.
Tesla also has a growing energy business, and could potentially develop a massive solar operation. The company sells both residential and commercial energy solutions, including to Tesla CEO Elon Musk's xAI, which plans to buy more Tesla battery systems to power its data centers.
"Battery storage and distributed energy resources are already demonstrating how smarter use of the grid can improve affordability," Colby Hastings, Tesla's head of residential energy, said in a statement.