Will AI Data Centres Raise Power Bills for Canadians?

As Canada faces a potentially massive increase in electricity demand from artificial intelligence (AI) data centres, questions are emerging over whether power supply can keep pace and who will pay for the infrastructure needed to support them.

A single major data centre project under construction in Alberta, for example, could eventually require about 30 percent more electricity than the entire city of Edmonton.

Who pays the costs of that expansion will depend mainly on whether data centre operators are required to pay for the additional generation and grid infrastructure they require, and whether electricity supply can keep pace with demand. The issue is also largely dependent on the jurisdiction and the electricity regulatory frameworks in place.

Looking for Power

The Canada Energy Regulator’s 2026 baseline scenarios forecast that Canada will add 1.5 gigawatts (GW) of data centre electricity load by 2030 and 3.5 GW by 2050, mainly in Alberta, Ontario, and Quebec. A higher-growth scenario projects 2.7 GW by 2030 and up to 12 GW by 2050.

The surge in AI data centres also coincides with Ottawa’s national AI strategy, which envisions large-scale Canadian AI data centres providing up to 850 megawatts of computing capacity by 2030.

Ontario’s Independent Electricity System Operator predicts that data centres will account for 8.6 percent of the province’s total electricity demand by 2050.

The scale of the potential demand is particularly apparent in Alberta, where Meta’s $13 billion AI data centre campus in Sturgeon County, near Edmonton, recently broke ground.

The campus is expected to need a grid connection of approximately 970 megawatts. Alberta says the project could reach 1.8 GW at full buildout.

The province’s electrical system regulator noted in June 2025 that 29 proposed developments, mainly data centres, were seeking grid connections amounting to more than 16 gigawatts of demand, more than the whole province’s peak electricity demand at the time.

Alberta passed legislation in December 2025 establishing what has been described as a “bring your own power” model.

The system encourages and prioritizes projects paired with new generation under a “cost-causation” framework that the province says means “data centres (not Alberta ratepayers) will pay for any necessary transmission upgrades.”

Other provinces have also released frameworks for data centre development, with Ontario releasing its “Data Centre Playbook” in August, and Saskatchewan releasing its guideline in the same month.

The federal government announced its framework earlier in September, saying data centre companies should minimize water use, and not shift electricity costs to Canadians.

Wholesale Prices Vs. Retail Rates

An Aug. 26 report by the Pembina Institute raised some controversy after it said that Meta’s Sturgeon County campus could add between $267 and $462 a year to the electricity bill of an average Alberta household between 2027 and 2031. Meta and the government of Alberta dispute this, saying Pembina’s analysis is flawed.

In its analysis, Pembina said that the higher demand caused by the campus could push wholesale electricity prices higher before new generating capacity is built. Under the rules, data centres are allowed to link up to the electricity grid before their own power sources are operational, something that Pembina electricity program director David Pickup says could temporarily tighten electricity supply and demand conditions, and raise prices.

Alberta’s government disputes Pembina’s conclusion, saying large data centres such as Meta’s will not raise household electricity bills because they will pay their own connection and infrastructure costs. The government says their transmission payments will also help spread fixed grid costs among more users.

The province says Meta will pay roughly $200 million per year in transmission fees and will combine a 970-megawatt grid connection with privately funded new generation.

“Not one dollar of that plant, that connection, or those fees is charged to your household,” the Alberta government wrote in a Sept. 2 online statement addressing concerns about data centres and electricity bills.

Alberta acknowledges that “when supply gets tight, prices rise,” but disputes the idea that projects including Meta will tighten supply enough to raise household electricity bills.

Capital Power has signed an agreement lasting over 10 years to provide Meta with 250 megawatts of power starting in the second half of 2028, while Pembina Pipeline Corp. is developing a 932-megawatt natural gas plant to also provide power to Meta’s campus.

Meta also disputes Pembina’s conclusions, with spokesperson Julia Perreira telling The Globe and Mail that the analysis uses “hypotheticals and assumptions.”

“Here’s the truth: Meta pays the full cost of energy upgrades and electricity that our Sturgeon County data centre will use – those costs will not be passed on to Albertans,” Perreira said.

Pembina highlights that earlier this year, Edmonton-based utility company EPCOR said that even under the province’s new model, adding a lot of new demand from data centres would “almost certainly increase electricity prices.”

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Depends on the Market

Queen’s University energy policy professor Warren Mabe says customers served by local utilities connecting AI data centres could face higher delivery charges, but added that this also depends on which market is being looked at.

“There is definitely a potential for increased bills near AI centres; this is primarily attached to delivery charges by the LDC [local distribution company], as the cost of electricity should remain about the same even under an AI growth pattern,” Mabee said.

“As AI centres get built, local distribution companies need to connect them up, and this can translate into higher costs for ratepayers as the distribution grid is updated.”

However, Mabee noted that a large customer placing consistent demand on the electrical grid can also help utilities make more efficient use of existing infrastructure and spread fixed costs across the market.

“In the right circumstances, having a large and constant demand centre for energy could act as a buffer which would allow LDCs and transmission companies to better manage customer needs,” he said.

“However, if significant new infrastructure is required (i.e. substations, lines, etc.) which are covered at least in part by ratepayers, then there will likely be a bump in pricing.”

Mabee said the situation could differ in Ontario, where he expects more of the additional generation required for data centres to come from the public side of the electricity system.

In places like Alberta, he says, “a lot of the new data centres are being billed as ‘behind the meter’ meaning that new generation capacity is being developed by the data company.” However, he says, “in places like Ontario, that new power is likely to come from the public side of the meter.”

Pierre-Olivier Pineau, a professor at the Department of Decision Sciences at HEC Montréal, also says who ultimately pays depends largely on how costs to the grid are allocated.

He argued that data centres “should not impact more those who live nearby, because network and energy costs are usually socialized at the provincial level,” while acknowledging that there are exceptions.

“When there are municipal distributors, like in Ontario and Alberta, if new data centers require large distribution network upgrades, there could be cost increase specifically for those under the same local utility,” Pineau told The Epoch Times.

However, he noted that these cost increases “could be avoided by making new clients pay whatever cost surplus their own consumption is inducing.”