It’s Not Just Data Centers: Privately Owned Water Utilities In Deep Blue State Are Soaking Consumers

Amid rising utility costs from artificial intelligence data centers, Maryland residents are also drowning in water bills.

Western Maryland residents are rationing showers and hauling buckets of water from a creek, according to The Baltimore Banner. Maryland’s privately owned water systems have left some residents paying hundreds of dollars in water utility bills. Data centers use massive amounts of water and electricity to keep units cool 24/7.

“The unrestrained data center development that has occurred in Loudon County has had ripple effects for ratepayers across the entire 13-state electric grid footprint. Marylanders are already paying higher utility bills because of the energy demand of those data centers and the forecasted demand from new data centers proposed in the region,” Brittany Baker, Maryland Director, Chesapeake Climate Action Network.

“Large data centers can consume up to 5 million gallons per day, equivalent to the water use of a town populated by 10,000 to 50,000 people,” reads The Environmental Energy Study Institute’s website.

Data centers are popping up in suburban and rural communities. But rural areas seem to be getting hit the hardest. In April, 67% of new data centers in the U.S. opened in rural towns.

The soaring water bills come as Maryland residents are simultaneously confronting rising electricity costs. AI data centers are contributing to rapidly increasing electricity demand across the country, with residential electricity prices rising about 6.5% nationally between May 2024 and May 2025, according to Energy Information Administration data.

About 26 private water companies operate in Maryland, according to the state’s Office of People’s Counsel. Unlike municipal water systems, privately owned water companies have their rates and services regulated by the Maryland Public Service Commission (PSC). The systems serve a relatively small portion of Maryland’s population, concentrated largely in rural and suburban communities.

The private water companies contacted by the DCNF did not immediately respond to requests for comment.

Private water companies cannot unilaterally increase what their customers pay. Companies seeking higher rates must apply to the PSC, which reviews expenses including maintenance, employee costs and infrastructure investments to determine whether proposed increases are reasonable. The Office of People’s Counsel can also scrutinize the requests on behalf of residential customers.

“The size of the customer base impacts the amount of rate increase per customer. Small systems requiring significant infrastructure replacement and repair naturally result in higher increases per customer than a larger system with similar needs. This is not unique to Maryland; it is the reality for many private water systems across the nation,” Maryland PSC spokesperson Tony Ruffin said.

“The Commission rigorously reviews a private water/wastewater utility’s requested rate adjustments and the expert testimony and analysis from multiple parties when deciding which adjustments are just, reasonable, and in the public interest,” Ruffin said. “This happens in a rate case proceeding, which can take months to complete to allow for deep, multidisciplinary analysis by the Commission and all parties intervening in the case.”

The costs can nevertheless add up quickly for customers of small systems.

In April 2025, for example, the PSC approved a modified settlement allowing nine small water utilities serving roughly 640 customers in Calvert and Charles counties to increase their rates, according to an April 18 press release. Customers were also assessed a $13.89 monthly environmental surcharge for three years to recover costs associated with complying with federal lead and copper regulations, according to the press release.

Maryland Water Service, which operates the Bel Air-Pinto and Highland Estates systems in Allegany County, has also sought substantial increases in the revenue it collects from customers. In 2024, the PSC authorized Maryland Water Service to increase annual revenues across five of its water systems by approximately $1.3 million following a rate proceeding.

The PSC currently says the private water and water-sewage systems under its jurisdiction collectively serve approximately 11,000 residential customers.

The water affordability concerns come as Democratic Gov. Wes Moore has sought to rein in another household expense: electricity.

Earlier in July, Moore announced that the Maryland Energy Administration, PSC and Office of People’s Counsel filed a complaint with the Federal Energy Regulatory Commission requesting the removal of a surcharge costing Maryland ratepayers tens of millions of dollars.

“As the cost of living rises nationally, we refuse to allow big corporations to pad their profits on the backs of hardworking families,” Moore said in a press release at the time. “With this complaint, we are enforcing the Utility RELIEF Act, holding utility companies accountable, and putting money back where it belongs—in the pockets of Maryland families.”

Moore has also expanded state assistance for residents struggling with electricity bills. His administration announced in July that approximately 200,000 Maryland households would receive increased energy assistance, including benefits of up to 32% more for qualifying households.

But Maryland’s efforts to address electricity affordability do not necessarily provide relief to residents struggling with privately operated water systems, which are governed through separate rate proceedings before the PSC.

“For residents dependent on those systems, water is another essential utility increasingly competing for a larger share of household budgets. State legislators and agencies have already committed to lowering costs for Marylanders,” Baker told the DCNF. “In 2024, the Maryland General Assembly passed a bill to ensure that any data center located in Maryland would cover its own costs for the distribution system build out needed to accommodate the facility.”

“Further, the Maryland Office of People’s Counsel has been vigilant about ensuring Marylanders are not overcharged for data center costs including for the transmission build out needed for data centers in the region. Advocates and lawmakers can work together to further protect Marylanders by instituting a state level moratorium on new data center construction. We need to slow down this hyper speed train in order to have the time to develop regulations to protect our grid, our water resources, and communities,” she concluded.