“It’s Utilities Versus Rent” – Data Centers Send Energy Prices Soaring

The surge in data center construction to power today’s AI and cloud computing demands has sent electricity prices skyrocketing over the last few years. And, as Bloomberg reports, it is only getting worse.

With electricity costs now as much as 267% higher compared to five years ago in some parts of the US, fingers are being pointed directly at data center activity for blame. And while some – especially generously funded lobbies – are eager to dissemble and distort, claiming that on the contrary, electricity prices are barely keeping up with inflation and that data centers have little to no impact on electrical bills, the map below shows that more than 70% of the nodes that recorded pricing increases are located within 50 miles of significant data center activity.

Take Nicole Pasture: the Baltimore resident said her utility bills are up 50% over the past year. She is also a judge who rules on rental disputes in the city’s district court and sees people struggling with their power bills.

“It’s utilities versus rent,” she said. “They want to stay in their home, but they also want to keep their lights on.”

New data center construction projects are announced weekly, sometimes every day. Some of the construction timelines have upwards of 100 MW of new data center demand being built only two years from groundbreaking. This has to be contrasted against the rate of new energy generation construction, with the recent vite among PJM Interconnection stakeholders resulting in a failure to even select a plan for how to add data centers to the grid. 

“The voting reflects the nearly impossible challenge of trying to ensure resource adequacy and control ratepayer costs, while also allowing data center development in a market that is already short on generation supply and faces a 5-to-7 year timeline to bring on new large-scale generating resources,” Jon Gordon, a director at Advanced Energy United, a clean energy trade group, said in a bulletin on the meeting.

While some utilities have been able to pass the burden of higher electricity costs onto the owners of the large loads, most of the costs of expanding grid capacity inevitably find their way to consumers.

According to Bloomberg, in northern Virginia, Dominion Energy cited data center demand, inflation and higher fuel costs when asking regulators to raise its customer bills by about $20 a month for the average residential user over the next two years. Dominion also forecasts peak demand would rise by more than 75% by 2039 with data centers. It would be just 10% without.

And it’s only getting worse: with hundreds of gigawatts of future power demand from data centers built by companies like Oracle and Microsoft, Goldman writes that “eight out of the 13 US regional power markets are already at or below critical spare capacity levels.”

“eight out of the 13 US regional power markets are already at or below critical spare capacity levels.” – Goldman https://t.co/YYAGUukfwR pic.twitter.com/eU4XPFAMrp

— zerohedge (@zerohedge) November 23, 2025

In other words, the electricity crisis is not around the corner: it’s here already.

And since surging electricity costs are borne by everyone, the topic is rapidly becoming a political one…

In one year, this will be the most popular chart on this site pic.twitter.com/h93gWXMoNL

— zerohedge (@zerohedge) August 11, 2025

… and we previously highlighted that the blame game has already started between Republicans and Democrats. Yet some localities seem to be more focused on solving the problem than merely grandstanding: consider the case of Texas where most data centers already have their own “behind the meter” onsite power generation, a key step to keeping overall power costs contained.

To prevent skyrocketing electric bills, every state has to follow the Texas example: each data center must have its own “behind the meter” onsite power generation.

“We believe data centers should pay for the full cost of their power,” Dominion Energy spokesperson Aaron Ruby… https://t.co/0u1owTeAs8 pic.twitter.com/8W421s3rzV

— zerohedge (@zerohedge) November 23, 2025

Luckily for US consumers, the race for data center developers to secure behind the meter power is already on, with demand for modular reactors ratcheting higher.

We recently we highlighted the $700 million capital raise for privately-held modular reactor developer X-energy, as Amazon backs their 12-reactor project in Washington State to meet data center demand. We also highlighted the recent announcement between Nano Nuclear and BaRupOn for potentially developing upwards of 1 GW worth of nuclear energy to power the LAMP and Innovation Hub in Texas. Fermi America’s Matador Project, also in Texas, will utilize nuclear energy among other power generation sources, including gas, wind, and solar, to power a massive data center campus using a behind the meter grid.

So while power bills are soaring due to the ongoing avalanche of data center deployment to power the chatbot revolution (because someone has to write junior’s high school essay), there is some hope that recent developments will put a lid on just how high the prices rise.