Data Center Demand Drives U.S. Electricity Costs Higher
Surging data center power demand is increasing electricity costs for U.S. households and businesses, prompting state-level audits and new rate structures.
Rapid growth in data center power demand is driving up electricity costs for businesses and households across the United States. The Energy Information Administration expects average residential prices to reach 18.2 cents per kilowatt-hour in 2026, as peak demand forecasts have jumped from 24 gigawatts to 166 gigawatts over a five-year period. Supply growth is lagging behind this demand due to equipment shortages, with gas turbine manufacturers like GE Vernova booking orders four to five years in advance.
State and regional responses vary. In Texas, Governor Greg Abbott ordered an audit of all data centers seeking grid connections after requests exceeded the state's record peak demand by five times. Oregon has implemented rates that increase costs for data centers to lower prices for residential and commercial users. Meanwhile, PJM Interconnection has seen capacity costs spike, with data centers attributed to $29.4 billion of those costs.
To mitigate the financial impact, officials in Ohio, Virginia, and Georgia are introducing dedicated rate classes and stricter contract reviews for large-load users. However, in Georgia, regulators and Georgia Power remain divided on whether these large-load contracts will ultimately save or cost customers money. The North American Electric Reliability Corporation has identified a high risk of supply shortfalls in 13 of 23 assessment areas.
