Your utility bills keep going up. Here’s everyone you can blame—AI data centers included |
Your utility bills keep going up. Here’s everyone you can blame—AI data centers included
President Donald Trump announced a “Rate Payer Protection Pledge” for hyperscalers during his State of the Union address, and utility CEOs repeated “affordability” ad nauseam during their February earnings calls—mostly while implementing new rate hikes.Electric and piped natural gas bills became the two largest drivers of inflation last year—rising 7% and 11%, respectively, in 2025—and they’re projected to keep increasing this year and beyond. Utilities requested a record-high $31 billion in rate hikes in 2025 across the nation—more than twice that of 2024—and many of them aren’t implemented yet.Utility expenses are expected to play a huge role in the midterm elections in November, and it has quickly become a bipartisan concern, capturing the attention of Trump and governors across the country.
But who and what are to blame? And how can these problems be solved—or at least lessened?
The AI data center boom is a growing part of cost hikes, but it’s only a piece of the puzzle, and it’s attracting an outsized portion of the blame, according to power analysts and energy watchdogs. After all, residential electricity prices have skyrocketed almost 30% since 2021—going back prior to the launch of ChatGPT.
An aging power grid, climate change, rising gas and equipment costs, coal and gas plant closures, and antiquated utility profit models are all combining to put pressure on utility bills as well, they said.
Utilities, power generators, natural gas producers, hyperscalers, politicians, and state public service commissions all play key roles in either aiding or exacerbating these problems. And, despite what partisan politicians argue, it’s neither the choice between renewable energy nor fossil fuels that’s driving up costs, said Charles Hua, executive director of the non-profit PowerLines.
“It’s the grid. It’s the local poles and wires,” Hua told Fortune. “The grid is getting old, and it costs a lot of money to replace or repair.”
Rather than focus on efficiencies and new technologies, utilities are largely rewarded financially by building new power plants, transmission lines, and distribution systems—all of which pass on expenses to ratepayers, he said.
That argument for more capital spending is easier to make when, after mostly flat power demand this century, U.S. electricity consumption could surge at least 50% from 2025 to 2050—and prices will follow.
Earlier this month, for instance, North Carolina-based Duke Energy announced a five-year, $103 billion capex plan, which would be the largest spending plan of any regulated U.S. utility.
The investor-owned utility organization, the Edison Electric Institute, estimates its members will spend $1.1 trillion in capital from 2025 through 2029. A record high of more than $200........