TLDRs:
- Residential electricity bills surged in Virginia, Illinois, and Ohio due to growing data center demand.
- PJM Interconnection cites AI data centers as main driver of capacity market price hikes.
- Politicians blame tech companies for rising costs ahead of upcoming U.S. elections.
- States with independent grids, like Texas and California, see smaller utility increases.
Residential electricity bills across the United States are climbing at rates that have many households feeling the pinch, and the nation’s booming artificial intelligence industry is facing increasing scrutiny for its role.
In states with dense concentrations of data centers, including Virginia, Illinois, and Ohio, utility costs are rising far faster than the national average, prompting political and public backlash.
According to the U.S. Energy Information Administration, residential utility bills grew about 6% nationwide in August 2025 compared to the previous year. Yet in Virginia, bills jumped 13%, in Illinois 16%, and in Ohio 12%, far outpacing the broader market. Experts attribute much of this surge to the energy-hungry data centers that power AI labs and tech giants, some consuming as much electricity as entire cities.
Electricity bills rise sharply in key states
Virginia, home to the highest concentration of data centers worldwide, has become a flashpoint for voter frustration.
Governor Abigail Spanberger, a Democrat, highlighted these rising costs in her recent campaign, pledging that tech companies must “pay their fair share” of energy expenses.
Similarly, Illinois and Ohio are grappling with rising prices linked to the expansion of data center operations, with hundreds of facilities consuming substantial amounts of power on the PJM Interconnection grid.
Data center expansion fuels capacity market costs
The PJM Interconnection, serving over 65 million people across 13 states, has experienced significant supply-demand imbalances. Auctions to secure power capacity for 2025–2026 resulted in a $16.1 billion bill, with AI data centers accounting for approximately 63% of that total.
Analysts from Monitoring Analytics confirmed that “data center load growth is the primary reason for recent and expected capacity market conditions, including tight supply and high prices.”
These capacity costs are ultimately passed on to residential consumers, explaining the steep increases in utility bills. Beyond data centers, other factors such as an aging grid, rising construction costs for new transmission lines, and increasing electrification of transportation also contribute to higher rates.
Politicians target tech firms over affordability
The issue has gained political traction, particularly with midterm elections approaching. Senators Richard Blumenthal and Bernie Sanders have criticized the White House for perceived “sweetheart deals” with Big Tech, arguing that Americans are subsidizing the costs of data centers.
Across the states, local leaders are emphasizing energy affordability, framing rising electricity prices as a central concern for voters.
Regional grids show uneven pricing impact
Not all states with large data center footprints have experienced similar spikes. Texas, with over 400 data centers, saw a modest 3.8% increase in electricity costs, thanks to its independent ERCOT grid and faster supply connection processes. California, despite its high prices and dense data center network, recorded only a 1.2% rise year-over-year, partially due to wildfire prevention cost adjustments by utilities like PG&E.
Experts caution that without careful planning and regulatory oversight, electricity costs could remain high across the PJM region for the foreseeable future.
Rob Gramlich, president of Grid Strategies, noted, “It’s hard to see utility bills coming down in this decade.” For communities near AI data centers, balancing technological growth with affordability is becoming an urgent policy challenge.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
