A power substation near the LC1 CloudHQ data center in Ashburn, Virginia, on March 27, 2024.
Nathan Howard | Bloomberg | Getty Images
Voter anger over soaring electricity prices is fueling a political backlash against the artificial intelligence industry’s data centers, with Democrats accusing the Trump administration of failing to address the issue as it focuses on affordability ahead of next year’s midterm elections.
Abigail Spanberger won last week’s gubernatorial election in Virginia, home to the world’s largest concentration of data centers, on a promise to make the industry “own its fair share” of rising electricity prices.
New Jersey Governor-elect Mikie Sherrill declared a state of emergency over electricity rates on her first day in office, promising to freeze rates in the Garden State. Two Democrats were elected to Georgia’s state commission, which regulates public utilities, breaking complete Republican control. One candidate blamed data centers in part on rising prices in the Peach State.
Following the election victory, Democratic senators in Washington, led by Sen. Richard Blumenthal of Connecticut and Sen. Bernie Sanders of Vermont, took aim this week at what they called the White House’s “sweet deals with big tech companies” and accused the administration of failing to protect consumers from “enforced subsidies for data center costs.”
“As a result, ordinary Americans are already forced into a war with multi-trillion dollar corporations to keep the lights on in their homes,” the senators said in a letter to the White House on Monday asking for a solution.
President Donald Trump has promised to cut household electricity bills by 50% in his first year in office. But U.S. home prices rose by an average of about 6% nationwide in August compared to the same period in 2024, according to October data from the Energy Information Administration. During the same period, prices rose about 21% in New Jersey, 13% in Virginia and 5% in Georgia.
Abraham Silverman, who served as general counsel for the New Jersey Public Utilities Commission from 2019 to 2023 under outgoing Democratic Gov. Phil Murphy, said the reasons for the increases vary by state and region.
But data centers are playing a major role in increasing rates on the PJM interconnected power grid, which serves New Jersey and Virginia, Silverman said. PJM is the largest network in the United States, serving more than 65 million people across 13 Mid-Atlantic states and parts of the Midwest and South.
“Basically, starting in 2025, we’re adding the equivalent of one Philadelphia person to the grid every year, and that number shows no signs of slowing down,” Silverman said of the increase in demand nationwide. “Where is the increased load coming from? The answer is the data center.”
soaring prices
The conditions that caused residential electricity bills to soar this year, especially in the PJM region, were rooted in the pre-Trump administration, just as investment in AI data centers was just starting to ramp up.
The amount PJM agreed to pay at the end of 2022 to secure power plant capacity totaled $2.2 billion to ensure power plant availability should electricity usage increase. In 2024, claims jumped more than 500% to $14.7 billion. This year, it rose another 9% to $16.1 billion.
An independent watchdog that monitors PJM found that data centers are the main culprit behind the skyrocketing capacity prices.
“The current state of the capacity market, both actual and projected, is almost entirely the result of massive load addition by data centers,” watchdog Monitoring and Analytics concluded in an Independent Market Monitor report published in June.
Those capacity prices will ultimately be reflected in household electricity bills, Silverman said. “This is a very big component of the affordability crisis that we’re experiencing right now.”
Owned by New Jersey power company PSE&G Public utilities groupacknowledged the impact of higher capacity prices in a February letter to consumers warning of a 17% increase in their bills, although it did not mention data centers.
“Power companies do not earn a profit from electricity supply. These costs are passed directly to customers,” the company said.
As data center construction accelerates, the problem is likely to worsen, at least for now. For example, data centers in advanced stages of planning in Pennsylvania used 20.5 gigawatts of electricity in the third quarter, up more than 40% from 14.4 gigawatts in the previous quarter, according to the utility company. PPL. This is equivalent to the electricity consumption of approximately 17 million U.S. households.
“We want to be clear that this load increase is real and is happening fast and furious,” PPL CEO Vincent Sorge said during the company’s latest earnings call. “The bottom line is we need to start building a new generation as soon as possible.”
Rob Gramlich, president of power sector consulting firm Grid Strategies, said residential utility costs are unlikely to fall this decade, as demand is expected to remain high and supply to be tight.
political blame game
Democratic senators accused the Trump administration of exacerbating affordability problems with attacks on renewable energy. President Trump has sought to block the expansion of wind power, particularly offshore wind projects, and his signature domestic bill, the One Big Beautiful Bill, would phase out tax credits for renewable energy.
Renewable energy is the most readily available source of generation to meet new demand, with solar, battery storage and wind accounting for more than 90% of projects waiting to connect to the grid, according to August data from consulting firm Enverus. Sherrill and Spanberger campaigned to expand renewable energy in New Jersey and Virginia with the goal of lowering energy costs rather than reducing carbon emissions.
The White House blames the Biden administration and its renewable energy policies for driving up electricity prices. White House Press Secretary Taylor Rogers said in a statement that President Trump “declared an energy emergency to reverse four years of disastrous President Biden policies, accelerate major grid infrastructure projects, and promote expansion of coal, natural gas, and nuclear power.”
Silverman said the AI industry will need to pay for the new generation and transmission costs needed to support data centers. “That would really go a long way toward protecting maternal and child consumers from higher costs,” he said.
“The industry is committed to paying the full cost of service for the energy it uses,” the data center coalition, a lobbying group, said in a statement.
