WASHINGTON, Jan 24, 2026, 03:23 EST
Electric bills are rising across much of the U.S., and a Fast Company report on Thursday points to the AI data center boom as a key strain on the grid. In the Bay Area, PG&E’s average bill has surged nearly 70% over five years, the report highlighted. Meanwhile, a Bloomberg analysis it referenced found prices near some data centers have jumped as much as 267% in the same period. Ryan Hledik of Brattle Group said, “We are seeing utilities run out of that spare capacity.” Fast Company also noted Microsoft has committed to covering grid upgrade costs linked to its new data centers. Oregon, meanwhile, has passed laws forcing data centers to foot their own bills. Some proposals would make these facilities “interruptible,” meaning “they’re going to be the ones that get shut off first, not Grandma’s house,” according to NRDC’s Jackson Morris. (Fastcompany)
TIME reported that the average monthly residential electricity bill climbed to about $156 in 2025, up from roughly $121 in 2021—a nearly 30% surge. From January through October alone, bills jumped 12.7%. The magazine referenced projections from the National Energy Assistance Directors Association, warning that households could spend close to $1,000 this winter just to heat their homes. It also highlighted estimates of up to four million utility disconnections in 2025, as federal heating aid dropped from $6.1 billion in 2023 to around $4 billion this year. The report pointed to an aging grid, noting that roughly 70% of U.S. transmission lines—those high-voltage wires moving power over long distances—are over 25 years old. MIT’s Christopher Knittel told TIME that consumer electricity prices have outpaced overall inflation, while Kenny Stein of the Institute for Energy Research said: “Anything that’s being built or installed right now costs more than it did just five years ago.” (TIME)
The problem has moved beyond fuel costs. Now, the focus is on where the next wave of spending goes as utilities install wires, transformers, and new power generation to meet rising demand. Data centers—massive facilities filled with servers and cooling equipment for cloud and AI services—are becoming a hot spot since they often force significant local infrastructure upgrades.
Electric utilities typically recover hefty capital costs via rates set by state regulators. This process drags out bill relief during periods of high inflation. New projects often appear piecemeal, quietly, only becoming noticeable months down the line.
One approach picking up steam is carving out large new loads into a distinct rate class—a specific billing category—so the “incremental costs,” or the extra expenses of serving a new customer, don’t get spread across everyone’s bill. Another tactic is curtailment: “interruptible” service that lets utilities dial back data center demand during peak times, avoiding the need to overbuild capacity for just a handful of hours annually.
Delegate Andy Shamblin pointed the finger at federal permitting in a West Virginia opinion piece this week. He argued that new mines, power plants, transmission lines, and gas pipelines often get bogged down in years of red tape and lawsuits before breaking ground. Those delays, he said, drive up costs that consumers ultimately see in their utility bills. (WV News)
Senator Shelley Moore Capito, a West Virginia Republican, leads the Senate Environment and Public Works Committee, overseeing highways, water infrastructure, and EPA supervision. The committee’s site names Democrat Sheldon Whitehouse as ranking member—a duo Shamblin noted could influence bipartisan efforts on permitting. (Senate)
None of these solutions promise cheaper rates. Utilities must still fund and maintain the grid, and passing costs onto data centers could drive up prices for the services they provide. The curtailment rules come with risks too: if utilities get demand wrong, “interruptible” customers might resist, while communities counting on new jobs and tax revenue could face project delays or redesigns.
For households, timing remains the toughest challenge. Even if regulators shift responsibility for new infrastructure costs, the bill arriving at the mailbox will still reflect years of past investment choices. The upcoming rate cases—where regulators sign off on utility charges—are set to keep the debate going.
