The price of wholesale electricity has increased by as much as 267% over the last five years in data center hot spots
Electricity costs are climbing across the United States — and they’re climbing even faster in regions near data centers, according to a Bloomberg investigation into power prices. The analysis found that wholesale electricity rates have jumped by as much as 267% over the past five years in data center hubs, with utilities passing those higher costs along to residential customers.
Data centers — which power cloud storage, video streaming, and AI training for companies of every size — consume enormous amounts of electricity and water. Their power demand is expected to double by 2035 as generation capacity expands to meet rising data needs.
AI has been a key driver of this surge. Tasks as routine as ChatGPT queries depend on data centers, and major tech firms including Microsoft, Meta, Google, and Amazon are investing heavily in both new data infrastructure and alternative power sources such as nuclear energy. OpenAI, the maker of ChatGPT, is building a large data facility in Abilene, Texas, and recently announced plans for five more massive centers across the U.S.
Bloomberg analyzed information from 25,000 nodes operated by seven regional transmission authorities to assess changes in wholesale power prices since 2000. It found that price spikes are influencing costs for homes and businesses alike, including the fees utilities charge to maintain and expand electrical grids.
“Customers who don’t live near a data center can still be affected,” the report noted, “since their power draws from the same grid.”
One major factor behind the strain is that energy providers must not only generate electricity but also have the capacity to deliver it. “Generation and transmission constraints across the country are already limiting the growth of AI and data centers,” said James Russell, principal at Charles River Associates.
He added that grid operators nationwide are working to expand transmission capacity to meet soaring energy needs — an effort unfolding on a scale “not seen in generations.” While AI facilities are the largest source of load growth, Russell said, other industrial projects are adding to the pressure on the power grid as well.