PJM Interconnection, the grid operator serving 13 states and the District of Columbia from Illinois to Virginia, confirmed this summer that data centers were responsible for $6.3 billion of the added costs baked into its latest capacity auction — charges that will show up on household and business electric bills over the next three years. Since 2024, data center demand has added roughly $29 billion in total costs across the PJM region alone, according to Monitoring Analytics, the grid's independent market monitor, which also found that data center growth has pushed PJM's overall power supply costs up by more than 60 percent.
If you've noticed your utility bill creeping higher and assumed it was just inflation or an unusually hot summer, the AI buildout is now a documented part of the story. National residential electricity prices have climbed more than 36 percent since 2020, from 12.76 cents per kilowatt-hour to 17.44 cents in February 2026, and in ZIP codes with a heavy concentration of new data centers, prices have jumped as much as 267 percent over five years. This is no longer a niche utility-industry debate. It's showing up in checking accounts, and state governments have started passing laws in direct response.
The Numbers Behind the Price Hikes
A single AI data center can draw as much electricity as a mid-sized city, and unlike a factory that mostly runs weekday shifts, these facilities run at close to full load around the clock, every day of the year, to keep chips cool and models responding to queries. Utilities and grid operators plan capacity years in advance, and when demand from hyperscale campuses spikes faster than new power plants and transmission lines can be built, the shortfall gets priced into the capacity auctions that set what everyone on the grid pays — homeowners and small businesses included, not just the tech companies leasing server space.
Goldman Sachs analysts project the AI infrastructure buildout will add roughly 6 percent to electricity costs between 2026 and 2027, with another 3 percent increase layered on by 2028. Those are national averages; the regional picture is starker. In PJM territory specifically, capacity auction costs tied to data centers have compounded over three straight years, and Monitoring Analytics president Joe Bowring has said plainly that the added cost is being imposed on all customers in the PJM footprint, whether or not they've ever touched an AI chatbot.
| Metric | Figure | Source / Timeframe |
|---|---|---|
| National residential electricity price | 12.76¢/kWh (2020) → 17.44¢/kWh (Feb. 2026) | Up 36%+ in six years |
| Projected national price | 19.01¢/kWh by September 2027 | Industry rate projections |
| Price increase in data-center-heavy areas | Up to 267% | Over the past five years |
| PJM capacity auction costs tied to data centers | $6.3 billion | Added over the next three years |
| Total PJM data-center-driven costs since 2024 | ~$29 billion | Monitoring Analytics estimate |
| PJM power supply cost increase | 60%+ | Attributed to data center demand |
| Projected added cost from AI buildout | +6% (2026-27), +3% more by 2028 | Goldman Sachs |
| Americans concerned about data centers raising bills | 78% of adults surveyed | Consumer Reports, Nov. 2025 (n=2,146) |
Who Gets Hit Hardest
The pain isn't distributed evenly. PJM's footprint covers Pennsylvania, Ohio, Virginia, New Jersey, Illinois, Maryland and ten other states plus D.C., and Virginia's "Data Center Alley" in Loudoun County alone hosts one of the highest concentrations of hyperscale facilities on the planet. Households in and around those clusters are absorbing costs disproportionate to their own electricity use, because the transmission upgrades and new generation capacity needed to serve a handful of massive campuses get spread across the entire regional rate base. A retiree in rural Pennsylvania on a fixed income can end up subsidizing infrastructure built almost entirely to serve a data center campus she'll never see.
Small businesses face a similar squeeze, and one with less room to absorb it. A restaurant, laundromat, or manufacturing shop running on thin margins doesn't have the pricing power to pass a 10-15 percent jump in utility costs on to customers overnight, and unlike a tech company negotiating its own power purchase agreement, most small operators are stuck paying whatever rate the local utility sets.
States Are Starting to Fight Back
Two of the most consequential responses arrived within days of each other this summer. On July 14, 2026, New York Governor Kathy Hochul signed an executive order imposing the first statewide moratorium on new hyperscale data centers in the country — a one-year pause on discretionary environmental permits for facilities drawing 50 megawatts or more, explicitly citing New Yorkers' concerns about energy consumption, water use, and strain on public infrastructure. The order directs the state to use the pause to build what Hochul's office calls a "nation-leading regulatory framework" meant to keep ratepayers from footing the bill for transmission and infrastructure build-outs tied to the AI boom.
New Jersey took a different but related approach. On July 7, 2026, Governor Mikie Sherrill signed the Power NJ Act along with a package of related bills designed to make sure data centers, not residential customers, absorb the cost of the new generation capacity they require. Under the law, ratepayers won't bear any project costs for new nuclear or other generation facilities until they're actually completed and producing power, and won't be on the hook for construction cost overruns. The legislation also eliminates certain utility incentive structures that had been quietly padding electricity costs and requires large data centers to pay what the state calls their "fair share" of the grid upgrades they trigger. Sherrill's office estimated the broader package would save New Jersey ratepayers roughly $1 billion annually.
New York's order states the moratorium will "ensure New Yorkers are not paying for transmission and infrastructure build outs" tied to hyperscale data center growth.
Neither law slows down AI development nationally — companies can and will build in states with fewer restrictions — but both mark a turning point. For the first time, state governments are treating "who pays for the AI boom's power bill" as a consumer-protection issue rather than a private matter between utilities and tech companies.
What This Means If You're Not in a Data Center State
Even readers far from PJM territory or the Northeast aren't fully insulated. Regional grids are interconnected, capacity markets influence wholesale pricing beyond their own borders, and the same hyperscalers driving demand in Virginia and Ohio are simultaneously scouting sites in Texas, Georgia, Arizona, and the Midwest. The Consumer Reports survey showing 78 percent of Americans worried about data centers raising their bills wasn't limited to residents of states that already have data centers — it reflects a national anxiety that's arriving ahead of the actual infrastructure in many places. If your state hasn't seen a hyperscale campus announcement yet, that's often a matter of timing, not immunity.
How to Protect Your Household Budget
- Check whether your state has a rate case or capacity auction pending. Public utility commissions post filings online, and data-center-related rate requests are increasingly common; public comment periods are a real, if underused, way to weigh in before increases are approved.
- Ask your utility about time-of-use or off-peak rate plans. Data center demand is heaviest and steadiest, but household usage still has peaks; shifting laundry, dishwashing, and EV charging to off-peak hours can offset some of the base rate increase.
- Look into community solar or on-site solar with battery storage if your state allows net metering — locking in part of your usage outside the grid's capacity pricing reduces exposure to auction-driven spikes.
- Watch for demand-response programs. Several utilities in PJM territory now pay households a credit for allowing brief, automated reductions in usage during peak demand events, partially offsetting the higher baseline costs.
- Track your local elected officials' positions on data center siting. New York's and New Jersey's laws followed sustained public pressure; local zoning and permitting fights are where these decisions actually get made.
What Happens Next
More states are expected to introduce similar legislation before year-end, and the outcome of New York's one-year pause will likely become the template regulators elsewhere study first. Data center developers, for their part, are increasingly offering to fund their own dedicated generation and transmission upgrades to avoid the political backlash and the permitting delays that moratoriums like New York's create — a trend worth watching, since it could shift more of the true cost of the AI boom onto the companies actually profiting from it rather than onto ratepayers. Until that shift is complete, though, the math in the table above is the reality most electricity customers are living with right now.