Electricity bills significantly increasing in some states with the most data centers

Electricity bills are significantly increasing in some states with the most data centers as tech companies and AI labs spread across the country.

In August, residential utility bills rose 6% on average nationwide, compared with the same period in the previous year, according to the U.S. Energy Information Administration, CNBC reported.

While the reasons for price increases are usually complex and vary by region, at least three states with high concentrations of data centers saw electric bills increase much faster than the national average during that period. For example, prices jumped up by 12% in Ohio, 13% in Virginia, and 16% in Illinois.

Data centers built by tech companies and AI labs consume a gigawatt or more of electricity in some cases, which is more than 800,000 homes.

Virginia has the highest concentration of data centers in the world, and Democrat Abigail Spanberger won the commonwealth's gubernatorial race after campaigning on the cost of living. She at least partially blamed the data centers for the rising electricity prices on data centers, promising to make tech companies “pay their own way and their fair share” of the increasing costs.

Ohio, Virginia, and Illinois are among the top five states with the most data centers, and they are mostly served by the same grid operator, PJM Interconnection. PJM is the largest grid in the U.S., serving more than 65 million people across 13 states.

To meet the electricity demand, PJM holds auctions to secure electric capacity from power plants to ensure the grid remains reliable. The auction for 2024 to 2025 resulted in a bill of $2.2 billion, and then jumped to $14.7 billion for 2025 to 2026.

A watchdog that monitors the auctions found that data center demand, actual and forecast, made up $9.3 billion, or 63% of the total power capacity bill for 2025 to 2026. In the most recent auction, prices increased to $16.1 billion.

Other states that are served by PJM but do not have as many data centers are being impacted by the price increases, as New Jersey has seen them jump about 20% year over year.