Do Data Centers Raise Your Electric Bill? What the Evidence Says

In some regions, yes. On the PJM grid in the Mid-Atlantic and Midwest, the market's independent monitor attributes billions of dollars in power-market costs to data center demand. Part of that reaches retail bills. Nationally the evidence is mixed. Through 2025, states with fast-growing electricity demand generally saw inflation-adjusted average prices fall. The result depends on how much spare capacity the grid has and how regulators divide costs.

Where is the evidence strongest that data centers raise bills?

PJM Interconnection runs the grid for about 67 million people in 13 states and Washington, D.C., The Hill reported. It holds capacity auctions, which pay power plants to be available in future years. Those charges feed into retail rates, though customers of utilities that own power plants are partly shielded.

Monitoring Analytics is PJM's independent market monitor. It calculated in July 2026 that data center demand accounted for $6.3 billion of the capacity charges from the auction for the 2028/2029 delivery year. The monitor put that at 38.2% of the $16.4 billion total. Across the last four auctions it put the data center share at $29.4 billion, or 46.2% of all capacity charges.

In a September 2026 report, the monitor said wholesale power in PJM cost $112.51 per megawatt-hour in the first eight months of 2026. It said the cost would have been $102.41 without the effect of data center demand on the capacity market. The $10.10 difference is about 9% of the total. The same report said not all of the increase in capacity costs came from data centers. It said energy costs, the largest component, rose 45% from a year earlier.

These are the monitor's own estimates. The Berkeley Lab analysis below says PJM capacity prices rose for several reasons. It says those include market-rule changes as well as demand growth.

What does the national data show?

A Lawrence Berkeley National Laboratory and Brattle Group analysis is dated April 2026. It found that average U.S. retail electricity prices rose 5.3% in 2025, or 2.6% after inflation.

From 2019 to 2025, it found, states with the fastest demand growth generally saw real average prices decline. The reason it gave is that the fixed costs of the grid were spread over more sales. The authors attached two cautions. First, the pattern is less clear for residential prices than for the all-customer average. Second, it may not hold as growth accelerates.

Other forces also raised bills. Natural gas delivered to power plants cost 36% more in 2025 than at its all-time low in 2024, the study said. In PJM, it called capacity prices a significant contributor. There, 2025 retail prices rose 3.1 cents per kilowatt-hour in Washington, D.C., and 2.0 cents in New Jersey.

The U.S. Energy Information Administration's October 2026 outlook forecasts an average residential price of 18.2 cents per kilowatt-hour for 2026. That is up from 17.3 cents in 2025.

Who pays for the new power plants and power lines?

That depends on cost allocation, the rules regulators use to assign grid costs to customer groups.

In Virginia, the state's Joint Legislative Audit and Review Commission addressed the question in a December 2024 study. It found that data centers were paying their full cost of service under existing rates. But it found that their growth would likely raise costs for other customers, because new generation and transmission must be built.

The commission estimated that a typical residential customer of Dominion Energy could pay $14 to $37 more per month by 2040 for generation and transmission. That estimate is in inflation-adjusted dollars. The commission also warned that customers could be left paying for infrastructure built for demand that never arrives.

Some utilities project the opposite. The Berkeley Lab study lists several such estimates. One is an Indiana utility's figure of $7 to $9 a month in residential savings from 2032 under a contract with Amazon. The study cautions that positive outcomes are not assured.

What are regulators doing about it?

• Large-load tariffs. Utilities and state commissions are adopting special rate terms for very large customers, the Berkeley Lab study notes. It says the terms include minimum contract lengths, collateral and exit fees.
• State laws. Florida's SB 484 was signed on May 7, 2026, according to the governor's office. The office says the law bars utilities from passing data center costs on to residential and small-business customers.
• Market rules. PJM's market monitor wants data center demand procured through a separate auction so that data centers pay for their own capacity. On September 29, 2026, the Federal Energy Regulatory Commission acted on a PJM plan for a one-time backstop purchase of up to about 6.8 gigawatts of new capacity. It accepted but suspended the plan until February 28, 2027, pending further proceedings on cost allocation and other issues. PJM then delayed the auction, Utility Dive reported.

The bottom line

By the market monitor's accounting, data centers have raised power-market costs in PJM. Customers there are paying part of it. Elsewhere, the state-level record through 2025 does not show demand growth raising average prices. The picture for household rates is less clear, though. The researchers also warn that the past may not predict what faster growth brings.

Open questions as of early October 2026 include:

• the delayed PJM procurement
• how states write large-load tariffs
• whether the data centers in utility forecasts are built