Why your electric bill is so high-and what could bring down rates

"In a Berkeley National Lab report published last year that looked at trends in electric rates from 2019 to 2024, researchers found that states that had the biggest growth in electricity demand-from customers like data centers-actually saw costs go down. That's because the electricity market isn't just about supply and demand; it's expensive to maintain equipment, and if costs can be spread out among more customers, everyone pays less."

"But that's starting to change as data centers use up the remaining room on the grid and start to need new power plants and other infrastructure. "We are seeing utilities run out of that spare capacity, and new investments will need to be made to accommodate for the growth," says Ryan Hledik, a principal at the economics consultancy Brattle Group, which worked on the Berkeley Lab report."

Electric bills have risen sharply across many states, with Bay Area PG&E bills up nearly 70% over five years and 2024–2025 showing double-digit increases in many regions. AI data centers get much attention, but initial demand growth sometimes lowered costs by spreading fixed maintenance expenses across more customers. That dynamic is shifting as data centers consume remaining spare capacity, prompting new power plants and grid investments. Recent analysis links higher energy costs to locations near data centers in some areas. Whether households face higher bills depends on how utilities price and allocate incremental costs to large customers.

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