Nationwide average retail residential electricity prices are about 7% higher than last year and 32% higher than five years ago, according to Energy Department data. Surging prices are driven by an outdated transmission system, public policy, and rapidly growing demand from AI data centers. Limited transmission capacity creates congestion and forces use of higher-cost, less-efficient electricity. Data centers consumed roughly 4% of U.S. electricity in 2023 and could rise to 12% by 2028, while hotter summers, new manufacturing, electric vehicles, and broader electrification further increase demand and push costs upward.
Limited transmission capacity increases prices by creating "congestion," with overloaded power lines unable to carry more electricity because of overheating risks. That leads to using higher-cost, less-efficient electricity to meet demand. "It's like a two-way highway that was built decades ago that's now expected to carry rush-hour traffic to and from a major city every time - every day of the year [there are] more cars, bigger trucks, constant congestion,"
2. Data-center demand. Many analysts point to power-hungry AI data centers as a driver of rising rates, especially in data center hotspots. That's partly because of data centers' huge demand for energy. But it's because investments in new transmission lines and other gear are being passed on to customers. Data centers consumed about 4% of the nation's total electricity in 2023. The Energy Department estimates it could increase to 12% by 2028.
Collection
[
|
...
]