Data centers, costly grid upgrades lead to high electricity bills in 2025

As we move into the hot summer months, the cost of staying cool keeps going up

Electricity costs are up nearly 5% from a year earlier, according to the Bureau of Labor

Statistics. That's on top of a 20% increase from 2019 to 2023. While rates have consistently gone

up over the last 15 years, that 20% is a large jump compared to most time frames

Like many commodities, electricity prices in America obey the laws of supply and demand

That demand has grown tremendously with new manufacturing centers and data centers

Each require massive amounts of energy. Meanwhile, supply has not kept up due to infrastructure and supply chain constraints

An energy economist at University of Houston that we spoke to says flawed market designs

tariffs, and rising natural gas prices all contribute to more expensive electricity

Some forecasts also show energy demand will only continue to skyrocket, with data centers for AI considered the driving force

The International Energy Agency says data centers will consume nearly half of all new electricity supply added to the grid in the next five years The most expensive average monthly electricity bills are in Hawaii The cost of

electricity is also high in New York and California, but their monthly bills are on average actually

lower than Texas and Florida. That's because of smaller homes and increased energy efficiency

And some in the industry suggest the way different states buy and sell electricity is complicating this issue further

For example, in Ohio, people can shop for different electricity plans from different providers

It's supposed to create more competition for utilities to offer the lowest rates

But it hasn't always worked that way. An energy economist and professor at Ohio State says utilities worried about spiking demand in extremely hot days are passing along the implied volatility of the market onto customers, driving up the prices

All that extra cost is being felt by consumers. A 2024 Lending Tree survey found 23% of Americans could not afford part or all of their utility bill

For Straight Arrow News, I'm Cara Rucker. For more unbiased, fact-driven news, download the SAN mobile app today