The proliferation of large-scale computing facilities used for artificial intelligence and cloud services is projected to increase U.S. electricity consumption to record highs, according to energy experts. Earlier this year, the New Jersey Board of Public Utilities warned that residential electricity bills could rise by up to 20% starting June 1, identifying data centers as a primary driver. Mark Wolfe, executive director of the National Energy Assistance Directors Association, stated that utilities are raising rates to fund new infrastructure necessitated by the technology sector's growing energy needs.
The number of domestic data centers nearly doubled between 2021 and 2024, according to a report from Environment America. These facilities, which house thousands of computer servers and cooling systems, accounted for 4.4% of U.S. electricity use in 2023. A December 2024 Department of Energy (DOE) estimate projected this figure could reach 12% by 2028. Generative AI technology contributes to this demand; the Electric Power Research Institute found that AI searches require 10 times more electricity than standard internet searches.
Utilities are currently adjusting their long-term pricing and infrastructure plans. In April, Dominion Energy in Virginia proposed a monthly price increase of $8.51 for 2026 and suggested a separate rate class for high-energy users like data centers. While PG&E suggests that higher grid utilization could eventually lower rates, other analysts point to the high cost of new transmission lines and power plants. According to Labor Department data, national electricity prices rose 4.5% over the year preceding November 2025.
Individual households may notice these changes through higher monthly utility bills and potential impacts on grid reliability. North American Electric Reliability Corp reported that facilities servicing AI companies are being developed faster than the power plants and transmission lines to support them, which may lead to lower system stability. In some regions, winter heating bills for those using electricity are expected to rise to $1,205 this season, a 10% increase from the previous year.
Policy changes could further shift these costs. Analysts from Rhodium Group projected that a Republican-backed budget package could increase a family’s annual energy expenditures by nearly $400 by repealing existing tax credits. Conversely, governors-elect in New Jersey and Virginia have promised to protect residents from data center-driven price hikes. Moving forward, the International Energy Agency expects worldwide electricity demand from data centers to more than double by 2030, which will continue to pressure state regulators to decide how infrastructure costs are distributed.