America's Got A Power Problem
Hello friends,
Here in DC, the last days of summer have seen near-perfect weather, and the first evenings with a chill in the air. As we look to fall, many Americans start thinking about winter’s higher electricity bills (although with climate change, many have too-high summer bills, too). This year, America’s power grid is under strain. Big tech’s data centers and AI are gobbling up power faster than it can be built, while long-standing grid infrastructure needs to be upgraded and shifted to clean, cheaper power sources. This mismatch is leading to higher electricity costs. While President Trump has been advocating for Big Tech to have more power while denouncing the cheapest new sources of electricity, the common thread is that American households will be left holding the bill.
Read on—just one chart, 698 words, and one musical interlude
Chart of the Week: PJM Interconnection is the largest power grid operator in the country, serving over 65 million customers across 13 states from the Midwest to the Mid-Atlantic. Capacity costs—essentially the cost of keeping power on standby—have jumped to a record $16.1 billion for 2026, and the company has warned consumers that their electricity bills could increase by up to 5%.
Big Data, Not Enough Electrons
Computers need more power. Between the data centers to the models that run artificial intelligence (AI), power demand is up. In the United States, an average 100-megawatt data center uses more power than 75,000 households altogether. As tech companies look to innovate and scale AI models, data centers are expected to consume up to 12% of total US electricity by 2028.
In January 2025, President Trump signed an executive order “removing barriers” to US leadership in AI. But beyond the nod to tech barons who gave millions in contributions to his inauguration fund, there’s no real policy. Now, we’re in a full-scale electricity grid crisis.
Meta, for example, will spend most of this year’s $65 billion in capital expenditures on building and expanding AI data centers—the warehouse-size buildings that provide the computing power fueling Meta’s AI products and algorithms across its apps.
America’s power plants don’t have enough power to meet this demand and need significant investments in grid infrastructure to replace old components and implement advanced technologies. Somebody has to pay for that; with the way things are now, utility companies are passing those costs directly onto consumers.
New analysis from Carnegie Mellon projects that electricity bills are on track to rise an average of 8% nationwide by 2030 and up to 25% in places like Virginia.
The squeeze is uneven: Big tech companies can pay for their own transmission upgrades and utilities know that if they allow the access, big tech will use the power. Meanwhile, manufacturers and other start-ups are increasingly blocked from being able to get enough power.
President Trump promised to slash electricity costs by 50% within his first 12 months in office, but his actions aren’t delivering.
The commitment to the tech companies who profit the most in the AI age is driving up monthly electricity prices and shutting small businesses out of the grid while his war on the cheapest sources of new power—wind and solar—sidelines our best, most cost-effective ways out of the crisis.
In 2024, over 90% of new energy capacity in the US was clean. But the Republican budget bill slashed technology-neutral clean energy tax credits and added complex sourcing requirements, so far resulting in over $14 billion in canceled or delayed clean energy investments. This will cause households to face an average annual increase of $130 in household energy bills by 2030, and $170 by 2035.
Whichever forecast you pay attention to, or policy you look at, Trump’s agenda means higher costs for American households.
Global competition, local effects
Virginia: Google announced a facility in Chesterfield—that will use up to 100 times more electricity per square foot than a typical office building—as a part of their $9 billion to expand the state’s AI and cloud storage by 2026. Dubbed "data center alley," demand for power in Virginia is expected to double in the next ten years if unconstrained.
New Jersey: Residential customers’ utility bills in New Jersey have jumped 17-20% this summer. PSE&G, a public utility holding company headquartered in the state, warned that the increase in energy demand and new power generation needs will drive supply prices even higher.
Indiana: AES Indiana, a utility company providing electricity to Indianapolis, proposed a rate hike of $21 per month on consumers. From an Amazon facility in northern Indiana, to a $2 billion Google facility in Fort Wayne, the state’s grid is now tasked with equipping 72 facilities—up 30% since March.
Big Tech is facing off with local communities, and Trump is committed to leaving the game unrefereed. With the unlimited bargaining power of megacompanies and utility companies stripped of clean-energy alternatives, American families will be the ones left struggling to keep cool—literally.
I hope you have a wonderful weekend and have the chance to celebrate American workers on Labor Day!
Best,
Heather