Rising electric bills are hitting households nationwide as AI data centers, LNG exports, heat waves, and grid costs drive power prices higher.
Over the past month, friends, family, and acquaintances have asked why their electricity bills have skyrocketed. One friend wrote, “I am curious if you have any thoughts about why electric bills are doubling and, in some cases, tripling? People in my area are in shock. In two months, my bill doubled.”
I live in Phoenix, and we actually have reasonable electric bills because we are served by the Palo Verde Generating Station. Despite the intense heat here, my electric bill never rises above $300 except in July. More on that later.
That’s not the case everywhere. From the Midwest to the Southeast, people are seeing bills that are several times higher than that. What’s driving these sudden spikes isn’t just “using more power” or “a hot summer.” The reality is more complex, and it won’t be easy to solve.
Here are the five biggest forces reshaping your electric bill.AI Data Centers Are Consuming Gigawatts
The surge in artificial intelligence has unleashed a gold rush in data center construction, and it’s quickly becoming one of the most powerful forces driving electricity demand. These facilities are energy-intensive, often consuming 30 times more electricity than traditional data centers. A single AI center can draw as much power as 80,000 homes, and by 2030, data centers are projected to require 30 GW of new capacity—the equivalent of 30 nuclear reactors.
To meet this demand, utilities are scrambling to add transmission lines and upgrade grid infrastructure, with those costs inevitably showing up on customer bills. At the same time, utilities that sell power into competitive markets—rather than operating under regulated rate caps—are seeing a windfall. Texas-based NRG Energy, for example, has seen its stock price triple in just two years, as soaring wholesale prices boosted profits.LNG Exports Are Pushing Up Fuel Costs
Natural gas powers about 40% of U.S. electricity generation, and U.S. liquefied natural gas (LNG) exports have risen by nearly a factor of seven in the past seven years to over 13 billion cubic feet per day.
That means when Asian or European buyers bid up LNG cargoes, U.S. households indirectly feel it in their electricity bills.
