Redo Energy
← All posts

Rates · Data centers

Data centers are coming for your utility bill. Here is the actual math, and the hedge.

Published September 5, 2026 · 6 minute read

Every claim is linked. This piece is written for a homeowner deciding how to heat a house or whether to put panels on a roof in the next five years, not for anyone's culture war.

What just happened, in three numbers

Every year, the Pennsylvania-New Jersey-Maryland Interconnection (PJM), the regional grid operator for 13 states, DC, and 65 million people from Virginia to Illinois, holds an auction that pays power plants to promise they will be available when called. The price of that promise has a recent history worth staring at:

That is an eleven-fold increase in three years. PJM's independent market monitor attributes the bulk of it to one cause: data center load growth, which added $9.3 billion (a 174 percent increase) to capacity costs for the 2025/26 year alone. PJM's own long-term forecast projects 32 gigawatts of peak load growth by 2030, with 94 percent of it from data centers. Capacity costs land on retail bills. Washington DC's Pepco customers got about $10 a month added from the 2025/26 auction alone, and the Natural Resources Defense Council (NRDC) projects the average PJM household lands roughly $70 a month above pre-surge levels by 2028.

Retail prices are already moving. Between April 2021 and April 2026, average residential electricity prices rose 91 percent in DC, 70 percent in Maryland, 73 percent in Maine, and 59 percent in New York. Nationally, residential electricity rose about 5 percent in 2025, faster than inflation.

Not all regions are equal

Two complications: First, data centers are not the only cause, and in some places they have lowered rates. A careful study found that in the average state, rates from 2019 to 2024 would have been about 6 percent higher without the data centers built in that window, because a big new customer spreads fixed grid costs across more sales; North Dakota's residential rates actually fell.

That result needs three things to line up: spare capacity, cheap local generation, and a tariff that makes the data center pay its own way, which North Dakota had and most of the country no longer does, because the headroom of excess capacity that existed through 2024 is getting filled up. The Electric Power Research Institute (EPRI) study behind the 6 percent figure says as much itself, that the finding depends on the grid adding capacity affordably and on the demand actually showing up, so wherever a utility is announcing new gas plants for loads that have not arrived yet, expect the PJM result instead.

The viral claim that data centers raised bills 267 percent confuses wholesale price changes in Virginia with retail bills. The real number is bad enough without the fake one.

Second, the harm is concentrated, not national. If your utility is in PJM territory (Virginia, Maryland, DC, Delaware, New Jersey, Pennsylvania, Ohio, West Virginia, most of Illinois, parts of neighbors), in Georgia, or in a Southeast or Texas load pocket where the hyperscalers are building, this is your problem now. If you are in New England or the Pacific Northwest, it reaches you later and pre-diluted, mostly through regional wholesale markets and gas.

Don't forget about gas (and your heating bill)

The AI buildout is not only an electricity story. When grid interconnection queues run seven years, developers stop waiting and build their own gas plants. About 101 gigawatts of on-site gas generation has been announced by data center developers. Meta's Louisiana campus alone is being served by up to ten new gas plants totaling more than 7 gigawatts, funded through Entergy, and the local consumer advocate already projects Entergy bill increases from the buildout. In Memphis, xAI at one point ran roughly 35 gas turbines against a permit for 15, drawing an NAACP lawsuit over the air quality in South Memphis. It is now permitted for a permanent 1.2 gigawatt plant.

All of it burns the same fuel that heats 60 million American homes. Data center gas demand is projected to reach about 6.1 billion cubic feet per day by 2030, roughly a 20 percent increase in power-sector gas burn. Combined with liquefied natural gas (LNG) exports, the benchmark gas price tracked by the U.S. Energy Information Administration (EIA) has gone from $2.19 in 2024 to about $3.56 in 2025 to a forecast $4.01 in 2026, nearly doubling in two years, and residential heating bills are forecast 4 to 9 percent higher this winter.

So there isn't really an escape. Electricity is getting more expensive, but gas prices are suffering from the same pressures and seeing the same effects. Both fuel prices are being pulled upward by the same buildout. The question is not which fuel escapes datacenter demand pressure; neither does. The question is which one your equipment can use three times as efficiently. A furnace turns one unit of gas into at most one unit of heat. A heat pump turns one unit of electricity into about three.

Who's protected, and who's not

The policy map is moving fast. In the first six weeks of 2026, more than 300 data center bills were filed across 30-plus states, most aimed at making large energy loads pay their own way. Already law:

If your state is on that list, the worst of the cost-shifting is at least contested. If you are in a boom state without a large-load tariff, residential customers are the default backstop for billions in new grid spending, and the only fix runs through the public utility commission. Those dockets are public. Comments from actual ratepayers get read.

What a homeowner should actually do

Six moves, in order of certainty:

  1. Know your exposure. Look up whether your utility is in PJM or serves an announced data center cluster. Your rate trajectory for the next five years depends more on this than on anything OPEC does.
  2. Cut your demand first. Weatherization pays the same percentage no matter what rates do, and it pays more as they rise. Most states still fund it generously.
  3. If you heat with oil, propane, or electric resistance, electrify without hesitation. Those fuels lose to a heat pump by roughly 10 to 65 percent today, and no legislature anywhere is writing them a protective tariff.
  4. If you heat with gas in a rate-shock state, run the race honestly. Your gas price and your electric rate are both rising. Model the comparison with escalation on both sides instead of freezing today's prices, and check whether your utility offers a heating or dual-fuel electric rate, which changes the answer more than equipment choice does.
  5. Rooftop solar and batteries just became a rate hedge, not an eco statement. The federal residential credit died at the end of 2025. That hurts. But every percent your utility rate rises is a percent added to solar's return, and the PJM capacity numbers above are effectively a forecast of that return. Batteries increasingly earn extra through utility peak-shaving programs funded by exactly this crunch.
  6. Show up. Large-load tariff dockets are where the next decade of your bill is being decided. One page of public comment from a residential customer is rare enough that commissioners notice.

redo.energy calculators model your actual utility rate, your state's surviving rebates, and rate escalation scenarios, which in 2026 is no longer a detail. Run your address and see where you stand.

Every number above comes from the same data that runs the calculators. Run your own address, with your utility's actual rates and your state's current incentives.

Run your numbers