Which states may see higher electric bills next year because of data centers?

Residents in a significant number of states could see noticeable increases in their electricity bills next year, and data centers are the likely culprit. PJM Interconnection just closed its annual capacity auction, which determines what wholesale electricity will cost for the following year. Wholesale electricity capacity prices were up 22 percent over last year.

PJM’s territory covers all or parts of Delaware, Indiana, Illinois, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Washington, D.C. This includes the world’s largest concentration of data centers, Data Center Alley in Northern Virginia. PJM pointed to data center expansion as the main driver for the significant increase in prices.

The energy industry considers PJM’s auction as a bellwether for prices in the entire U.S., so it wouldn’t be surprising if prices from other providers also see significant increases. Electricity demand in the U.S. has been fairly stagnant over the last decade, but the Bank of America Institute expects it to increase 2.5 percent annually over the next 10 years. The energy-hungry data centers powering artificial intelligence are considered the main culprit.