A\u00a0Bloomberg News analysis\u00a0found that areas near data centers saw an increase in electricity costs of as much as 267% compared to five years ago.<\/p>\n
Published Oct 17, 2025 3:35 PM EDT\t\t\t\t\t<\/p>\n
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Updated Oct 17, 2025 3:35 PM EDT\n\t\t<\/p>\n
\n\tElectrical wires in Commerce, California, in August. The average price of electricity in America has increased 13% since 2022, according to the US Energy Information Administration. (Photo Credit: Mike Blake\/Reuters via CNN Newsource)\n<\/p>\n
\n\t(CNN) \u2014\u00a0Lindsey Martin\u2019s electricity bill reached $314 in July, the highest bill she had received this year until that point, she said on TikTok. In the video\u2019s more than 4,000 comments, many users reported similar power-bill spikes.\n<\/p>\n
\n\tMartin\u2019s bill jumped even higher in August to $372, a notable leap from around $150 two to three years ago.\n<\/p>\n
\n\t\u201cI thought that was so high, I could not believe my bill was $150,\u201d Martin, a Kentucky-based registered nurse, told CNN over the phone. \u201cAnd now I wish my bill was $150.\u201d\n<\/p>\n
\n\tMartin isn\u2019t alone. Residential electricity costs are on the rise, according to\u00a0data<\/a>\u00a0from the US Energy Information Administration (EIA). The average price of electricity in America has increased 13% since 2022, with the cost of retail electricity expected to grow faster than the rate of inflation, the report says. Some regions, like the Pacific, Middle Atlantic and New England, could see even higher increases than the national average.\n<\/p>\n \n\tThe increases have largely been driven by the costs of updating and maintaining the power grid and other necessary infrastructure, particularly in the face of increasingly common severe weather events, according to experts on energy and computing who spoke with CNN.\n<\/p>\n \n\tBut a new technological wave is also driving up electricity bills: The AI boom is boosting electricity demand and power resources as tech giants pour billions into what many believe is the biggest computing shift in decades. OpenAI and Broadcom announced\u00a0a partnership<\/a>\u00a0just this week to design and develop 10 gigawatts of custom AI chips and systems, more than enough to power a major city.\n<\/p>\n \n\tThat trend is only expected to continue. Data centers are projected to consume approximately 6.7% to 12% of US electricity in 2028, up from 4.4% in 2023, according to a December 2024 report from the\u00a0Department of Energy<\/a>. A\u00a0Bloomberg News analysis<\/a>\u00a0found that areas near data centers saw an increase in electricity costs of as much as 267% compared to five years ago.\n<\/p>\n \n\tThe power industry just isn\u2019t equipped to keep up, said Bob Johnson, an analyst with market research firm Gartner who follows the semiconductor industry.\n<\/p>\n \n\tInvestment in data centers has moved fast as tech behemoths stake the future of their businesses on AI. Meta said it spent $17 billion in capital expenditures, which typically refers to money spent on data centers and infrastructure, for the quarter that ended in June, while Microsoft said it spent $24.2 billion. Data center construction spending reached\u00a0a high of $40 billion<\/a>\u00a0in June, according to a Bank of America Institute report.\n<\/p>\n \n\tExisting data centers likely need to be updated to ensure they have enough capacity to handle new power-hungry AI services and products.\n<\/p>\n \n\tThat growth is contributing to more electricity demand than the United States has seen in two decades, leading to a need for more investment in electricity generation and transmission, said Rich Powell, CEO of the Clean Energy Buyers Association, a trade group that represents electricity buyers.\n<\/p>\n \n\tOther factors behind the increased demand include a shift to electric-based heating systems in homes and new manufacturing plants, according to the Bank of America report.\n<\/p>\n \n\tThere weren\u2019t enough data center construction and upgrades in the past to affect consumer prices, said Ram Rajagopal, senior fellow for Stanford University\u2019s Precourt Institute for Energy. But now the AI industry is seeing an \u201cexplosion in demand.\u201d\n<\/p>\n \n\tAI tools are also growing increasingly sophisticated, evolving beyond text-based queries to handle complex tasks like generating realistic video clips in a matter of seconds and coding websites from scratch. This means they also require more resources than ever.\n<\/p>\n \n\t\u201cAI is really computationally intensive,\u201d said Shaolei Ren, an associate professor of electrical and computer engineering at the University of California, Riverside.\n<\/p>\n \n\tRates vary by location, but retail electricity prices generally include the \u201ccost of generating, transmitting and delivering\u201d electricity and can sometimes factor in investment in upgrading infrastructure, according to the EIA.\n<\/p>\n \n\tLarge buyers of electricity typically pay lower rates because the distribution infrastructure is less complex; power needs to be piped to one location rather than hundreds or thousands of homes, said Johnson. Pricing models haven\u2019t been updated to take into account the surge in data center growth, he said, although that can vary by location.\n<\/p>\n