US utilities plot big rise in electricity rates as data centre demand booms

US power providers are seeking to impose big price increases on consumers following booming data centre demand, sparking debate over who should pay for the electricity burden of artificial intelligence.

Utilities have sought regulatory approval for $29bn in rate increases in the first half of 2025, a 142 per cent increase over the same period a year ago, according to a new report by PowerLines, an energy affordability advocacy group.

These increases highlight the question of whether surging electricity costs will be shared among all consumers, or charged directly to the large industrial users driving the new demand. Power consumption is expected to more than double in the next decade because of energy-intensive AI, according to BloombergNEF.

“What we’re . . . seeing is a deer-in-headlights dynamic,” said PowerLines executive director Charles Hua. “A lot of states don’t have a playbook for how they can meet rising [data centre] demand while balancing affordability and utility bills.”

Image courtesy of Financial Times