The AI Boom Is Already Showing Up On Your Electric Bill

Your electric bill went up because OpenAI wants ten gigawatts. The two are not connected by accident. They are connected by physics, regulation, and a paper trail that runs through every regional grid operator in America.

Start with the number. The US national average residential rate climbed from 14.92 cents per kilowatt-hour in 2022 to 18.05 cents in March 2026. That is a 21 percent jump in five years. The annual sequence reads like a ladder: up 6.2 percent in 2023, up 4.9 percent in 2024, up 3.0 percent in 2025, and up another 5.4 percent through early 2026. Virginia residential rates went up 26.3 percent year over year. Ohio went up 21.9 percent. Pennsylvania went up 19.5 percent. Washington DC went up 33.3 percent in a single twelve-month stretch. In 2025 alone, state regulators across the country approved 43 separate rate hikes totaling 11.6 billion dollars in new charges that landed on residential meters. The EIA Electricity Monthly Update documents the climb in plain dollars. The NEADA Energy Price Update breaks it down by state.

The bill went up because the grid is buckling under data center load. Not eventually. Right now. The Lawrence Berkeley National Laboratory's 2024 report put US data center consumption at 4.4 percent of total US electricity in 2023, up from 1.9 percent in 2018. The same report forecasts 6.7 to 12 percent by 2028. The growth rate jumped from 7 percent annual (2014 to 2018) to 18 percent annual (2018 to 2023), and Berkeley projects 13 to 27 percent annual through 2028. The grid was not built for this. The grid is being asked to absorb it anyway.

How The Auction Math Worked

PJM Interconnection runs the largest electricity market in the United States. Thirteen states plus DC. Sixty-five million customers. PJM runs an annual capacity auction that determines how much electricity generators get paid to be available three years in the future. That auction price flows directly into residential bills.

The 2024 to 2025 auction cleared at 28.92 dollars per megawatt-day. The next year, the 2025 to 2026 auction, the price cleared at 269.92 dollars per megawatt-day for most of the footprint. That is 833 percent higher. Total auction cost: 14.7 billion dollars, against 2.2 billion the prior year. The Baltimore Gas and Electric zone cleared at 466.35 dollars per megawatt-day. The Dominion zone in Virginia, the data center heartland, cleared at 444.26 dollars per megawatt-day.

The next auction was worse. PJM's 2026 to 2027 base residual auction cleared at 329.17 dollars per megawatt-day across the entire footprint, hitting the FERC-approved cap. The auction after that, the 2027 to 2028 auction in December 2025, cleared at 333.44 dollars per megawatt-day, hitting the cap again. Three consecutive auctions at or above the price ceiling. The 2027 to 2028 auction cleared 6,623 megawatts short of the reliability requirement. The grid bid for more generation. The market could not deliver it.

Without the pricing collar that Pennsylvania governor Josh Shapiro negotiated with FERC, the 2027 to 2028 clearing price would have been roughly 530 dollars per megawatt-day. Sixty percent higher than what cleared. PJM said so in its own filing. The collar was the only thing keeping the bill from going up faster than it already did. Approximately 5,100 megawatts of the 2027 to 2028 forecast peak load increase comes directly from data center demand. That figure is also from PJM's own filing. The capacity market is not a guess. It is a published auction. The auction cleared at the ceiling three times in a row.

What The Plants Tell You

Microsoft signed a 20-year power purchase agreement with Constellation Energy in September 2024 to restart Three Mile Island Unit 1. Cost: 1.6 billion dollars. Capacity: 835 megawatts. Target online date: 2027 or 2028. The plant has been closed since 2019. Constellation is restarting it for one customer. That customer is Microsoft. The plant was renamed the Crane Clean Energy Center after the late Chris Crane. The PPA is in writing. Constellation will request operating authorization through 2054.

NextEra and Google signed a 25-year PPA on October 27, 2025 to restart the 615 megawatt Duane Arnold Energy Center in Palo, Iowa. The plant has been closed since 2020. Google needs the power for AI workloads in the Midwest. NextEra projects 16 cents of EPS contribution annually for the first decade. The 8-K is filed. Target restart: late 2028 or early 2029.

The grid is not adding nuclear capacity. The grid is restarting plants that were shut down because they were uneconomical. Coal is the same picture in reverse. According to a December 2025 DeSmog investigation, at least 15 US coal plants postponed their retirement after January 2025. The Bowen Steam Plant in Georgia. The Scherer Plant in Georgia. The J.H. Campbell plant in Michigan, 1.5 gigawatts, where the DOE has extended emergency operation twice. The Victor J. Daniel plant in Mississippi, 600 megawatts purchased by Georgia Power. The Craig Station and Comanche Generating Station in Colorado. FirstEnergy abandoned its 2030 coal-exit plan entirely. Microsoft formally intervened on Georgia Power's side in the Georgia Public Service Commission coal-retention proceeding. AEP told investors on its Q1 2025 earnings call that it expects 15 gigawatts of new load from Amazon and Google data centers in Ohio and Texas alone.

What The Bill Buys

Texas tells the most direct version of the story. ERCOT's large load interconnection queue reached 226 gigawatts by November 2025, up from 63 gigawatts in December 2024. A 300 percent increase in a single year. Data centers account for approximately 73 percent of that queue. Only 1.8 percent of it, about 4,965 megawatts, is currently operational. The grid is being asked to accommodate something it does not yet exist to serve. The Texas legislature passed Senate Bill 6, which forces every data center connecting after December 31, 2025 to accept a remote kill switch the grid operator can flip during firm load shed events, and to maintain on-site backup generation capable of serving 50 percent of demand. The bill landed because the grid operator publicly admitted it could not keep up.

Virginia is the same picture written in fiber. Dominion Energy serves 451 data centers. Contracted data center capacity in the Dominion service territory grew from 21 gigawatts in July 2024 to 40 gigawatts by December 2024. An 88 percent jump in six months. Dominion's 2025 to 2029 capex plan was revised from 43.2 billion dollars to 50.1 billion. The Virginia State Corporation Commission approved a new GS-5 rate class in November 2025, effective January 2027, specifically to charge data centers more than households. The Virginia JLARC independent study projected a typical Dominion residential customer could see generation and transmission costs rise 14 to 37 dollars per month by 2040 in constant dollars, even with the new rate class in place. Virginia energy demand is forecast to rise 183 percent between 2023 and 2040.

The grid does not need this. The hardware to run inference workloads already exists in 7.3 billion smartphones, 270 million PCs shipped in 2025 alone, and a billion gaming consoles. The electricity to run that hardware already flows. The cooling is handled by air conditioning that is already paid for. The infrastructure to coordinate it has been published in peer-reviewed papers since 2022. The grid is being asked to build a second copy of computing capacity that already exists, on a timeline the grid cannot meet, paid for by households who do not use the workload.

The capacity auction cleared at the ceiling three times in a row. The residential rate climbed 21 percent in five years. Two retired nuclear plants are coming back online for two corporate customers. Fifteen coal plants are staying open. The PJM filing is public. The SCC order is on file. The 8-K is published. The bill comes every month, and it goes up every year, because the grid is paying for a buildout that does not have to happen on the grid at all.