The average American’s skyrocketing electric bill has caught the attention of everyone from President Donald Trump to Microsoft executives — just don’t expect lower rates in 2026.
Electric and gas utilities asked state regulators to approve $31 billion in rate increases last year, more than double the $15 billion they sought in 2024, a new study from PowerLines, a nonprofit that advocates for utility customers, found.
The surge in requests from utilities to tack on additional charges to customer bills comes as Big Tech companies continue their sweeping buildout of power-hungry AI data centers across the country. Many utilities have attributed rate increases to unprecedented demand from data centers.
While some of those requests are still pending approval, many — including the majority of a $9 billion increase for customers of one Florida power company — have been pushed through and will start showing up on customer bills this year.
“Gas and electricity are the two fastest drivers of inflation, and not by a little bit more. It’s significantly more than what we’re used to seeing,” said Charles Hua, founder and executive director of PowerLines.
To track rate hikes, PowerLines used publicly available data from investor-owned utilities in the US.
Customers in southern states were hit hardest by rate-hike requests last year, PowerLines found. Utilities in the region sought approval for more than $14 billion in rate increases. Much of that came from Florida Power and Light’s $9 billion rate hike request — nearly all of which regulators approved.
FPL cited population growth and extreme weather events as key factors in its decision to raise rates by such a significant amount.
In Virginia, residential customers of Dominion Energy, which also delivers power to the world’s largest data center hub, will see their bills increase by an average of $13.60 by 2027.
Investor-owned utilities in the US are on track to spend $1.1 trillion on a massive expansion of the power grid between 2025 and 2029, according to the Edison Electric Institute, a powerful industry lobbying group. It has cited data centers and AI as key drivers of utility spending.
The majority of residential ratepayers in the US are customers of investor-owned utilities like NextEra Energy, Duke Energy, and Southern Company. These large, publicly traded companies turn a profit for shareholders by recovering the costs of constructing new power plants and lines, plus interest, from their customer bases.
Big Tech’s power usage faces growing backlash
Big Tech and its enormous appetite for power are facing growing public backlash.
Earlier this month, Microsoft said it would be a “good neighbor” and “pay its own way” for the electricity it uses as it scales its AI data center fleet.
In a Truth Social post preceding Microsoft’s announcement, Trump said his administration will work with tech companies to ensure their data center electricity consumption won’t drive up bills for everyone else.
“I never want Americans to pay higher electricity bills because of data centers,” Trump said in the post.
Power demand forecasts
Some power grid researchers are skeptical of the forecast demand. They have warned that utilities risk overbuilding new power plants and transmission lines that will have to be paid for but ultimately won’t be needed.
Hua is pushing regulators to take a closer look at forecast power demand from utilities, which stand to profit from building new infrastructure that could lead to rate hikes. Steering utilities to first consider the latest electric grid-enhancing technologies before building new power plants to serve data centers could also help lower customer electric bills, Hua said.
“Utilities don’t profit on making the grid more efficient. They are constantly trying to build new infrastructure. That’s their job,” said Hua. “This moment is the perfect justification.”