WASHINGTON — A study by the Jack Kemp Foundation warns that U.S. energy bills could increase by 25% to 70% over the next decade without policy intervention, driven by soaring demand from AI technologies, hyperscale data centers, and the shift toward electrification. The report, authored by economists Ike Brannon and Sam Wolf, highlights the strain on the nation’s power grid as capacity dwindles, leading to higher market prices and potential risks of outages.
The Mid-Atlantic regional transmission organization PJM reported capacity prices rising from $29 to $270 per megawatt-day across its region and up to $444 in parts of Virginia, home to over half of the nation’s data centers. Dominion Energy spokesperson Aaron Ruby contested the report’s projections, citing a forecast of only 2.5% annual bill growth in Virginia.
The study suggests policymakers should require data centers to bear a greater share of energy costs, discourage subsidies for their construction, and implement measures like minimum take clauses in utility contracts. It also emphasizes the need for modernizing the power grid while cautioning that price increases may eventually affect consumers if demand continues to outpace capacity.