US utilities are planning to spend a record $1.4 trillion on the power grid to keep up with the demands of power-hungry data centers – and the investment could hike electricity bills even higher for Americans, according to a new study.
Some 51 investor-owned utilities are planning the spending spree on the country’s aging power grid over the next five years, according to a new report from PowerLines, a consumer education nonprofit.
The investment marks a massive 20% jump from what utility companies were planning to spend last year on power plants, transmission lines and distribution poles and wires, according to PowerLines.
“There is a tremendous amount of pressure on the US electrical grid,” Charles Hua, the organization’s founder and executive director, told The Post.
Data centers – some of which can burn through as much energy as the entire nation of Ireland – have for the first time increased nationwide electricity demand after decades of staying flat, according to Hua.
Utility bills have already gone up about 40% since 2021, with no signs of slowing down, according to PowerLines data.
Nearly 80 million Americans say they are struggling to pay their utility bills – forgoing necessities like food and health care to keep the lights on at home, according to the nonprofit.
“Forty percent price increases in the last five years. I think that’s totally on the table that that could happen again over the next five years,” Hua said.
“And the amount of spending that’s occurring is only larger, so who knows? It could be even higher,” he added.
However, higher planned capital expenditures are not a guarantee that utility rates are going to increase.
Many of the plans still need state regulators’ approval to move ahead, so the full $1.4 trillion investment might not come to fruition.
Data centers can theoretically help lower utility bills by spreading fixed costs – like expensive repairs to an outdated grid – across more demand, according to Mike Partin, president of the National Rural Electric Cooperative Association, a trade group representing more than 900 utilities.
Data centers can also drive jobs, tax revenue and economic development in rural areas – but if demand for AI products does not pay off as expected, consumers could be left on the hook to subsidize Big Tech, Partin added.
Electricity costs are outpacing inflation, rising 4.6% in March over the past year – above the general inflation rate of 3.3%, according to the Bureau of Labor Statistics.
Along with an influx of demand from AI data centers, the grid is struggling to keep up with new manufacturing and the growing number of electric vehicles. Inflation has driven the cost of materials higher and made it more expensive to repair damages from storms and fires.
Nominal residential electricity prices soared 33% between 2019 and 2024, though they mostly tracked inflation — rising 6% in real dollars, according to an April study by Lawrence Berkeley National Laboratory.
Between 2021 and 2025, regulators approved 64% of utility spending requests, the analysis found.
In 2025 alone, utilities requested a whopping $31 billion in rate increases – more than at any point since the mid-1980s, according to PowerLines.
In a Truth Social post earlier this year, President Trump said that while data centers are important, they must “pay their own way” for electricity.
In March, seven top tech firms – Google, Microsoft, Meta, Oracle, xAI, OpenAI and Amazon – signed a voluntary “ratepayer protection pledge” led by Trump.
“It’s more of a pledge, and a lot of the implementation has to come down to the state level … shielding consumers from additional cost increases,” Hua told The Post.
Regulators would need to crack down on utility companies raising their capital expenditure costs while leaving operational expenses alone, a technicality meant to protect profits, he said.
Alternatively, utility firms would need to lower their planned expenditures – and a $1.4 trillion package isn’t a great sign, he added.
