Electric Bills in US Set to Rise as Utility Requests for Rate Hikes Double
(Bloomberg) -- US electric companies have asked for $29 billion in rate increases so far this year, more than double their requests for the first half of 2024, according to a new report from energy affordability advocacy group PowerLines.
The rise is driven by the costs of replacing aging infrastructure and powering data centers for AI.
“Utilities are responding to new load by proposing new power plants that generally drive up customer bills,” PowerLines executive director Charles Hua said in an interview.
Ambitious efforts by tech firms to build massive data centers to develop artificial intelligence have collided with customer anger over rising bills, sparking conflict over who pays for grid improvements. Stress on the US power grid has increased in recent years, with power demand booming because of the expansion of data centers, new factories and overall electrification.
Utilities request rate increases from state regulators, who decide how much the companies can charge their customers and the rate of return the companies earn on their spending.
The requested rate increases come as coal and natural gas plants are being retired, with not enough replacement sources being built. US President Donald Trump is seeking to slow those fossil-fuel closures while ending tax incentives for wind power and also for solar, the cheapest domestic electric source.
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