Data Centers sparking rate increase

Data centers in PJM, the largest U.S. regional power grid that serves customers from New York to Chicago, are adding billions of dollars to ratepayers' electricity bills and increasing the odds of potential power shortages, a new analysis shows.

Projected electricity demand from the rise of artificial intelligence is rippling across U.S. power grids. A report by Monitoring Analytics, the independent market monitor for Eastern grid operator PJM Interconnection, estimated that current and planned peak power will add nearly 12,000 megawatts to the expected peak power demand next summer.

Added Power demand drove up PJM's July capacity auction by $7.2 billion, an 82 percent increase over the previous auction.

The Natural Resources Defense Council projected this week that PJM consumers could see an increase of utility bills of up to $163 billion through 2033 because of the steady growth in data center power demand. According to the report, "By 2028, an average family in the region will be paying around $70 a month extra on their electricity bills because of forecasted data center growth.

Natural Gas prices to double

Another dynamic that will likely push electric bills even higher is the rising cost of natural gas. US Government forecasts put natural gas near $4/million btu in 2025 and $4.90 in 2026—more than double 2024's $2.20 average. These price increases will flow directly to electric rates.

Natural gas prices are rising due to increasing global demand, driven by high LNG exports to Asia and Europe, and strong domestic consumption for electricity and data centers. This surge in demand is outpacing supply growth, leading to lower natural gas storage levels.

Currently natural gas is the fuel source for about 40 percent of all US electrical generation. It is estimated that a doubling of the cost of gas will add between 3 to 6 cents per kWh to most residential electric bills.

DOE pulls funding on 200 energy projects

The U.S. Dept. of Energy (DOE) announced the termination of 321 financial awards supporting 223 energy projects for a total of $7.56 billion.

Analysts have noted that these cancellations appear to be politically motivated, as all the projects that were defunded were in states that voted for former Vice President Kamala Harris in the 2024 election. The projects are in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Vermont and Washington .

Democratic lawmakers and consumer advocates said the DOE's funding cancellation is illegal, and an example of a presidential administration executing a political vendetta that will hurt all Americans.

Shutdown could impact energy sector construction

Contractors across the country are anticipating that the government shutdown that went into effect last Wednesday will have a lasting impact on energy construction projects already underway. 

The stoppage will freeze construction activity immediately on federal sites, both temporarily and in some cases permanently.

In the electric utility sector, the shutdown could also affect state-run energy programs that are funded through appropriations, including energy efficiency programs, utility assistance for low-income households and revolving energy funds. It could also slow or halt the approval and oversight process for new energy infrastructure that may not be directly funded by the federal government.

Though money could be technically in place, a shutdown could still sideline contracting officers and other oversight staff. That could leave projects stuck in neutral.

Being in a state of limbo would have immediate effects on contracts and supply chains. Prices are locked in for a limited period of time, and prolonged delays could force suppliers to reprice bids and contractors to remobilize crews at added cost

Solar and wind again make up 90 percent of new US electricity capacity

A review of data released by the Federal Energy Regulatory Commission (FERC) reveals that the combination of solar and wind accounted for 90 percent of new U.S. electrical generating capacity added to the US grid in the first seven months of 2025. In July, solar alone provided 96 percent of new capacity, making it the 23rd consecutive month in which solar has held the lead among all new energy sources.

It should be noted that FERC data only reports utility-scale projects, and that rooftop solar on homes and businesses are not included. It is assumed that rooftop solar makes up about 25 percent of all new generating capacity. The 434 units of utility-scale solar added during the first seven months of 2025 total 16.05-GW and were almost three-quarters (74.4 percent) of the total new utility-scale capacity placed into service by all sources.

Solar has now been the largest source of new generating capacity added each month for twenty-three consecutive months:

For the first seven months of 2025, the combination of solar and wind was 89.6 percent of new capacity while natural gas provided just 10.2 percent.