A recent article from The Washington Post explores the surprising dynamics behind rising electricity prices in the U.S., particularly in relation to the growth of data centres supporting artificial intelligence (AI). The piece notes that, contrary to popular belief, increased electricity demand from such facilities does not always drive up residential rates. Instead, much of the increase is being caused by rising costs of aging power infrastructure—like poles and wires—and the effects of extreme weather events that demand major grid upgrades.
In one counterintuitive example, states that experienced large jumps in electricity demand saw lower average prices. For instance, in North Dakota, where demand rose almost 40 %, inflation-adjusted electricity prices dropped by around 3 cents per kWh. The reason: as demand rises, fixed costs (e.g., transmission infrastructure) are spread over more usage, easing the cost burden per unit.
However, the report also warns that this pattern may not hold indefinitely. As more AI-driven data centres are built, there could be pressure on utilities to invest in new capacity or infrastructure, which might eventually lead to higher customer rates if these costs are passed on. The article stresses that the story is nuanced: while data centre growth isn't currently the primary rate-hike driver, it is a factor that needs careful planning and regulation.
Finally, the piece places the electricity price trend within a broader context of grid modernization, climate resilience and clean-energy policy. It highlights that states with increasing transmission and distribution (T&D) costs are seeing sharper price rises—transmission costs in some places have nearly tripled over two decades. The takeaway: solving rising electricity prices requires more than pointing to data centres—it demands addressing fundamental infrastructure and climate-resilience challenges.
