AI data centers drive up electricity costs, making it a central issue in 2025 elections

Rising electricity costs are emerging as a major political issue in the 2025 elections, with candidates across New Jersey, Virginia, and other states making utility bills a central campaign theme. The surge is driven largely by America’s aging power grid struggling to meet explosive demand from AI-powered data centers, which consumed nearly a quarter of Virginia’s electricity in 2023 and are projected to double or triple energy use by 2028.

What you should know: Political campaigns are responding aggressively to voter concerns about skyrocketing utility bills, with both parties proposing dramatically different solutions.

• Democratic gubernatorial nominee Mikie Sherrill, a U.S. Representative, in New Jersey promises to “declare a state of emergency on utility costs” and use “emergency powers to end these rate hikes and drive down your bills” on Day One.
• Republican opponent Jack Ciattarelli counters with calls to “expand our nuclear capabilities in South Jersey” and “accelerate solar” while blaming the outgoing Democratic administration.
• In Virginia, Democratic nominee Abigail Spanberger, also a U.S. Representative, specifically addresses “making sure data centers don’t drive up energy costs for everyone else in Virginia.”

The big picture: America’s power infrastructure is buckling under unprecedented demand, creating a perfect storm of political and economic pressures.

• The country’s largest power grid has set cost records for two consecutive years, covering competitive political territory in Pennsylvania, Michigan, North Carolina, Virginia, and New Jersey.
• According to the U.S. Energy Information Administration, “retail electricity prices have increased faster than the rate of inflation since 2022, and we expect them to continue increasing through 2026.”
• Data centers now draw as much power as 800,000 homes each, with Virginia dubbed the “data center capital of the world.”

Why this matters: The intersection of AI infrastructure and electoral politics is creating a fraught debate about technological progress versus affordability.

• In New Jersey, residential rates have climbed by up to 20%, with the Regional Plan Association, a tri-state planning organization, attributing “about two-thirds of the increased prices” to increased data center demand.
• Energy Innovation, a nonpartisan think tank, projects power generation capacity could fall by 340 gigawatts by 2035, potentially increasing household energy costs by $170 annually.
• The issue opens difficult questions about AI’s role in the economy, as the technology that could threaten some jobs is also driving up basic utility costs.

What they’re saying: Political leaders are acknowledging the electoral stakes while pointing fingers across party lines.

• Energy Secretary Chris Wright admitted the political vulnerability: “Who’s going to get blamed for it? We’re going to get blamed because we’re in office.”
• Wright told Fox Business that rising electricity costs are “what I worry about most seven days a week.”
• Department of Energy spokesperson Emery Washington blamed the previous administration’s policies and promised to reverse “subsidies that supported more expensive, less reliable energy.”

Key infrastructure challenges: The power grid’s vulnerabilities extend beyond just capacity constraints.

• According to the Energy Department, “70 percent of transmission lines are over 25 years old” and “our aging infrastructure is struggling to meet our modern electricity needs.”
• Studies from Pennsylvania State University and Columbia University have linked grid vulnerabilities to increasing severe weather events.
• The Department of Energy estimates that data center energy use “is projected to double or triple by 2028.”

Campaign spending: Major political organizations are pouring millions into energy-focused advertising.

• Three leading Democratic organizations spent $8 million on August ads linking rising electricity bills to GOP policymaking.
• Americans for Prosperity, a leading conservative group, launched a seven-figure conservative campaign urging lawmakers “to unleash America’s energy potential by cutting red tape.”
• The Virginia League of Conservation Voters is running ads blaming Republicans, saying “big energy is raising prices” and “Virginia Republicans are helping big corporations rip you off.”