Residential electricity prices in the United States have risen 36 percent since 2020, climbing from an average of 12.76 cents per kilowatt-hour to 17.44 cents as of February 2026, according to federal data cited by CNBC. How much of this increase stems from AI-driven data center expansion, and how much from broader grid dynamics, has become the central question in an intensifying national debate over who bears the cost of the artificial intelligence buildout.
A January report from SemiAnalysis, a semiconductor research firm, complicates the dominant narrative. The report found that PJM Interconnection’s Base Residual Auction, which sets capacity prices for the largest power grid in North America, is a more significant driver of rising electricity costs than data center construction itself. Maeghan Rouch, an energy partner at Bain & Company, said PJM’s constrained capacity market has pushed wholesale prices higher across thirteen states and the District of Columbia regardless of data center demand.
Community opposition has sharpened. Residents in northern Virginia, central Ohio, and parts of Georgia have organized against proposed data center campuses, citing noise, water consumption, and the diversion of grid capacity from households to corporate tenants.
The Trump administration’s response has been the Ratepayer Protection Pledge, signed on March 5 by Amazon, Google, Meta, Microsoft, Oracle, OpenAI, and xAI. The companies committed to ensuring their data center operations do not raise electricity rates for residential and small-business customers. Marc Einstein, a research director at Counterpoint Research, said the pledge amounts to a voluntary framework with no enforcement mechanism.
Sen. Tom Cotton introduced the DATA Act in January, the first federal legislative attempt to address data center energy regulation directly. The bill creates a new legal category, the “consumer-regulated electric utility,” for data centers that generate their own power off-grid. Facilities meeting this definition would be exempt from FERC rate regulation, reliability standards, interconnection rules, and transmission planning requirements. Energy analysts have flagged the exemptions as a potential liability, warning that off-grid data centers not subject to federal reliability standards could pose cascading risks to neighboring grid infrastructure during peak demand events.
Rep. Nick Begich is expected to introduce a House companion bill.
Grid connection wait times compound the pressure on all sides of the debate. Chris Howard, a senior director at JLL, said new data center projects face four-to-six-year waits for grid interconnection in many U.S. markets, with some international locations approaching a decade. The bottleneck has pushed several major operators toward off-grid generation, the very model the DATA Act seeks to deregulate.
