How much have data centers increased electricity prices?

Rising artificial intelligence demand has led to a nationwide construction boom of power-hungry data centers in recent years, driving concern about rising utility costs. Sen. Elizabeth Warren, D-Mass., recently called for raising taxes on companies building data centers and said they’ve increased electricity bills for Americans.

"If you live near one of these large data centers, your electricity bills over the last five years have gone up by as much as 267%," Warren said in a June 5 X post.

Warren used that same figure in a December 2025 letter she and other senators sent to tech firms when announcing an investigation into their effect on utilities costs. The letter cited a September 2025 Bloomberg article analyzing data centers’ effects on electricity prices.

That article found that wholesale prices in locations near data centers have risen, in some places, by "as much as 267%" compared with five years ago. But that figure was referring to the rate utility companies pay producers, not the rates people pay to the utility companies for their monthly residential electric bills. 

Warren’s office pointed us to reporting from CBS News and Fortune that also mischaracterized the Bloomberg analysis as an increase in consumer bills. 

Warren’s office also provided examples of reporting on residents’ energy bills in states like Virginia and Maryland with sizable month-over-month increases last winter, in some cases doubling or tripling compared with the previous year or months. Some articles cited data center demand, along with abnormally cold weather, as causes of the increases. 

Residential electricity prices have risen in the last five years, and data center demand is a big driver in some areas. But Warren’s specific figure misrepresented the data.

What is included in a residential electricity bill?

The Bloomberg article analyzed local pricing points, called nodes, on the power grid, and found wholesale prices at some nodes near data centers increased by 267% between April 2020 and April 2025. Looking at the broader market, wholesale prices have more than doubled in some markets since 2020, the article said, while prices elsewhere have risen less sharply. 

That local wholesale price is not the same rate residents pay, Kenneth Gillingham, an economist at Yale School of the Environment, said. 

"There are other parts of the electricity bills, and the wholesale nodal electricity prices only raise the ‘supply’ component of electricity bills," he said in an email to PolitiFact.

The supply cost makes up about 30% to 50% of a consumer’s electricity bill, Gillingham said. Other components include the cost of transmission, distribution and taxes. 

Wholesale prices are often passed on to all the grid’s customers, including businesses. Utility companies often need to get rate increases approved by state regulators before passing that cost on, Gillingham said. 

Data centers have increased electricity bills

On average, residential electricity costs across the U.S. have risen by 42% in the last five years, according to data from the U.S. Energy Information Administration. Data centers aren’t the sole reason, but they’ve been a major driver in some places where costs have risen the most. 

Between March 2021 and March 2026, average residential retail electricity prices rose 94% in Washington, D.C., 74% in Maryland, 73% in Maine, and 58% in New York, according to the federal energy data.

In some regions, wholesale capacity markets — in which power plants are paid to be available based on expected demand — have been a contributor to price increases. PJM Interconnection, the grid operator for all or parts of 13 states and the District of Columbia, has seen record-high capacity prices three years in a row.

The Independent Market Monitor for PJM reported in 2025 that "data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices."

The report found that current and projected data center demand increased capacity costs by $9.3 billion, or 174% for the 2025-26 delivery year, compared with a scenario with no data center demand. 

Reports from the Maryland Office of People’s Counsel and the District of Columbia Public Service Commission pointed to data center load as one cause of rising electric bills. 

Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, said Warren has a broader point that consumers could be subsidizing the data centers. 

"Data centers are causing tens of billions of dollars of price increases in wholesale power markets and driving utilities to spend tens of billions of dollars on delivery infrastructure," Peskoe said. "In general, these cost increases are spread to all ratepayers by the utility."

Costs are likely to continue increasing without policy changes. One 2024 study found that data center demand increases without investment in generation and transmission capacity could increase electricity rates in Virginia by as much as 70% in the next decade. 

Data centers aren’t the sole cause of rising electricity prices. Other factors include equipment costs, an aging energy grid and clean energy requirements, according to a 2026 report from the Lawrence Berkeley National Laboratory, a federally funded research center. 

Our ruling 

Warren said, "If you live near one of these large data centers, your electricity bills over the last five years have gone up by as much as 267%."

The figure she cited referred to wholesale prices, not the prices residential consumers pay every month. Wholesale prices are part of just one component of a residential electricity bill — the "supply" component, which makes up about 30% to 50% of a consumer’s electricity bill. 

Warren’s statement has an element of truth because data centers have driven up electricity costs, and average consumer prices have nearly doubled in areas such as the District of Columbia. 

But her statement gives the wrong impression about the precise effect on consumers’ utility bills so far. We rate it Mostly False.