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Newsweek
4 days ago
- Business
- Newsweek
Eye-Popping Electric Bills Come Due as Price of AI Revolution
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Even if you've never used ChatGPT or generated an AI image, chances are you're already paying for it. The artificial intelligence boom is driving a surge in electricity demand across the United States, as data centers powering AI tools like large language models (LLMs) and image generators consume massive amounts of energy. That demand is pushing up household power bills and straining the country's electric grid, leaving millions of Americans footing the bill. This summer, electricity bills surged across the eastern United States. In Trenton, New Jersey, the average home's monthly bill rose by $26. In Columbus, Ohio, it climbed $27, driven largely by rising costs in the region's wholesale power markets. According to figures from AEP Ohio and regional monitors, demand from data centers is a key factor behind those increases. The latest data from the U.S. Energy Information Administration backs that perception. In May 2025, the average U.S. household paid 17.47 cents per kilowatt-hour, up from 16.41 cents a year earlier—a 6.5 percent increase. Some states saw much sharper spikes, including Maine (up 36.3 percent) and Connecticut (18.4 percent). AI Data Centers Strain Power Markets The pressure on the grid is even more extreme in electricity managers like PJM, a little-known company that operates the electric grid that serves more than 67 million people across 13 states in the eastern U.S. In December 2024, capacity prices jumped from $30 to $270 per megawatt-day—a ninefold increase that triggered lawsuits and political backlash. Pennsylvania sued PJM, Maryland passed emergency legislation and New Jersey's governor demanded the CEO's resignation. At the heart of the price surge are massive data centers built to support AI. According to PJM's independent market monitor, Monitoring Analytics, roughly three-quarters of the capacity price hike was tied to demand from current and planned data centers. The watchdog estimates an additional $9.3 billion in future costs will start hitting consumer bills this month. "These are not your average server farms," said Abraham Silverman, an energy researcher at Johns Hopkins University. "AI training centers—hyperscale facilities—can draw hundreds or thousands of megawatts at a single site. It's like building five nuclear plants into the grid every year, just for AI." Silverman said current energy planning systems are outdated. "We're nowhere close to being able to meet this demand as a society," he said. "Our models still assume flat electricity growth. That's not our reality anymore." In a recent analysis, he found that auction prices could result in consumer costs doubling—from $6 billion to nearly $15 billion annually—due to AI-driven data center demand. "That's a massive transfer of cost. The question is: who's going to pay it?" Even as utilities invest in infrastructure, many large-scale data center projects don't cover the full cost of the substations and transmission lines needed to serve them. A report by the analytics firm Wood Mackenzie found that in most cases, utilities end up shifting these costs onto other customers or absorbing them entirely. "Utilities either need to socialize the cost to other ratepayers or absorb that cost—essentially, their shareholders would take the hit," said Ben Hertz-Shargel, head of grid edge research at Wood Mackenzie, in an interview with The New York Times. Big Tech's Billions Meet an Aging Grid Major tech firms are racing to expand their AI infrastructure. Microsoft plans to spend $120 billion on data centers. Meta expects up to $72 billion in capital expenditures this year. Google is investing $25 billion in facilities across the PJM region alone. To keep pace, utilities are increasingly relying on aging fossil fuel plants to generate enough electricity to meet the crushing demand. Dominion Energy, which serves much of Virginia, has asked regulators to require large-load customers to pay a fairer share of grid upgrade costs. Without reform, electricity prices in parts of Virginia are expected to climb as much as 25 percent by 2030. Large electrical transmission lines run through grass lands to power the newly completed Meta's Facebook data center in Eagle Mountain, Utah on July 18, 2024. The data center is a complex of five large buildings... Large electrical transmission lines run through grass lands to power the newly completed Meta's Facebook data center in Eagle Mountain, Utah on July 18, 2024. The data center is a complex of five large buildings each over four football fields long and totaling 2.4 million square feet. More Photo by GEORGE FREY / AFP) (Photo by GEORGE FREY/AFP via Getty Images Silverman said the problem isn't that data centers are coming—but how they're connecting to the grid. "States should welcome this investment," he said. "But they need to make data centers bring their own clean energy, sign long-term utility contracts, and post financial collateral. Otherwise, prices are just going to keep going up." The Trump administration has adopted an "all of the above" approach, fast-tracking permits for fossil fuel plants, nuclear power, and hydropower to meet surging AI energy demands. At the same time, it has scaled back federal support for wind and solar development. "Wind and solar are the fastest resources to deploy," said Paulina Jaramillo, professor of Engineering and Public Policy at Carnegie Mellon University. "But this administration is doing everything it can to stop their development. That puts us at serious risk of brownouts and blackouts." She added: "Electricity markets in restructured regions are cracking. We're missing the coordinated planning we need. No single entity is responsible for long-term system design anymore." Electric Bills Rise, Emissions Climb The rising costs aren't a temporary blip. According to Arbor, an energy savings platform, average U.S. household electricity prices have more than doubled since 2004—from about 9 cents per kilowatt-hour to 19 cents today. Since 2020, prices are up 34 percent. "If we don't modernize the grid now, power bills will be volatile, unpredictable, and unaffordable," said Arbor founder Andrew Meyer. Meanwhile, a June 2025 analysis by Carnegie Mellon and North Carolina State University warned that under current policies, national wholesale electricity prices could rise 8 percent and annual CO₂ emissions could increase by 275 million metric tons by 2030—the equivalent of adding France's entire carbon footprint to the U.S. grid. "Without policy changes, this is what we're locking in," Jaramillo said. "We will pay for it one way or another."
Yahoo
29-07-2025
- Climate
- Yahoo
Nearly 3,000 residents on Columbus' East Side without power on July 29, AEP says
Nearly 3,000 people are without power on Columbus' East Side, according to a Facebook post from AEP Ohio. AEP said the outage was reported just before 5:40 p.m. July 29, according to its outage map. The utility company did not immediately say what caused the outage. Crews have responded to the area, and AEP estimates that electricity will be restored at 9:30 p.m., the map says. The outage is affecting residents living on East Main Street between Hamilton and Noe-Bixby roads, according to the outage map. Affected residents may register for updates on power restoration at Reporter Shahid Meighan can be reached at smeighan@ at @ShahidMeighan on X and at on Bluesky. This article originally appeared on The Columbus Dispatch: AEP: Nearly 3,000 people on Columbus' East Side without power July 29 Solve the daily Crossword
Yahoo
28-07-2025
- Business
- Yahoo
PUCO Adopts AEP Ohio Data Center Proposal to Protect Consumers
American Electric Power Company, Inc. (NASDAQ:AEP) is among the 13 Best Electrical Infrastructure Stocks to Invest In. American Electric Power Company, Inc. (NASDAQ:AEP)'s unit AEP Ohio's plan to guarantee data centers pay for the infrastructure needed to satisfy their high energy demands was accepted by the Public Utilities Commission of Ohio (PUCO) on July 9, 2025. A series of large electrical transmission towers providing power to the public. Large data center clients are required under the agreement to pay for a minimum of 85% of the energy they have contracted for, regardless of lower usage. Smaller facilities are subject to a sliding scale, and exit fees and financial viability proof are necessary. The regulations are in effect for 12 years, with a 4-year ramp-up period. The plan also lifts the previous restriction on new Central Ohio data center agreements. American Electric Power Company, Inc. (NASDAQ:AEP)'s AEP Ohio, which serves 1.5 million consumers in 61 counties, submitted the plan in May 2024, with the cooperation of PUCO personnel, the Ohio Consumers' Counsel, and the Ohio Energy Group. President Marc Reitter stressed how crucial it is to coordinate infrastructure planning with data center expansion. The decision benefits Ohio's technology sector while protecting other ratepayers from bearing the infrastructure burden. While we acknowledge the potential of AEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025. Disclosure. None. Sign in to access your portfolio
Yahoo
25-06-2025
- Climate
- Yahoo
AEP Ohio says no blackouts expected despite heat wave; here's how to help prevent them
As central Ohio sweats its way through June, only one thing could make this oppressive heat worse: a power outage. Thankfully, AEP Ohio isn't expecting one. Director of operations Matt Bennett said there's been no indication from PJM Interconnection, the organization that manages the electricity grid for Ohio and 12 other states, that an electrical outage is anticipated in the coming weeks. That's not to say that an "emergency load reduction," commonly known as a blackout, isn't possible. Bennett said the process would involve temporarily cutting power to one group of circuits for some minutes, then restoring it and moving onto the next group. "That's why they call it a rolling blackout, because you're rotating the outages to ultimately reduce the demand on the system," Bennett said. "There's never a convenient time for a power outage, so you're trying to make it as least inconvenient and least impactful for the customer as possible." Temperatures are projected to be in the high 90s the next few days, with heat index values reaching as high as 104 degrees. On June 25, temperatures are expected to slightly drop, remaining in the low 90s through June 29 at least. Now until 8 p.m. on June 24, Columbus and much of Ohio are under a heat advisory issued by the National Weather Service due to consecutive days — and even nights — of high heat and humidity. In the past few days, PJM has issued multiple alerts regarding the heat wave, which Bennett said serve as preventative measures to ensure the electrical grid is in the best possible condition amid extreme temperatures. There is a possibility that PJM directs a formal energy conservation request to industrial and residential energy users in a further attempt to be proactive, but a blackout itself is "an absolute last resort," Bennett said. To help fend off this outcome, Bennett said people should minimize their electricity usage between 3-6 p.m., when demand is highest. During this period, you should avoid charging your electric vehicle and using large appliances like ovens, dishwashers and dryers. Bennett also advised turning your thermostat up a few degrees — ideally to 78, as recommended by AEP. Even if it's turning off lights or unplugging phone chargers, Bennett said "every little bit helps." "It may not seem a lot for each individual person, but on a larger scale, it can really make a big impact, because this is truly a supply and demand issue," Bennett said. "The overall goal is that we protect the grid, which ultimately will keep the energy flowing for all of us." AEP Ohio remains in "close communication" with PJM, and Bennett encouraged Ohioans to follow AEP Ohio on Instagram, X or Facebook to stay updated on potential blackouts and learn more tips to conserve energy. Reporter Emma Wozniak can be reached at ewozniak@ or @emma_wozniak_ on X, formerly known as Twitter. This article originally appeared on The Columbus Dispatch: AEP Ohio says blackouts, power outages not expected despite heat wave
Yahoo
25-06-2025
- Climate
- Yahoo
Heat advisory extended to June 27 as series of pop-up storms move through central Ohio
As a series of pop-up storms move through central Ohio this afternoon and evening, the National Weather Service has extended a heat advisory until 8 p.m. Friday, June 27, because of forecasted high daytime heat indexes and overnight lows. The storms had knocked out power to more than 1,225 AEP Ohio customers in Upper Arlington and Columbus' Northwest Side, as well as more than 350 in Reynoldsburg and another 225 in Columbus' German Village area as of 4:45 p.m., according to the utility's outage map. While power was restored to all but a few customers in Upper Arlington and Columbus' Northwest Side as of 5:20 p.m., the outage map indicated the outages in German Village and Reynoldsburg continued. Meanwhile, the weather service has also issued a flood advisory for Delaware and Franklin counties as the passing storms are expected to dump heavy rain, potentially causing minor flooding. The advisory is scheduled to expire at 6:30 p.m. Some areas that may experience minor flooding include Columbus, Dublin, Westerville, Upper Arlington, Hilliard, Worthington, Polaris, and Clintonville. The storms have already dumped between 1½ and 3 inches of rain, the weather service said. Additional rainfall amounts of up to an inch are also possible. The weather service also extended the heat advisory until 8 p.m. June 27, as heat index values are expected to be in the upper 90s to the lower 100s the next two days, the weather service said. In addition, central Ohioans can expect no relief after the sun goes down as nighttime air temperatures ar not expected to drop below 75 degrees. The heat advisory began Sunday, June 22, and was originally supposed to end at 8 p.m. Wednesday, June 25 until it was extended to Friday. The Central Ohio Transit Authority (COTA) announced late afternoon on June 25 that it will continue to suspend fares system-wide through Friday, June 27, as a result of the weather service extending the heat advisory in Franklin County. Fares have been suspended since Sunday, June 22 when the heat advisory first began. COTA suspends fares on all transit vehicles on all routes when the weather service issues either a heat or cold advisory or warning due to extreme temperatures. The extension of the heat advisory comes as more than 100 people in Columbus have become sick from heat-related illnesses, The Dispatch previously reported. On June 24, more than 2,100 residents living on parts of the city's Northeast and North Central sides were affected by power outages. Power was eventually restored around 11 a.m. on June 25 to a majority of customers, though over 200 remained without power at that time. That figure was down to 14 customers as of 4:45 p.m., according to AEP Ohio's online outage map. Reporter Shahid Meighan can be reached at smeighan@ at ShahidMeighan on X, and at on Bluesky. Public Safety and Breaking News Reporter Bailey Gallion can be reached at bagallion@ This article originally appeared on The Columbus Dispatch: Despite passing storms, heat advisory extended to 8 p.m. June 27
