Kerby Anderson

Affordability was the theme this year in the 2025 elections. The recently elected governors in New Jersey and Virginia both promised to lower electricity bills for residents in their states. While on the campaign trail, President Trump also pledged to cut electricity costs and energy prices.

Cutting the cost of electricity makes a great campaign promise but achieving it won’t be easy for one simple reason: data centers. The artificial intelligence revolution demands lots of electricity. Data centers feeding AI are driving up electricity prices for the average American.

Data from the Energy Information Administration illustrates what has happened and what will happen in the next two years. For much of the last decade and into this decade, electricity prices tracked inflation. Now prices are rising faster than inflation for two reasons.

First, AI and everything associated are hungry for electricity. Data centers are providing computing power for servers and cloud computing. As I have mentioned in previous commentaries, a typical AI search uses much more electricity than a typical Internet search.

Second, the demand for electricity is quickly outstripping supply. Some of that is due to mandates from the previous administration. As I have also mentioned in previous commentaries, as older fossil fuel power plants were about to be retired, very few new ones were being built because the emphasis was on renewable energy sources.

Electricity needs for data centers will likely double in the next few years at a time when energy production is declining. Consumers may be inclined to blame politicians, but the real reason is AI and data centers.