America’s power grid is under mounting strain as artificial intelligence and data centers push electricity demand to unprecedented levels, driving up household bills and thrusting energy costs into the political spotlight.
The nation’s aging infrastructure where 70% of transmission lines are over 25 years old is already vulnerable to extreme weather. Now, a rapid buildout of energy-hungry data centers, some consuming as much electricity as 800,000 homes, is pushing demand beyond capacity. A Department of Energy (DOE) report warns that data center consumption could double or triple by 2028, intensifying grid stress.
The impact is being felt across households. In New Jersey, residential electricity rates have surged up to 20%, with studies attributing two-thirds of the increase to data center demand. Nationwide, retail electricity prices have risen faster than inflation since 2022 and are projected to continue climbing through 2026, according to the U.S. Energy Information Administration.
Politicians are seizing on the issue as voters grapple with rising utility bills. In New Jersey’s gubernatorial race, Democratic nominee Rep. Mikie Sherrill has pledged to declare a state of emergency on utility costs “on Day One” and take immediate action to curb rate hikes. Her Republican rival, Jack Ciattarelli, has emphasized boosting in-state generation, particularly nuclear and solar, while criticizing reliance on wind.
The debate reflects a broader national divide. Democrats argue that surging demand underscores the urgency of clean energy expansion, blaming Republicans for slashing renewable incentives and halting wind projects. Republicans counter that deregulation and fossil fuel expansion are the only realistic ways to meet growing demand.
At the federal level, Energy Secretary Chris Wright has acknowledged both the technical and political challenges. “It’s what I worry about most seven days a week,” he said, warning that the administration could bear the brunt of voter anger if bills keep rising.
Analysts caution that unless significant investments are made in grid modernization and generation capacity, household costs could rise by an additional $170 annually by 2035. With artificial intelligence and digital infrastructure continuing their relentless expansion, America’s power problem is set to become a defining issue of both policy and politics.
