US Electricity Rates Rise Nationwide Amid Data Center Energy Demand

Electricity prices across the United States are rising significantly, driven largely by the growing energy demands of AI-powered data centers and extreme weather conditions. Tennessee experienced one of the highest electricity rate increases in 2025, with a 12.1% jump year-over-year, while the average U.S. residential rate rose 6.5% nationwide. The PJM Interconnection grid, covering 13 states and the District of Columbia, faces potential residential rate increases of up to 60% by 2030 due to soaring capacity auction prices fueled by data center demand, with short-term impacts expected to raise bills starting in 2026. Texas is also witnessing challenges as data centers drive up energy consumption and require costly infrastructure upgrades, alongside increased water usage that strains drought-affected areas. Major tech companies like Google, Amazon, and Microsoft are turning to nuclear energy investments to meet rising power needs sustainably. President Donald Trump recently announced over $92 billion in investments to support infrastructure for these expanding energy demands.