The ongoing discussion surrounding datacenters and rising electricity costs has gained momentum, particularly as we approach November 2025. Various stakeholders are blaming datacenters for these increases; however, the situation is more complex than it appears.
• Electricity Price Trends: Electricity prices have risen by 31.6% from January 2021 to January 2025, outpacing inflation (21.4%). A 5.0% increase was noted in 2025, continuing a trend that predates significant datacenter expansion under the Trump Administration.
• Misplaced Blame: Critics, including former government officials and U. S. Senators, have targeted datacenters for contributing to high electricity costs. However, experts argue that the construction of new datacenters takes years and cannot be blamed for current price hikes.
• Composition of Electric Bills: A large portion of electric bills consists of costs unrelated to the actual electricity consumed. These include fuel costs, transmission fees, and various taxes—many of which can reach 25% of a bill.
• Aging Infrastructure: Over 70% of the U. S. electric grid is over 25 years old, and replacing it is costly. Delayed improvements contribute to rising costs for consumers.
• Need for More Power Generation: With increasing energy demand, especially in the Northeast where older coal and nuclear plants are being shut down, more power generation facilities are required to stabilize prices.
• Positive Role of Datacenters: Datacenters can create jobs and economic activity, and they can also support energy initiatives by engaging in long-term power purchase agreements that benefit local communities.
The narrative framing datacenters as the cause of rising electricity costs ignores deeper systemic issues. As cities and states compete to attract datacenter investments, leaders should focus on comprehensive solutions that enhance both electricity delivery and affordability rather than scapegoating a key industry.
https://wattsupwiththat.com/2025/11/18/amping-up-datacenter-demagoguery-re-rising-electricity-costs/
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