Part 4 of 6: Nike Carstarphen used 40% less electricity. Her bill went up 20%. Data centers are why.
By the High Country Advocate Investigative Team
Nike Carstarphen cut her electricity use 40% through conservation—lights off, devices unplugged, consumption monitored carefully. Her Baltimore bill went up 20%.
Across the Mid-Atlantic and Midwest, millions face similar increases. Maryland customers pay $18 more monthly. Virginia: 13% increases. Illinois: 16%. New Jersey: nearly 20%. The increases don’t come from using more electricity. They come from infrastructure costs to support data centers.
The costs hide in “capacity charges” and “supply fees” that most consumers never notice. Following the money reveals who ultimately pays for the AI boom: residential and commercial ratepayers who subsidize infrastructure for tech companies chasing 100x revenue growth.
The Real Impacts
Virginia leads data center development with 12.1 GW of demand in 2025. Residential rates jumped 13% year-over-year between August 2023 and August 2024—more than double the 6% national average. The state hosts approximately 300 data centers, the highest concentration globally. Northern Virginia alone accounts for 70% of global internet traffic. Ratepayers fund the grid upgrades making this possible.
Illinois saw 16% increases, Ohio 12%, New Jersey nearly 20%, Maryland $18 more monthly. These states cluster around data center development zones where tech companies access cheap land, favorable tax treatment, and proximity to major fiber routes.
Bloomberg analysis from September 2025 found wholesale electricity costs up to 267% higher than 2020 levels in areas near data centers. Over 70% of nodes showing significant price increases sit within 50 miles of substantial data center activity.
Carnegie Mellon University projects 8% national average electricity price increases by 2030 driven by data center demand, but high-demand markets face increases up to 25%.
The increases hit residents who reduced consumption. Nike Carstarphen’s 40% reduction didn’t lower her bill because charges are based on grid infrastructure costs allocated across all customers. Data centers drive infrastructure investment. Residential customers fund it.
The PJM Capacity Market Explosion
The PJM Interconnection serves 13 states plus Washington D.C. The regional grid operator runs capacity auctions to ensure adequate power supply three years forward. Utilities bid to provide capacity. The clearing price gets paid to all suppliers. The costs pass to ratepayers.
In 2022, the PJM capacity auction cleared at $2.2 billion. The 2024 auction: $14.7 billion—a 569% increase. The 2025 auction reached $16.1 billion despite price caps implemented to limit the spike.
Monitoring Analytics, PJM’s independent market monitor, analyzed what drove the cost explosion. Their finding: data center demand accounted for $9.3 billion of the $16.1 billion total—63% of capacity market costs.
The agency’s report stated clearly: “Data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices.” A follow-up statement added: “Current conditions almost entirely the result of large load additions from data centers.”
These capacity charges transfer directly to consumer bills through supply charges or capacity fees that most customers don’t examine closely. The Maryland Office of People’s Counsel estimates customers will face “much greater hits going forward” as more data centers come online.
The PJM region hosts significant data center concentration. Virginia’s Loudoun County alone contains more than 25 million square feet of data center space. Each facility requires grid infrastructure investments: new transmission lines, upgraded substations, additional generation capacity. Utilities recover these costs through rate cases. Regulators typically approve as necessary for reliable service. The costs flow to all customers through formulas that socialize expenses.
The Political Backlash
Electricity price increases became a 2025 political issue. Virginia’s Abigail Spanberger won her gubernatorial race partly on promises to make data centers “pay their fair share.” New Jersey’s Mikie Sherrill won on a platform promising to freeze electric bill increases and require data centers to fund their own infrastructure.
Democratic strategists are positioning electricity prices as a 2026 midterm issue: wealth transfer from residential ratepayers to tech companies that can afford their own infrastructure but choose to socialize costs.
The political pressure creates tension. Data centers bring jobs and tax revenue. States compete by offering favorable tax treatment and advantageous utility rates.
But residential customers see only higher bills. Conservation doesn’t reduce costs. When they learn data centers drive increases, they question subsidizing infrastructure for profitable companies.
The tension reflects concentrated benefits versus distributed costs. Data centers locate in specific counties. Infrastructure costs spread across regional grids. Northern Virginia gets economic development. All 65 million PJM customers get capacity charges.
Former FERC Chairman Willie Phillips questioned the sustainability: “There is a question about whether or not all of the projections, if they’re real.” But FERC can’t dictate state-level utility rate design. Those decisions rest with state public utility commissions facing intense lobbying from tech companies and consumer advocates.
The Dilemma
The question isn’t whether data centers should exist. The question is who pays for the grid upgrades.
Current arrangements socialize costs while privatizing benefits. Tech companies build profitable businesses using infrastructure paid for by residential ratepayers. Data centers consume electricity at industrial scale but pay rates that don’t reflect full infrastructure costs. The difference gets made up through capacity charges.
Some jurisdictions require data centers to fund their own infrastructure. Others structure rates to reflect actual costs. But most states compete by offering favorable terms, creating a race to the bottom. States requiring full-cost pricing lose projects to states socializing expenses.
Nike Carstarphen and millions like her continue paying higher bills while tech companies spend $405 billion annually on AI infrastructure that may or may not generate returns. The math requires AI application revenue to grow 100x by 2030. Meanwhile, residential customers fund grid upgrades supporting that speculative growth through capacity charges appearing on bills whether the AI boom succeeds or fails.
Article 5 will examine whether an alternative exists—distributed computing that could eliminate centralized data centers entirely—and why the industry is betting $5 trillion it won’t work.
Support Independent Local Journalism — High Country Advocate was created as a real alternative to regional media that too often silences dissenting voices while taking sides in the political struggle. Producing in-depth, unflinching reporting like this series and others is expensive: servers, editing, research time, and legal review all add up quickly. If these articles have informed you or given you new perspective, please consider supporting HCA with a paid subscription — every subscriber helps keep this reporting strong and independent. 