Data center expansion strains grids, raises costs and emissions

Miguel Yañez-Barnuevo reports that as data centers expand nationwide, utilities have received hundreds of gigawatts in interconnection requests, prompting utilities to seek large infrastructure investments and pass costs onto residential and small-business customers. This article is a synthesis of reporting and data from multiple sources rather than a single new corporate or government announcement.

• Main announcement/action:Utilities received at least 700 GW of data center interconnection requests in 2025, prompting requests for $29 billion in rate increases in H1 2025 and driving investment in generation, transmission, and transformers; regulated utilities face an “obligation to serve” that interacts with approvals by public utility commissions to raise rates to cover these upfront investments.
• Background / other details:Coal plant refurbishment can cost up to $1.3 billion, natural gas plants entering service in 2030 report costs around $2,000 per kW (potentially rising to $3,000 per kW), average U.S. residential electricity rose to 19 cents/kWh by end of 2025 (from ~13 cents pre-2019), $25 billion in outstanding household utility debt in June 2025 and ~21 million households behind on bills; regulators and utilities are creating large-load tariffs and exploring measures such as on-bill financing for energy-efficiency upgrades.