The States Where Electricity Rates Will Double In Ten Years

How fast are residential electricity bills rising? A recent study showed that Washington DC and four states had rate increases of cover 50% in the last five years. In the case of Washington, the rate increase totaled 92.3%  Just last year, in Missouri rates rose 38.3%. 

Because of skyrocketing AI data center build outs and an increased use of air conditioning due to global warming, rates will continue to rise at the current pace, and perhaps faster. Rob Kelter, a senior attorney for the Environmental Law & Policy Center, told Inside Climate News, “You’re talking about data centers that need as much electricity as a small city, and we’re just not ready to handle that. 

In New York, data center construction has slowed to a halt for now. “Governor Kathy Hochul today signed an Executive Order to create the nation’s first moratorium on new hyperscale data centers, establishing the strongest standards for data center development and creating a blueprint to support localities,” her office said, Similar actions are being taken elsewhere, and most recently in Illinois. There are the fourth and sixth largest states by population. 

Electric Bills: The Doubling States

The bottom line: A handful of states are compounding fast enough to double residential electric rates within 10 years. This is not a projection, but a current trajectory. It is important to remember the effects of compounding. An annual growth rate of 7% drives a doubling over the course of a decade. Clearly, the pace is already much greater than that through the nations. 

Already there or close:

• New Jersey. New Jersey saw a 21.6% increase in one year. At that rate, the cost will double in under 5 years. The cause is regional grid capacity costs, driven by data center demand outpacing new power plants.
• Maine. Maine saw a 22.9% increase in one year. The state imports most of its power. There is no local buffer against regional price spikes.
• Washington, D.C. Washington, D.C. saw a 24.5% increase in one year. It has the same exposure as New Jersey.
• New York. New York saw a 36% increase over five years, which is a 6.3% annual pace. While this is under the doubling threshold, the growth is accelerating each year rather than flattening.
• California. California is already near the top nationally. Growth here is not demand-driven; it is due to wildfire liability and grid-hardening costs. These are structural costs that will not reverse.

• Massachusetts, Rhode Island, Connecticut — they are already expensive, but the rates are volatile year to year rather than climbing on a straight line.
• Ohio, Indiana — these states were cheap historically. The fastest-growing data center load in the country is located here. The risk of rate shock is underpriced by residents who are still anchored to old numbers.