Electricity rates in the United States have risen about 30 percent over the past five years, and the typical household now pays roughly $300 more per year for power. A new analysis argues that the surge cannot be blamed on data centers alone. Bills are expected to keep climbing even without new hyperscaler data centers, the piece contends, and the deeper problem lies in the structure of the utility industry itself.
The strain is visible in more places than monthly statements. At least eight states have seen utilities preemptively shut off power to customers as wildfire risk has grown, and some utility equipment has been blamed for sparking fires. Those shutoffs, together with the cost of keeping aging infrastructure running, feed into a broader debate over who should pay for the grid and how it should be run. For households already watching their budgets, the combination of higher rates and the prospect of losing service during dangerous weather has made the issue hard to ignore.
The author places much of the blame on a utility model that dates back to the early twentieth century. The Public Utilities Holding Company Act of 1935 was passed in the aftermath of the Depression-era collapse of large utility holding companies, and it curbed their power. In 2005, Congress repealed key provisions of that law and lifted the ban on utility political contributions. Between the mid-1990s and 2015, investor-owned utilities roughly halved in number through mergers, consolidating control in fewer hands. The result, in the analysis's telling, is a set of companies with guaranteed returns and little pressure to change how they operate.
The analysis also points to rules that it says protect incumbent utilities from competition. It alleges that utilities use planning loopholes, right-of-first-refusal laws and review fees to block rooftop solar and other distributed generation. Research from Rewiring America cited in the piece suggests that demand from data centers could largely be met by distributed clean assets rather than new centralized generation. In California, rooftop solar saved in-state customers more than $2 billion in 2024, a figure the author uses to argue that distributed resources can deliver tangible savings to ratepayers.
Based on that evidence, the author proposes breaking up for-profit utilities and treating distribution as a public service. The precedent offered is the breakup of AT&T, which separated its network operations from competitive services and opened the market to new providers. Applied to the grid, the same logic would split the wires business from the competitive parts of the power system. The author presents this as the most direct way to address rising costs at their source, rather than continuing to adjust rates within a structure that, the piece argues, rewards spending and consolidation.