Voters across multiple states are escalating their concerns about rising household costs, with steep electricity bills and fights over who pays for energy-hungry data centers emerging as a central issue ahead of next year’s midterm contests. This week’s off-cycle elections in New Jersey, Virginia and Georgia highlighted the political salience: electricity costs and utility regulation figured prominently in key races and commission contests, producing tangible wins for challengers in some jurisdictions. At the same time, investors and executives are warning that market gains tied to artificial intelligence and data-center growth may be concentrated and fragile, intensifying debates about both economic fairness and financial risk. The convergence of voter anger over utility bills and worries about an AI-fueled stock bubble is reshaping the affordability argument that will dominate campaigns into 2026.
- Utility companies requested or secured more than $34 billion in rate increases for the first three quarters of 2025, over double the amount from the same period a year earlier, according to PowerLines.
- About 80 million Americans are reported to be struggling to pay utility bills, underscoring the immediate hardship many households face.
- Georgia Power customers now average roughly $175 per month after six increases over two years; the utility is proposing a $15 billion expansion largely to serve data-center demand.
- Investors and executives flagged concentration in AI-related stocks: Morgan Stanley’s calculations tied 75% of recent S&P 500 gains, 80% of profits and 90% of capital expenditure to data-center growth.
- Short-seller Michael Burry’s large position against Palantir coincided with about a 10% slide in that stock and a particularly weak week for the Nasdaq 100—the worst since April.
- The International Energy Agency estimates a typical AI data center can use as much electricity as 100,000 homes, amplifying grid demand in hotspot regions.
Background
Rising living costs have long been a core political vulnerability for incumbents; electricity prices are the clearest, most visible example for many voters. States and utilities have been balancing the cost of system upgrades—hardening infrastructure against extreme weather and wildfires—with the economic lure of hosting data centers and other large industrial users. Regulators, lawmakers and governors are being pulled in different directions: attract jobs and investment, or shield residential customers from bearing the upfront connection and transmission costs.
Over the past several years, growth in data centers, bitcoin mining and renewed pushes for domestic manufacturing have increased electricity demand in specific regions, while natural gas price pressure and pipeline limits have lifted generation costs in others. Many for-profit utilities have raised rates faster than municipally owned utilities or cooperatives, producing sharp regional differences in retail bills. These structural trends mean some communities see steep, visible bill increases while others remain near inflation-linked changes.
Main Event
This week’s elections offered an early test. In New Jersey and Virginia—both states where electricity costs were prominent—candidates and campaigns made affordability a leading message. In Georgia, voters ousted two Republican incumbents on the state utility regulatory commission in races framed around whether rate increases were justified and whether large corporate customers, including data centers, were paying their fair share.
Georgia Power’s history of repeated hikes—six increases across two years—left average residential bills near $175 monthly. The company’s proposal to spend about $15 billion to expand capacity largely to meet data-center demand sparked local opposition and questions at the regulator about cross-subsidies. Winning candidates emphasized relief for typical households and criticized what they described as regulatory complacency toward large corporate requests.
At the national level, political leaders are already positioning on affordability. Republican signals indicate a planned focus on household costs in the 2026 midterms; Democrats are linking rising bills to policy and regulatory decisions they attribute to federal and state leadership. Governors in regions facing major grid-cost passes—such as Pennsylvania, Illinois and Maryland—have pressed the regional grid operator PJM Interconnection for measures to limit large wholesale cost increases designed to attract new generation for data centers.
Analysis & Implications
Politically, fast-rising utility bills create an unusually visible local issue that can swing close contests. Unlike broader inflation measures, which are diffuse, electricity and utility bills are specific monthly line items voters receive and understand. That visibility makes them potent ammunition in battleground districts, particularly in suburbs and exurban counties where data-center projects and transmission upgrades are concentrated.
Economically, the expansion of data centers presents a classic distributional problem: host communities and utilities must decide how to allocate costly interconnection and transmission upgrades. If large customers do not bear a proportionate share of upfront grid costs, residential ratepayers may shoulder increases, producing political backlash. Conversely, strict cost-recovery demands may deter investment, shifting the employment and tax benefits elsewhere.
On markets, the close linkage between AI growth and energy demand complicates risk assessments. Senior executives and wealth managers at major firms have warned that a disproportionate share of recent market gains, profits and capital spending has been tied to data-center expansion—raising the prospect of concentrated downside if expectations falter. Recent short positions and public debate over the stability of major private AI players have amplified those concerns and contributed to episodic market volatility.
Policy responses will matter. Regulators can require cost-allocation safeguards, states can negotiate benefit packages, and grid operators can refine wholesale pricing rules to limit forced cost burdens on existing customers. Federal support for grid modernization, targeted low-income assistance, or conditional incentives for data-center siting could mitigate both affordability and reliability risks, but would require coordinated action across jurisdictions.
Comparison & Data
| Metric | Recent Figure | Source |
|---|---|---|
| Utilities seeking/secured rate increases (Q1–Q3 2025) | $34+ billion | PowerLines (consumer advocacy) |
| Americans struggling to pay utility bills | ~80 million people | PowerLines report |
| Average Georgia Power residential bill | ~$175/month | Georgia regulatory filings |
| Georgia Power proposed capacity expansion | $15 billion | Company proposal |
| AI data center electricity use (typical) | Equivalent to 100,000 homes | International Energy Agency |
| Share of recent S&P 500 gains tied to data centers | ~75–90% (various metrics) | Morgan Stanley analysis |
These figures show both the scale of potential rate pressures and the concentration of demand that is shaping regional outcomes. Regions that host clusters of data centers face disproportionate grid investment needs; other states experience milder, inflation-tracking changes.
Reactions & Quotes
Political analysts and local voters reacted quickly to the utility-focused messaging in recent contests. A Fairleigh Dickinson University pollster noted the potency of concrete affordability narratives in tight races.
“There’s a lot of pressure on politicians to talk about affordability, and electricity prices are right now the most clear example of problems of affordability.”
Dan Cassino, Fairleigh Dickinson University
Financial leaders at major firms have warned about concentration risks in AI-linked equities, a concern echoed in recent market moves.
“Some AI stocks show a little too much concentration,”
Mary Callahan Erdoes, JPMorgan Asset & Wealth Management
Local voters in affected suburbs framed their choices around monthly budgets and visible rate increases.
“More affordable pricing—that’s the main thing. It’s running my pocket right now,”
Rebecca Mekonnen, Stone Mountain resident
Unconfirmed
- Whether all proposed data-center connections nationwide will be subsidized by residential ratepayers remains unresolved and varies by state and commission rulings.
- Reports that a private AI firm has effectively signaled it needs a federal “backstop” are being discussed in markets, but the precise nature and scope of any federal role are not publicly established.
Bottom Line
Electricity bills have moved from a technical utility-policy topic to a frontline political issue because they are tangible, recurring and increasingly steep in certain regions. Voters receive monthly notices of higher costs; that immediacy gives this issue unusually strong traction in local and statewide contests. Candidates who offer clear relief or stronger protections for residential customers are likely to gain resonance in affected districts.
At the same time, policymakers and regulators face a dual challenge: manage grid investments needed for economic development and technological growth, while protecting affordability for households. Market warnings about concentrated AI-related gains add urgency to the debate, suggesting both political and financial risks if expectations and costs are not aligned. How state commissions, governors and Congress respond over the next year will shape both utility economics and political outcomes in the 2026 midterms.
Sources
- Fortune (news)
- PowerLines (consumer advocacy report)
- International Energy Agency (IEA) (international energy agency)
- PJM Interconnection (regional grid operator)
- JPMorgan (corporate comments reported at Fortune Global Forum)
- Morgan Stanley (wealth management analysis)
- Associated Press (news)