The Invoice That Intelligence Built
The envelope arrived yesterday. For residents in Loudoun County, Virginia, and across the PJM Interconnection footprint, the numbers on the page are not a seasonal fluke. They are an opening salvo. As of December 23, 2025, retail electricity prices in the United States have hit a national average of 19 cents per kilowatt-hour, a figure that masks the localized carnage in regions hosting the global AI infrastructure boom. The money is flowing from the pockets of residential ratepayers directly into the high-voltage transformers of hyperscale data centers.
This is the cost of the AI revolution. It is not an abstract technological shift; it is a physical strain on a grid that was never designed for the nonlinear demand of 1,000-megawatt campuses. According to Morgan Stanley’s AI Energy Summit held earlier this month in New York, the U.S. power gap could reach 20 percent by 2028. Analysts David Arcaro and Michelle Weaver have shifted their tone from optimistic to urgent, noting that the industry now faces an affordability crisis that threatens to derail both the technology and the consumer’s budget.
The 833 Percent Shock
To understand why your bill is rising, you must follow the capacity market. Capacity payments are effectively an insurance premium paid to power plants to ensure they stay online for peak demand. For years, these prices were an afterthought, hovering near 50 dollars per megawatt-day. That ended in mid-2024. The 2025/2026 capacity auction cleared at 269.92 dollars, an 833 percent spike. Then, in the record-setting July 2025 capacity auction results, the price hit a FERC-approved cap of 329.17 dollars across the PJM footprint.
These wholesale spikes do not stay at the wholesale level. They are being passed through as “fuel factors” and “riders.” In Illinois, ComEd customers are already seeing price hikes of 20 to 25 percent. In Connecticut and Maine, rates have soared by 18.4 percent and 36.3 percent respectively over the last 18 months. The chart below visualizes the unprecedented escalation in capacity costs that is now filtering into household budgets.
Data Center Alley and the Dominion Decision
The epicenter of this crisis is Northern Virginia. In early December 2025, the State Corporation Commission’s final order on Dominion Energy’s rate case sent shockwaves through the region. While the commission approved a new rate class for data centers to theoretically force them to pay their fair share, the immediate reality for residential customers is a price hike of 11.24 dollars per month starting January 1, 2026. Another 2.36 dollar increase is already scheduled for 2027.
Data centers now consume 39 percent of all electricity generated in Virginia. A single facility can pull as much power as 80,000 households. To keep up, utilities are keeping old coal plants online and rushing to build 944-megawatt gas peakers, like the contested plant in Chesterfield County. These capital expenditures carry a guaranteed profit margin for the utility, often between 9 and 10.5 percent return on equity. The risk is borne by the ratepayer, while the reward is captured by the utility shareholders and the hyperscalers who get first priority on the newly built substations.
Regional Rate Hike Comparison
While the national average is rising, the pain is concentrated in the states where AI training clusters are most dense. Below is a breakdown of the percentage hikes consumers are facing as we close out 2025.
| Region / State | Primary Driver | Avg. Rate Hike (%) |
|---|---|---|
| Northern Virginia (Dominion) | Grid Expansion & Substations | 15.0% (Projected to 2027) |
| Chicago (ComEd) | PJM Capacity Auction Spike | 20.0% – 25.0% |
| Connecticut | Supply Constraints & Data Centers | 18.4% |
| Maine | Transmission Upgrades | 36.3% |
The Investor Playbook: Follow the Power
For the financial observer, the strategy has shifted from betting on the AI software to betting on the power producers who hold the keys to the kingdom. Morgan Stanley’s Stephen Byrd has identified a 45-gigawatt shortage by 2028, and companies like Vistra (VST) and Talen Energy (TLN) are the primary beneficiaries. Vistra shares have nearly quadrupled since early 2024 because they own the physical generation that hyperscalers need. As power becomes the ultimate bottleneck, these firms are negotiating “off-grid” deals where Amazon or Google pay a premium to bypass the local utility entirely.
This leaves the residential consumer in a precarious position. When big tech companies go off-grid or sign behind-the-meter nuclear deals, they essentially leave the remaining ratepayers to foot the bill for the aging public infrastructure. The regulatory firewall designed to protect families is showing cracks. The State Corporation Commission in Virginia is already reconsidering its approval of new gas plants due to public outcry, but the demand for power remains relentless.
The next flashpoint arrives on January 15, 2026, when the first round of regional fuel factor adjustments for the mid-Atlantic grid goes live. This will be the first time many households see the full weight of the July 2025 capacity auction reflected in their monthly billing cycle. Watch the 19-cent national average; it is the floor, not the ceiling.
