US manufacturers’ energy costs soar because of AI data center demand
US manufacturers in the Rust Belt, particularly Ohio, are facing significantly higher electricity costs due to the surging energy demand from AI data centers, which is straining the PJM Interconnection power grid. This rise in costs threatens the viability of US manufacturing and highlights the challenges in expanding power generation and transmission infrastructure. The article discusses policy responses and the impact of renewable energy project cancellations on grid capacity.
Manufacturers in US Rust Belt cities, including a 141-year-old brick company in Ohio, are experiencing a dramatic increase in electricity costs, which is attributed to the growing energy demands of AI data centers. A Reuters analysis highlighted Belden Brick Company's monthly electricity bills soaring from $1,600 to $12,000 due to higher capacity charges imposed by PJM Interconnection, the largest power grid operator in the US.
The Steel Manufacturers Association reports that US steel companies in the PJM region are facing tens of millions of dollars in increased annual power costs, with one Ohio-based steelmaker, Metallus, seeing a 70 percent jump in electricity expenses since 2024. This trend jeopardizes President Donald Trump’s “Made in America” manufacturing plan, despite his simultaneous support for the tech companies driving the AI data center boom.
PJM Interconnection forecasts that electricity demand within its territory will exceed available supply by 6.6 gigawatts by 2027, equivalent to over six nuclear power plants. The Trump administration has promoted a Ratepayer Protection Pledge for Big Tech companies to fund new power infrastructure, and pushed PJM for a backstop auction for power supply. However, efforts to address the energy crisis are complicated by the cancellation of 266 gigawatts of power projects in 2025—primarily clean energy—due to factors like local opposition and a lack of transmission lines.