Rising utility bills could climb higher as Pennsylvania prepares for data center boom
Northeastern Pennsylvania residents face rising utility bills, with energy experts and state officials attributing part of the pressure to the rapid growth of artificial intelligence and data centers. The Pennsylvania Independent Fiscal Office reports significant increases in electricity prices and water bills, while PJM Interconnection is proposing new rules to manage grid connection costs for large customers. Pennsylvania has also implemented requirements for data center projects seeking state incentives to disclose their projected electricity and water demands.
Residents in Northeastern Pennsylvania are experiencing a steady rise in utility costs, with electricity prices projected to increase by 46% and water bills by approximately 41% between 2020 and 2025. Energy experts and state officials warn that the burgeoning artificial intelligence and data center industries are expected to place additional strain on the region's electricity and water systems.
Data centers, particularly those supporting AI, consume vast amounts of electricity continuously and often require millions of gallons of water for cooling. The Pennsylvania Independent Fiscal Office (IFO) indicates that electricity demand across the 13-state PJM Interconnection region, which includes Pennsylvania, is accelerating due to this data center growth, especially in neighboring states like Virginia and Ohio, with similar trends expected in Pennsylvania.
The rising demand comes as older power plants retire faster than new generation capacity is added. This imbalance has led to a 645% surge in PJM's electricity auction costs for the 2027-28 planning year compared to three years prior, costs that are ultimately passed on to consumers. PJM officials have acknowledged that data center demand outpaces new power generation and have proposed new rules to ensure large customers contribute more to grid connection costs. Additionally, Pennsylvania has begun requiring data center projects seeking state incentives to disclose their projected electricity and water consumption, along with plans for minimization.