Natural Gas Expansion Raises Rural Electricity Cost Concerns
U.S. natural gas power development is accelerating, but equipment delays, grid constraints, and rising financing costs could keep electricity prices elevated for rural consumers. This is particularly due to increasing demand from data centers and artificial intelligence infrastructure. New plants face turbine shortages, congested interconnection queues, and higher construction costs.
U.S. natural gas power development is accelerating to meet surging demand from sectors like data centers and artificial intelligence infrastructure, according to RFD News from Nashville, Tenn. Energy economist Teri Viswanath of CoBank notes that while projects are announced, actual capacity may lag demand due to various obstacles. S&P Global projects data center electricity use to jump from 76 gigawatts in 2026 to 134 gigawatts by 2030, putting immense pressure on the grid.
New gas-fired power plants face significant hurdles, including turbine shortages, congested interconnection queues, limited pipeline access, and escalating construction costs. These barriers are expected to tighten reserve margins and could lead to scarcity pricing during peak demand periods. Electric cooperatives may also experience pressure as large industrial customers, such as data centers, seek faster grid connections.
CoBank suggests strategies for electric cooperatives to mitigate the impact on households, such as diversified power purchasing, staged investments, effective load management, and rate structures that assign costs to larger users. Rural communities are closely monitoring the progression of proposed power plants, the expansion of fuel and transmission infrastructure, and how utilities ultimately distribute the associated costs among agricultural, residential, and new industrial loads.