Electricity bills and data centres key challenges in US midterm elections

Electricity prices in the United States have increased by more than 10 per cent since 2024, according to government data. The rise has become a growing concern for households, especially as power costs are increasing faster than the prices of many other goods and services.

The issue is attracting attention ahead of this year’s midterm elections. Several politicians are promising to control electricity prices and challenge utility companies over their rising charges.

Rising electricity costs create public anger

Electricity bills have increased even faster in important political states such as Ohio, Michigan and Pennsylvania. These states are also seeing rapid growth in data centres, which require huge amounts of electricity to operate.

In some areas, electricity bills have increased at three times the rate of general inflation. This has added pressure on households already struggling with higher living costs.

Many candidates running for important state government positions have promised to take action against utility companies. Their proposals include stopping electricity rate increases and reducing the guaranteed profits that utility companies earn from their investments.

“It could be the first election to feature utilities and electricity, specifically, as a prominent issue in the midterms,” said Charles Hua, executive director of PowerLines, a nonprofit that advocates reforming utility policy to favour consumers. “Part of that is because people’s utility bills have gone up and up, and they don’t see any end in sight.”

Utility companies face pressure over spending

Electricity companies operate under strict government regulations in the United States. State regulators generally approve their spending plans and decide whether companies can recover these costs by increasing electricity bills.

Regulators also decide how much profit utility companies can earn from investments in electricity networks. These decisions directly affect the prices consumers pay for electricity.

According to a PowerLines survey, utility companies are expected to request around $31 billion in electricity rate increases this year. This would match last year’s record level, when spending was twice the previous record.

Meanwhile, investor-owned utility companies are expected to spend nearly $1.3 trillion over the next five years. This estimate comes from an analysis by S&P Global’s Regulatory Research Associates.

Ohio elections put electricity prices in focus

Electricity regulation has also become an important election issue in several states. Nine state public utility commission seats are being contested this year, including positions in Arizona and Georgia, where data centre development is growing rapidly.

Governors will also be elected in 36 states, and they have the power to appoint utility regulators in states where voters do not elect them directly. This gives governors an important role in decisions about electricity prices and company profits.

In Ohio, Democratic candidate Amy Acton has promised to reduce electricity bills if she becomes governor. Her campaign says she will appoint regulators who are “not beholden to utility companies” and work with the state attorney general against “excessive rate hikes and predatory practices.”

Government figures show that household electricity bills in Ohio have increased by more than 20 per cent over the past two years. Acton has also supported temporarily stopping new data centre development.

Her Republican opponent, Vivek Ramaswamy, has made a different promise. He says people living near data centres should not have to pay electricity bills.

Governors take action against rising bills

Some governors are already using their positions to put pressure on electricity companies. They are demanding lower costs and changes in the way utility companies justify their spending.

In April, Pennsylvania Governor Josh Shapiro announced that PECO Energy Company had agreed to withdraw its request to increase electricity rates. Shapiro, who is seeking re-election, said the decision could reduce future household electricity bills by up to $34 per month.

He later contacted other major utility company executives and called for changes in how they explain their spending plans and profits. His actions have brought further attention to the relationship between electricity companies, regulators and consumers.

“The governors are using this crisis on energy affordability as an opportunity to take a deeper dive into the utility regulatory model and see if it makes any sense,” said Jamie Van Nostrand, senior fellow at the Kleinman Centre for Energy Policy at the University of Pennsylvania and former chair of the Massachusetts Department of Public Utilities.

Electricity prices remained relatively stable for around a decade and were not a major issue in most elections. However, the situation changed last year when Mikie Sherrill won the New Jersey governorship after promising to freeze utility bills, a promise she acted on the day she took office.

Virginia has also taken steps to control household electricity costs. The state has the world's largest concentration of data centres, and Governor Abigail Spanberger has followed a similar approach to controlling bills.

Rising electricity prices are becoming a major political challenge in the United States. People want affordable electricity, while utility companies need money to expand and maintain their networks.

The rapid growth of data centres is adding another challenge because these facilities need large amounts of power. The midterm elections could push politicians to introduce stricter rules and demand greater protection for ordinary consumers.

The main question is whether governments can control electricity bills without slowing investment in energy infrastructure. Election results may also influence how the United States manages its growing demand for electricity in the coming years.

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