According to data from Goldman Sachs, U.S. electricity prices are projected to increase by 6.9% year-over-year in 2025, which is more than double the overall inflation rate of 2.9%.

The firm states that data centers will account for 40% of the growth in electricity demand, and electricity prices are expected to continue rising until 2030. This trend is anticipated to reduce disposable income, weigh on consumer spending, and cause a slight slowdown in economic growth over the coming years.

Analysts note that due to a surge in power demand from artificial intelligence data centers and slow growth in electricity supply, American households are unlikely to see relief from rising electricity costs in the near term. They project household electricity prices will rise an additional 6% by 2027, with the pace of increase slowing to 3% in 2028 as natural gas prices decline. Goldman Sachs estimates this will reduce consumer spending growth by 0.2 percentage points and slow economic growth by 0.1 percentage points before 2027.

However, the trajectory of electricity prices will vary significantly across different U.S. regions due to differences in market structures and regulatory policies.

Manuel Abecassis, an analyst at Goldman Sachs, indicated that lower-income households are likely to experience a greater drag on their income and spending, as electricity bills constitute a larger portion of their expenses. He also noted that households in regions with a high concentration of data centers will face a larger impact.

The analysts further stated that as businesses pass on higher costs to consumers, the core inflation rate is expected to increase by 0.1 percentage points before 2027 and by 0.05 percentage points in 2028.

The rapid expansion of data centers is clashing with constrained power supply, as regulatory barriers, labor shortages, and material shortages make it difficult to build new power plants. This supply-demand tension will push up wholesale electricity prices, particularly in California, the Midwest, and the Mid-Atlantic regions. Utility companies are investing more in infrastructure to meet demand, and these costs will ultimately be passed on to consumers.

The role of the AI industry in driving electricity price inflation has become a major political issue ahead of the midterm elections in November. Democrats Miki Sherill and Abigail Spanberger won gubernatorial races in New Jersey and Virginia last year, partly by pledging to control utility bills. While former President Trump views the AI industry as an engine of economic growth, he increasingly sees rising electricity prices as a threat to Republican political fortunes. In January, Trump secured a commitment from Microsoft that its data centers would not drive up electricity costs.

Last month, the White House also signed agreements with several states requiring technology companies to fund new power plants for PJM Interconnection, the largest U.S. power grid.

Data centers are having a particularly significant impact in the PJM market, which covers 13 states primarily in the Mid-Atlantic and Midwest. Data from Monitoring Analytics shows that power supply costs in the PJM market have surged in recent years, with $23 billion associated with data centers—costs that are ultimately borne by consumers. In a letter to PJM in November, the agency described this as equivalent to a "massive wealth transfer."