AI's Power Bill Comes Due

Electricity prices jumped 6.9% in 2025 year over year, more than double the headline inflation rate of 2.9% , according to Goldman Sachs. The AI boom was supposed to make everything cheaper. Instead, it's making your power bill more expensive.

Data centers accounted for 17% of electricity demand growth worldwide last year, according to the IEA report, compared with around 50% in the U.S. That's not a typo. Half of all new American electricity demand came from warehouses full of GPUs training large language models. A January 2026 report by Bloom Energy predicts that U.S. data centers' total combined energy demand will nearly double between 2025 and 2028, jumping from 80 to 150 gigawatts — like adding Spain's entire electricity consumption in three years. MarketWatch reported that the AI boom is now actively contributing to inflation, not reducing it as proponents once promised.

Can the Grid Keep Up?

The answer arrived Monday in the form of an emergency order. The PJM Interconnection will be able to curtail data centers and other large loads that have backup generation under an emergency order issued May 18, 2026, by the U.S. Department of Energy , Utility Dive reported. PJM on Sunday asked for permission to curtail those facilities if needed for three days starting May 18 because of hot weather combined with planned power plant maintenance outages. PJM said it expected to have less than 5,800 MW of reserves during its May 18 peak, and that Maryland and Virginia could be especially stressed by the unseasonably hot weather .

This wasn't theoretical planning. It was a near-miss. PJM — the nation's largest grid operator, serving 67 million people across 13 states — came within hours of having to choose between cutting power to data centers or risking rolling blackouts for households. The grid operator activated demand response customers and issued maximum generation alerts, according to Utility Dive.

The structural problem is simple: Starting in summer 2026, PJM will have just enough power to keep the grid reliable. Data centers are connecting to the grid faster than we can build new power supply , according to analysis from the Natural Resources Defense Council. PJM market capacity prices increased 10× from $28.92 to $329.17 per MW-day between the 2024/25 and 2026/27 planning years, directly attributable to data center demand , according to industry analysis.

Areas with high concentrations of data centers saw electricity prices jump 267 percent over the past five years , Bloomberg reported. In 2024, data centers accounted for almost 40 percent of all electricity used in Virginia, according to the same analysis.

Who Pays for AI's Infrastructure?

NextEra Energy has an answer: consolidate. NextEra Energy will buy Dominion Energy in an all-stock deal valued at nearly $67 billion, the companies announced Monday , CNBC reported. The combined company would serve about 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina, and own 110 gigawatts of generation from a wide array of energy sources , according to Axios.

The timing is no coincidence. Dominion is the utility that powers the world's largest data center market in northern Virginia , CNBC noted. The deal targets 30 GW of new generation capacity dedicated to hyperscaler data centers by 2035 , according to market analysis. The two companies' combined construction backlog of 130 gigawatts exceeds their existing power generation , Fortune reported — enough electricity to power 100 million homes out of roughly 150 million in the entire U.S.

The merger marks one of the largest utility transactions in years and reflects growing Wall Street expectations that electricity providers could emerge as major beneficiaries of the AI boom as power demand rises for the first sustained period in decades , according to Fox Business. Other recent industry transactions include Constellation Energy's $16 billion acquisition of Calpine, Blackstone's $11.5 billion deal for TXNM Energy and AES Corp.'s pending $33.4 billion buyout .

But ratepayers are already feeling the squeeze. NextEra said it plans to provide $2.25 billion in customer bill credits across Virginia, North Carolina and South Carolina following the deal's completion — a tacit acknowledgment that bills are rising fast enough to require political cover.

What About Space?

If you can't build data centers fast enough on Earth, why not orbit? Jeff Bezos thinks the timeline is ambitious but inevitable. In March, Blue Origin submitted plans to the Federal Communications Commission to send 51,600 data center satellites into low Earth orbit, as part of an initiative dubbed "Project Sunrise" , CNBC reported. SpaceX's plan involves launching up to one million satellites to provide 100 gigawatts of AI computing capacity , according to industry filings.

The pitch is elegant: These data centers would operate as networks of thousands, or even millions, of spacecraft circling the planet that receive and compute data on board, powered by constant energy from the sun , Bloomberg reported. No grid constraints. No water for cooling. No angry neighbors complaining about noise and property values.

The reality is harder. Technology for cooling processors and communicating between spacecraft with powerful lasers will need to be developed and manufactured as cheaply as possible, while scientists are still determining how well advanced chips work on different tasks while exposed to the high radiation environment of space , TechCrunch noted. Space companies are racing to make data centers in orbit a reality, but artificial intelligence demand requires massive energy resources .

When asked about timelines, Bezos was characteristically measured. CNBC reported that he called the 2-3 year timeline for space data centers "a little ambitious" — but added that the technology is real and will likely happen faster than most people think.

What Changed This Week

The U.S. energy system crossed a threshold. For the first time, a major grid operator received federal authority to curtail data centers during emergencies, establishing a precedent that residential customers come first when power runs short. The nation's largest utility merger in years was announced explicitly to capture AI infrastructure demand. And two billionaire space entrepreneurs filed plans to launch hundreds of thousands of satellites to escape Earth's grid constraints entirely. AI's energy problem moved from forecast to crisis management.

What to Watch

PJM's emergency curtailment authority expires Wednesday, May 21, but the grid operator has formed a task force to explore permanent curtailment rules for large loads that interconnect before sufficient capacity exists. The NextEra-Dominion merger faces regulatory approval from FERC, the Nuclear Regulatory Commission, and state regulators in Virginia, North Carolina, and South Carolina — a process that could take 12-18 months and will test whether regulators prioritize scale or affordability. The EIA's June 9 Short-Term Energy Outlook will update electricity price forecasts as commercial sector demand continues outpacing residential growth. And Blue Origin's TeraWave constellation filing seeks approval to begin deployment in Q4 2027, which would mark the first step toward orbital computing infrastructure. The question is no longer whether AI will reshape energy markets. It's whether the grid can be rebuilt fast enough to keep the lights on.