AI Is Driving Up Energy Demand—And Homeowners Could See the Cost on Their Power Bills

Artificial intelligence is changing the world at breakneck speed—powering everything from virtual assistants to self-driving cars to life-saving medical breakthroughs. But behind the scenes, that innovation is coming with a hefty price tag, and it’s not just the tech giants who are picking up the tab.

Across the U.S., data centers—the beating heart of AI—are using more and more electricity, and as the demand rises, so do power prices. For homeowners, that could mean higher monthly bills, even if they’ve never typed a single prompt into an AI chatbot.

Let’s break down what’s happening, what it means for your budget, and how you can stay one step ahead.

AI Might Be the Future—But It’s Driving Up Your Power Bill Today

The numbers don’t lie. According to the U.S. Energy Information Administration, the average residential electricity rate in the U.S. jumped 6.5% between May 2024 and May 2025. That may not sound like much on paper, but it adds up—especially in states where the increase has been dramatic.

Take Maine, for instance, where electricity rates surged 36.3% in just a year. Utilities there blame it on severe storms and infrastructure damage. Still, the broader trend is clear: more and more data centers are coming online, and they’re hungry for energy.

These centers—giant warehouses filled with servers—run 24/7 and require constant cooling to keep machines from overheating. They support everything from your Netflix queue to ChatGPT’s brain (hi and their expansion has exploded due to rising demand for AI models, cloud computing, and digital storage.

States leading the charge in electricity delivery to data centers include:

• Virginia (electricity rates up 3.1%)
• Texas (4.4% increase)
• California (1.9%)
• Illinois (12.2%)
• Oregon (5.5%)

And as utilities race to upgrade grids and add capacity, they’re starting to turn to regulators with one request: raise residential rates to help cover the costs.

What That Means for Homeowners

Aaron Wright, CEO of Solomon Group and climate-tech firm Solomon e3, has been watching this trend closely—and he’s not sugarcoating it.

“As utilities race to meet AI-driven energy demand, infrastructure costs are rising, and those costs are passed [on] to everyday ratepayers,” Wright says.

It’s not just a bump in your summer A/C bill. According to a recent report from the Jack Kemp Foundation, average consumers and small businesses could see their electricity bills rise by as much as 70% by 2029—much of it tied to surging energy demand from AI-related infrastructure.

That could hit low- and middle-income families the hardest, especially in places like Texas and California, where extreme weather and AI expansion collide. There, peak-time surcharges can make already high bills even steeper.

“For too many families, energy is already becoming a luxury,” Wright warns. “Without bold action, the gap between who can afford comfort and who can’t will only grow.”

How to Fight Back Against Rising Energy Bills

The good news? Homeowners aren’t powerless. Experts say there are plenty of practical steps you can take to reduce your electricity use—and even earn some savings back.

Here’s how to get started.

1. Get Smart With a Thermostat

If you haven’t already installed a smart thermostat, now might be the time.

“Smart thermostats are one of the easiest ways to reduce energy costs without sacrificing comfort,” says Paul Hines, VP of Power Systems at EnergyHub.

These devices can automatically tweak your home’s temperature by just a few degrees during peak hours—small changes that can lead to real savings. Some utilities even offer bill credits or rebates for participating in energy-saving programs.

2. Shift When You Use Power

Many power companies now offer time-of-use (TOU) pricing—cheaper electricity rates during off-peak hours.

That means simple changes like:

• Running the dishwasher after 9 p.m.
• Doing laundry early in the morning
• Pre-cooling your home before the afternoon heat kicks in

can lead to lower monthly bills over time.

3. Upgrade Appliances and Lighting

Swapping out that ancient fridge or washing machine for an Energy Star model might seem pricey upfront—but the savings are real.

“Replacing inefficient HVAC systems or outdated hot water tanks can have an even bigger impact,” says Hines.

LED lighting, power strips that cut standby power, and efficient kitchen appliances can all help chip away at your total energy use.

4. Seal Up and Insulate

Drafty windows and leaky ductwork don’t just make your home uncomfortable—they drive up your bills. Upgrading insulation and sealing air leaks can dramatically reduce how much heating and cooling your home needs.

“It all helps your HVAC system work less, which lowers energy use and extends the lifespan of your equipment,” says Hines.

5. Go Solar (If You Can)

Yes, solar panels and battery storage can be expensive, but depending on where you live, the investment may pay off—especially in high-cost energy states or areas with frequent blackouts.

Batteries can store energy for later or help you use electricity when it’s cheapest. And there are often rebates and tax credits available to soften the upfront cost.

Conclusion

AI is here to stay—and it’s going to keep growing. That means energy demand isn’t likely to slow down anytime soon. While you can’t stop new data centers from popping up in your state, you can take steps to protect your wallet.

Smarter energy choices, efficient home upgrades, and paying attention to when you use electricity can all help keep your monthly bill from getting out of hand.

And who knows? The same AI that’s driving up energy use might just help you manage it better—if you know how to plug into the right tools.