President Donald Trump’s pledge to expedite permits for data centers, which is aimed at luring tech billionaires and supercharging the country’s artificial intelligence (AI) industry, could lead to higher electricity bills and mortgage rates for homeowners, experts and industry leaders have warned.
Why It Matters
Energy-intensive data centers are multiplying across the country to keep pace with AI-driven technology. While this could accelerate tech sector growth, it may strain utilities and housing costs for millions of Americans.
Residential electricity prices have surged in states with heavy tech investment. In Utah and Illinois, costs have jumped by 15 percent and 14 percent respectively as of June, according to the U.S. Energy Information Administration (EIA).
Meanwhile, the average price of residential electricity increased 6.5 percent from 16.41 cents per kilowatt-hour to 17.47 cents between May 2024 and May 2025, the EIA reports.
What To Know
Last Thursday, Trump invited the leaders of the tech industry to a White House dinner, featuring Meta CEO Mark Zuckerberg, Microsoft founder Bill Gates, OpenAI CEO Sam Altman, and AI and crypto czar David Sacks.
At the dinner, the president promised them that the resources needed for tech expansion would be made available, saying, “I know everybody at the table indirectly through reading about you and studying, knowing a lot about your business, actually making it very easy for you in terms of electric capacity and getting it for you, getting your permits.”
Data centers already consume about 4.4 percent of total U.S. electricity, a figure projected to double or even triple by 2028, according to the Department of Energy’s Lawrence Berkeley National Laboratory.
An average midsize data center typically uses 300,000 gallons of water daily, which is roughly comparable to the same water consumption from 1,000 households in the same timeframe.
In 2025, data centers in Texas alone are projected to use 49 billion gallons of water, enough to supply millions of households, primarily for cooling massive banks of servers that power generative AI and cloud computing.
Texas also ranked as one of the most expensive states to pay electric bills, with an average monthly bill of $174.59, the fourth highest in the country.
California, another extremely tech-friendly state that invites large investment in AI development, also reported high electricity bills in 2025, with the average bill from June clocking in at $164.50 a month.
Homebuyers are also seeing higher mortgage rates since data center buildouts take trillions in capital, Realtor.com reported, adding that those trying to sell their homes are “trapped by the mortgage lock-in effect.”
What People Are Saying
David Conn, vice president and head of business and development at utility software company Exceleron, told Realtor.com: “Utility prices are rising across the board, partly due to higher energy demand from data centers and partly from extreme weather, growing electrification, and the need to upgrade aging infrastructure.”
Aaron Wright, CEO of Solomon Group and Solomon e3, a climate tech company focused on equitable energy solutions for underserved communities, told Realtor.com: “As utilities race to meet AI-driven energy demand, infrastructure costs are rising and those costs are passed [on] to everyday ratepayers.”
Zoe Gamble, CEO of CleanChoice Energy, told Realtor.com: “Clean energy is in an arms race with AI, and the U.S. is entering a period where power generation can’t keep pace with demand. When we have more demand than generation, the grid starts failing. As more data centers are built to accommodate AI and other data-intensive processes, our grids are being pushed to their breaking point.”
What Happens Next?
The EIA projects retail electricity prices for residential customers will rise another 6 percent next year. Meanwhile, utilities are preparing for grid upgrades, and some cities are debating whether to slow or limit new data center permits.
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