The Kobeissi Letter says US household electricity prices are near record highs as AI data centers drive up demand
US electricity prices are skyrocketing. The average price of US residential electricity has risen +11% since January 2025, to 19.6 cents per kilowatt-hour in August 2026, near an all-time high. Average prices during the first 8 months of 2026 were +40% higher than in the same period of 2019. The largest increase in residential electricity prices over this period was in Maine, at +90%, followed by California and New York, at nearly +70%. This comes as the AI boom is intensifying electricity demand, with data centers requiring enormous amounts of electricity to power thousands of chips and cooling systems. A 1-gigawatt data center can consume as much electricity as 800,000 homes. As a result, wholesale electricity prices in areas near significant data center activity surged by as much as +267% between 2020 and 2025. The AI revolution is driving a surge in electricity demand, and households are increasingly feeling the cost.
Context
Rising power bills have become a political issue for the AI buildout, since data center demand can push up costs for households nearby.
This is a secondhand summary from The Kobeissi Letter, a capital markets commentary account, and it does not link its sources. Some of its figures match federal data and an earlier Bloomberg analysis, while others could not be checked or appear inconsistent.
- EIA Electric Power Monthly: average price of electricity by sector
- Bloomberg: AI data centers are sending power bills soaring
- PolitiFact: How much have data centers increased electricity prices?
- Advance Intelligence: Business Insider reports Amazon is staging AI server racks because some data centers lack power
Deep dive
On October 20, The Kobeissi Letter posted that US electricity prices are skyrocketing. It said the average US residential price has risen 11 percent since January 2025 to 19.6 cents per kilowatt hour in August 2026, near an all time high, that average prices in the first eight months of 2026 were 40 percent higher than in the same period of 2019, and that Maine rose most at 90 percent, followed by California and New York at nearly 70 percent. It tied this to AI data centers, saying a 1 gigawatt site can use as much power as 800,000 homes and that wholesale prices near heavy data center activity rose as much as 267 percent between 2020 and 2025.
Checking against the Energy Information Administration, the federal energy statistics agency: its latest release, with data through July 2026, puts the residential average at 18.31 cents in July and 18.19 cents for 2026 so far, about 40 percent above the 2019 average of 13.01 cents, which supports that claim. EIA's August data is not due until October 23. The chart credits the Federal Reserve and the Bureau of Labor Statistics, which publish a different average price series, and it shows 19.4 cents rather than the 19.6 in the text.
The 267 percent figure comes from a 2025 Bloomberg analysis of wholesale prices at some grid points near data centers. PolitiFact noted that wholesale supply costs are only about 30 to 50 percent of a household bill, so the jump does not translate one for one.
What to expect next
Watch EIA's October 23 release for the official August residential price, which will show whether the 19.6 cent figure holds. Also watch state regulators and utilities, since rate cases decide how much data center costs reach households, and whether more states require data centers to pay for grid upgrades. Expect electricity prices to stay a central argument in debates over new AI data center projects.