Soaring summer heat, an explosion of AI data centers, a crumbling electrical grid, and a shrinking pool of skilled workers are all driving up electric bills—and making power outages more likely than ever across North America. Experts warn that these pressures aren’t going anywhere fast, with higher costs and greater risks expected to stick around for at least the next decade.
Higher Temperature = Higher Risks
The North American Energy Reliability Corporation’s (NAERC) 2024 Long-term Reliability Assessment (LTRA), which was updated last month, states that “… well over half of the continent is at elevated or high risk of energy shortfalls over the next 5 to 10 years.”
NAERCO is an international body charged with ensuring the reliability and security of the bulk power system in North America.
Global warming is increasing temperatures year-round, according to the National Oceanic and Atmospheric Administration (NOAA). That means winter temperatures are getting warmer, which reduces heating costs. However, those savings will be more than offset by hotter summer temperatures, which trigger higher cooling costs.
“As a result of higher temperatures, economists estimate that net energy costs to consumers will increase by 10 to 22 percent,” according to NOAA.
Development of AI Data Centers & Energy Use
The classic answer to the question, “Is it hot enough for you?’ is: “It’s not just the heat. It’s the humidity.”
And, regarding rising electric costs – it’s not just the heat. It’s also the rapid development of Artificial Intelligence (AI) data centers.
In a study released in April, the International Energy Agency (IEA) detailed the double-edged sword AI presents in relation to the developing energy crisis. The IEA provides policy recommendations, analysis, and data to its member countries on the global energy sector. The United States is a member.
“Global electricity demand from data centres is set to more than double over the next five years, consuming as much electricity by 2030 as the whole of Japan does today,” said IEA Executive Director Fatih Birol. “The effects will be particularly strong in some countries. For example, in the United States, data centres are on course to account for almost half of the growth in electricity demand; in Japan, more than half; and in Malaysia, as much as one-fifth.”
Furthermore, the IEA report predicts that U.S. data centers will devour more electricity than the combined electricity consumption of aluminum, steel, cement, and chemical manufacturers.
AL Potential to Solve the Problem
That AI data centers will drive up electricity demand is a certainty, reports the IEA. However, there is hope that the technology may also help solve the problem.
AI can be used to reduce overall energy use. It can optimize energy consumption in targeted areas, improve grid management and aid in the development of more efficient energy technologies such as batteries and solar. Nonetheless, the greatest obstacle to using AI for energy efficiency may be us.
“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” Dr Birol said. “AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it.”
Big Beautiful Higher Energy Bill
Counting on the U.S. government to use AI technology to reduce energy costs may be a faint hope.
President Donald Trump campaigned in part on cutting utility bills in half in his first 12 months back in the White House. However, his One Big Beautiful Bill Act (OBBBA), signed into law on July 4, will actually increase energy costs, according to a nonpartisan research group, Energy Innovations (EI).
The measure repealed many clean energy and renewable incentives. Those incentives were primarily tax breaks for wind and solar projects. Additionally, energy-efficient home improvement and new home construction credits were discontinued. While funding for agricultural and forestry conservation has been delayed.
Conversely, OBBBA expands oil and gas leasing on public lands and reduces the rates oil companies pay the government to drill for oil on those lands.
Higher Rates on the Way
The Trump law will reduce the nation’s electrical capacity and increase your electric bill, according to EI.
The nation’s capacity to produce energy will drop by 340 gigawatts by 2035, reports EI. That will result in a 25 percent hike in wholesale electricity prices by 2030 and a 74 percent increase by 2035. For you, that means a 9 to 18 percent increase in your electric bill.
Many Americans are already struggling with high energy bills. Over one-third (34.3 percent) of those participating in a LendingTree survey reported cutting back or skipping payments for necessities to cover their utility bills in 2024. Those necessities include food and medicine. Additionally, 23.4 percent were unable to pay part or all of their utility bill, while 22.8 percent reported keeping their home at an unhealthy or unsafe temperature.
Mounting Pressures on the Grid
Even if AI data centers were not elevating electricity demand, the nation’s capacity to meet future needs would be challenging.
The Department of Energy (DOE) reports that 70 percent of the nation’s transmission lines are over 25 years old. In addition, 55 percent of transformers are over 33 years old. As a result, many parts of the grid are working longer than intended. That, and increased demand variables, especially peaks, increase the risk of outages.
Other difficulties include an aging workforce. About 25 percent of electrical and natural gas utility workers will be retirement age within the next five years, according to DOE.
Greater Cost Than Electric Bill
Soaring temperatures and other causes of increased electrical use not only take a financial toll – they can be life-threatening.
Last summer was the hottest on record, according to NASA, and this summer is expected to come close to matching it. With greater heat comes an increase in more extreme weather events. Right now, much of the country is under a heat dome. Conditions are especially harsh on the East Coast, where heat indexes are reaching 115 degrees.
Heat-related deaths have been on the rise over the last seven years, with 2023 setting a new record – 2,235 people died from oppressive temperatures. However, the toll could be much higher. A Scientific American article notes that official “counts rely on death certificates filled out by coroners, medical examiners and other doctors, who often don’t consider heat’s potential lethality before certifying cause of death.”
The risk of severe illness or death from extreme temperatures is greatest among disadvantaged Americans, according to the Center for American Progress (CAP). That includes low-income, elderly, and people with chronic conditions.
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