With West Virginia poised to attract new data centers, electric ratepayers will likely see their energy bills continue to climb.
This spring, the state passed the Power Generation and Consumption Act, enabling data center operators to create microgrids, offsetting at least some of the impact on the power supply. As part of the PJM Interconnection, a regional grid covering 14 states, West Virginians are affected by electric demands in other areas. Rising electric rates are a national phenomenon.
David Hill, executive vice president of energy for the Bipartisan Policy Center, said it is about more than big data.
“Not only big data centers, it’s increased home electrification, electrification of vehicles, population growth, more manufacturing activity,” Hill outlined. “The truth is, the demand can be added to the system faster than the new generation supply and the new transmission lines can be added.”
A 2022 study found West Virginians were paying the third-highest electricity costs as a percentage of household income.
The Trump administration’s budget reconciliation bill cut clean energy incentives established by the Biden-era Inflation Reduction Act and bipartisan infrastructure bill. Experts now estimate it will reduce projects for new clean power-generating capacity by more than 50% by 2035.
Hill argued consumers are hurt when the government stops fully-permitted projects.
“You need more regulatory certainty,” Hill emphasized. “Canceling projects or canceling permits for projects that were already permitted, that introduces uncertainty into the system that just raises consumers’ costs.”
A study of the impact of the budget reconciliation bill shows the law will increase household energy costs from 2% to 4% by 2035.
After a decade of low growth in power usage, a recent boom in manufacturing and AI data centers has shifted forecasts of energy demand sharply higher. U.S. grid operators anticipate by 2030, power generation capacity in some regions may fall below “reliability margins,” or the backup supply needed to handle spikes in demand, which increases the likelihood extreme weather will cause rolling blackouts.
Hill stressed policymakers need to act fast.
“The thing that can be done, and that there’s a lot of interest in these days, is to improve the permitting system that allows for new electric power facilities, both generation and transmission, to be permitted and built faster,” Hill contended. “That’s something that we actually need to address, and address quickly.”
Experts said unreliable electric grids could lead to some regions missing out on economic development opportunities.
