Rising Electricity Costs & Data Centers: 2026 Election Impact

Rising Electricity Costs Loom Large Over 2026 Midterms

The affordability crisis facing American voters is increasingly defined by rising electricity rates, a trend poised to significantly influence the 2026 midterm elections. Average retail electricity revenues per kilowatt hour increased 7.1% in 2025, and projections indicate continued increases through 2026, according to the U.S. Energy Information Administration. The impact, however, is far from uniform, with states like Washington D.C. (26.3%) and Pennsylvania (18.9%) experiencing substantially higher rate hikes than others.

While multiple factors contribute to these rising costs – including infrastructure improvements, extreme weather events, and environmental mandates – the role of data centers is emerging as a particularly contentious issue. A growing chorus of voices, from politicians to consumer advocates, are pointing to the energy-intensive demands of these facilities as a key driver of price increases. Goldman Sachs reported in February 2026 that electricity prices jumped 6.9% in 2025, more than double the overall inflation rate of 2.9%, and anticipates data centers will account for 40% of electricity demand growth through the end of the decade.

Public concern is palpable. A recent Politico national survey revealed that nearly half of Americans anticipate data center energy costs becoming a campaign issue. A Pew Research Center poll further underscored this sentiment, finding that 38% of respondents view the overall impact of data centers on home energy costs as “mostly bad.” These concerns aren’t evenly distributed, however. Democrats (44%) are more likely than Republicans (33%) to perceive a negative impact from data centers on household energy expenses, reflecting broader partisan divides regarding economic development and environmental priorities.

Policy Responses and Political Positioning

The escalating costs are prompting a range of proposed solutions, from aggressive regulatory measures to outright moratoriums on data center construction. In New York, legislators are considering a bill to prohibit new data center construction for three years to allow for a comprehensive assessment of the risks. At the federal level, some are advocating for a “temporary pause” to evaluate the fiscal, energy, and environmental ramifications of these facilities. These proposals represent a significant shift in the political landscape, moving beyond simply acknowledging the problem to actively seeking ways to curb data center expansion.

Beyond moratoriums, there’s growing support for making data center developers directly responsible for the energy costs associated with their operations. President Trump’s “Ratepayer Protection Pledge” seeks to compel companies to fully cover these costs, and several large tech firms have publicly agreed to the commitment. Some states are exploring “large load” tariffs, which would impose higher electricity rates on heavy energy users like data centers and manufacturing plants, requiring them to cover the infrastructure costs they generate.

However, many candidates are framing the issue within a broader “affordability” crisis encompassing housing, food, and gasoline costs. While this approach may resonate with voters, it risks obscuring the specific challenges and potential solutions related to electricity rates and data center energy consumption. A nuanced approach, outlining distinct plans for each area, is crucial for effective policymaking.

A Bipartisan Issue with Shifting Political Dynamics

The issue of rising electricity rates is proving to be surprisingly bipartisan. In 2025, Democratic candidates successfully leveraged concerns over high electricity costs, blaming data centers for the increases, to gain traction in Virginia and New Jersey gubernatorial races. This momentum has extended to conservatives as well, with Florida Governor Ron DeSantis supporting an “AI bill of rights” designed to protect consumers from the costs associated with data centers.

As the 2026 midterm elections approach, candidates from both parties are increasingly vocal in their criticism of rising rates, attributing responsibility to wealthy tech companies and the energy demands of their data centers. This rhetoric taps into a broader “techlash” sentiment, fueled by public fears surrounding artificial intelligence and the perceived power of large digital firms. The Virginia Senate’s recent passage of a budget bill removing a $1.6 billion tax break for data center equipment is a clear indication of this shifting political climate. Public concern over electricity costs is expected to dominate campaign dialogue throughout the year and could prove decisive in determining electoral outcomes.