This summer, Americans are feeling the pinch as electric bills rise, and independent analysts predict staggering residential-rate increases of 30 to 60 percent by 2030 due to the growing demand from artificial-intelligence data centers. The time to address this situation is now.
A recent capacity auction reveals a dramatic increase in clearing prices—spiking more than tenfold in just two years—largely driven by data-center demand, which accounts for over 90 percent of the load growth in the grid system. Utilities are now faced with the monumental task of meeting this unprecedented demand, which will necessitate billions in new transmission and generation infrastructure. Unfortunately, these costs are likely to be passed on to consumers, culminating in higher electricity bills.
While AI isn’t inherently the problem, federal climate policies from 2009 create substantial obstacles. The EPA’s 2009 Endangerment Finding determined that greenhouse gases—including carbon dioxide—pose a threat to public health and welfare, and it supports EPA regulations that now impose strict CO₂ controls on long-standing coal units and most new baseload gas plants. This effectively delays the deployment of affordable, reliable energy sources capable of meeting the rising demand. Reversing this finding might be the most effective step policymakers can take to avoid an electricity-cost crisis related to AI revolution.
The Hidden Surcharge: EPA’s Endangerment Finding
Why can’t utilities respond to surging demand by using cheaper energy sources? The 2009 Endangerment Finding provides the legal foundation for EPA regulations, including costly requirements like carbon-capture-and-storage (CCS) mandates and accelerated retirement dates for fossil-fuel power plants. Legal experts describe the Endangerment Finding as the “critical block” of federal climate regulations; if it were removed, the complex network of greenhouse-gas rules—especially those impacting power generation—could collapse.
In fact, the EPA estimates that repealing current standards would save the power sector $19 billion in regulatory costs over twenty years starting in 2026, or about $1.2 billion annually. Recently, the EPA proposed rescinding the Endangerment Finding, projecting it could save Americans over $54 billion each year by ending the chain of climate rules it initiated. Removing the CCS mandates alone could cut approximately $19 billion in costs over twenty years, which equals about $1.2 billion in savings beginning in 2026.
How The Finding Inflates Your Bill
EPA’s data suggests that mandatory CCS hardware and pipelines can inflate the capital costs of a combined-cycle gas plant by $800 to $1,600 per kilowatt. This additional expense translates to about 1.5 cents per kilowatt-hour in retail rates. Moreover, compliance deadlines embedded in the rule could force nearly 60 gigawatts of functional coal and older gas capacity offline before 2035, precisely when AI demand is expected to peak. This induced scarcity impacts household budgets well in advance of actual plant retirements.
Dispatchable Fuels Are Still America’s Workhorses.
Natural gas remains a key player in the U.S. energy landscape, providing 43 percent of the country’s electricity, with combined-cycle units running at a 57 percent capacity factor last year. This demonstrates that natural gas plants are crucial for a grid under pressure.
Coal, while often criticized in climate discussions, still contributes 16 percent of electricity generation and serves as a reliable on-site fuel that keeps the lights on during extreme weather events. Federal policies, however, are accelerating the retirement of these assets faster than they can be replaced, which forces grid operators to rely on favorable weather conditions while coping with unprecedented demand from Big Tech.
Even within Silicon Valley, there’s acknowledgment of the looming crunch. Google has quietly agreed to pause non-essential AI workloads in Indiana and Tennessee during grid strain, recognizing that current infrastructure is insufficient for its ambitions. If even the most prosperous tech companies can’t guarantee continuous power for their AI initiatives, why should average families subsidize the necessary upgrades?
Repeal Is The Ratepayer’s Relief Valve
Repealing the Endangerment Finding stands as the relief valve that consumers desperately need. This process isn’t about deregulating AI; data centers will still pay market prices for electricity. What it will enable is allowing utilities to opt for the most efficient and cost-effective dispatchable technologies without incurring added CO₂ taxes. This change could considerably lessen electricity production costs, allowing utilities to work more effectively and pass those savings onto consumers.
EPA’s repeal proposal will face legal challenges and political headwinds, but lawmakers do not have to sit on the sidelines. They can codify the repeal, bar the agency from re-imposing CCS mandates through backdoor rulemakings, and restore a simple principle: energy policy should serve the people who pay the bills, not the industries that create them.
America can power an AI revolution and keep kitchen-table costs under control. It starts by pulling one regulatory brick—the Endangerment Finding—so the rest of the wall comes down and affordable electrons can flow again.
Melanie Collette is senior policy analyst for the Committee For A Constructive Tomorrow (CFACT).
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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