Data Center Backlash: $255/Month Bill Increases Swing Virginia and New Jersey Elections

December 12, 2025

December 2025 Update: Data center electricity costs became a deciding election issue in November 2025. Virginia Gov.-elect Spanberger won by 14 points promising data centers will "pay their fair share." PJM capacity costs surged 500% to $14.7B, with data centers responsible for $9.3B of the increase. Dominion projects $255/month residential bill increases by 2035.

TL;DR

Data centers have become a political liability. Voter anger over electricity price increases handed Democrats landslide victories in Virginia and New Jersey, with winning candidates promising to force data centers to pay more. PJM's capacity market data shows data centers drove $9.3 billion in cost increases that flow to residential ratepayers through a mechanism called capacity cost allocation. Infrastructure operators must now factor political risk into site selection, pursue self-supply strategies, and engage communities proactively.

What Happened

Democrats won landslide victories in Virginia and New Jersey in November 2025, as rising electricity bills dominated campaign debates.¹

Virginia Governor-elect Abigail Spanberger defeated Republican Lt. Gov. Winsome Earle-Sears by more than 14 points after promising data centers would "pay their fair share" of electricity costs.² In her victory speech, Spanberger declared: "We're going to produce more energy and we're going to lower energy costs... and make sure that data centers pay their fair share."³

Spanberger warned Virginia faces an "energy crisis," calling it "a real challenge that is pervasive in our communities, and particularly acute in southwest Virginia."⁴

The political shift reflects genuine economic pain. Wholesale electricity costs have increased as much as 267% over five years in areas near data centers, according to Bloomberg analysis.⁵ Those costs flow directly to residential customers. "Voters are mad as hell about energy prices increasing," said Virginia state Delegate Shelly Simonds. "And they're mad about affordability in general."⁶

Why It Matters for Infrastructure

Political Risk Is Now Real: Data center operators face a new variable in site selection. Jurisdictions with concentrated data center development may impose surcharges, special rate classes, or stricter permitting requirements as elected officials respond to voter anger.

Fair Share Policies Spreading: Virginia's incoming administration plans to shift policy toward having data centers "supply their own energy" and "pay their fair share."⁷ Dominion Energy already proposed a separate rate class with 14-year contracts and demand charges of 85% for transmission, 85% for distribution, and 60% for generation.⁸

Community Opposition Growing: Local resistance to data center development is intensifying beyond just electricity costs. Concerns include noise, water consumption, traffic, and visual impact. The political victories give these movements more leverage.

Cost Socialization Under Scrutiny: The traditional model where utilities spread infrastructure costs across all ratepayers faces a challenge. Lawmakers and advocacy groups want data center companies, not residential ratepayers, to shoulder costs of new transmission lines and power infrastructure.⁹

The Numbers: PJM Capacity Market

The PJM Interconnection, the nation's largest grid operator serving 65+ million people from the mid-Atlantic to Illinois, reveals the scale of data center cost impact.¹⁰

Why This Flows to Residential Bills: PJM runs annual capacity auctions where generators bid to provide power three years ahead. When data centers add massive new demand, the auction clearing price rises for everyone. Utilities pass these capacity costs directly to ratepayers through monthly bills. Data centers adding 5 GW of demand do not just pay for their own power; they raise prices for all 65 million PJM customers.

Capacity Market Cost Explosion

Data Center Attribution

Monitoring Analytics, PJM's independent market monitor, calculated that data centers caused 63% of the price increase in the 2025-2026 auction—translating to $9.3 billion in costs that will be recovered from customers across PJM.¹¹

Residential Bill Impacts

Unless changes occur, PJM consumers will pay an extra $100 billion through 2033 as new data centers exceed available power supply. By 2028, families could pay around $70/month extra on electricity bills.¹²

Virginia-Specific Projections

Dominion Energy projects residential bill increases of:¹³

Dominion's Integrated Resource Plan projects 100%+ increase in electricity usage over 15 years, primarily driven by data center growth.¹⁴ The utility has received customer orders that could double Virginia's data center capacity by 2028, with a projected market size of 10 GW by 2035.¹⁵

State-Level Price Acceleration

States with high data center concentrations saw electric bills climb faster than national averages:¹⁶

• Virginia: +13%
• Illinois: +16%
• Ohio: +12%
• New Jersey: +55% (2020-2025)

Policy Responses Emerging

Virginia Special Rate Class: The State Corporation Commission approved a new rate category for large energy users like data centers, with the goal of making them "pay more and commit to a 14-year contract, ensuring they'll pay for their requested amounts of electricity, even if they don't use it all."¹⁷

New Jersey Surcharge Proposal: Assemblywoman Andrea Katz introduced a bill to create a data center surcharge dedicated to grid modernization. "Our grid needs a lot of improvements, and those improvements are very, very expensive," she said. "They just need to contribute to the community in the same way that all the other businesses do."¹⁸

Self-Supply Requirements: Spanberger's incoming administration plans to require data centers to supply their own energy rather than rely entirely on grid power.¹⁹ This could accelerate on-site generation, PPAs, and behind-the-meter solutions.

What's Next

January 2026: Spanberger takes office in Virginia. Expect early legislative action on data center rate structures and energy policy.

Ongoing: Dominion's rate case with 14-year contracts and new demand charges awaits State Corporation Commission ruling.

2026 Midterms: Data center costs could emerge as a national issue. Congressional representatives in PJM territory face constituent pressure.

Industry Response: Expect accelerated investment in on-site power generation, nuclear PPAs, and energy storage to insulate against political and rate risk.

Can data center operators ignore voters who see their electricity bills doubling while tech companies report record profits?

Key Takeaways

For infrastructure planners: - Political risk now a material factor in site selection; avoid PJM concentration - Jurisdictions with concentrated DC development increasingly hostile to new projects - Special rate classes and surcharges spreading beyond Virginia to NJ, OH, PA - Self-supply requirements becoming standard; budget for on-site generation or dedicated PPAs - Screen sites for utility rate structures before committing to land

For operations teams: - Community relations increasingly critical - Monitor local political sentiment and rate proceedings - Document economic benefits (jobs, tax revenue) proactively - Prepare for potential demand charges and contract requirements

For strategic planning: - $100B in additional costs projected through 2033 across PJM - On-site generation and PPAs reduce political exposure - Diversified geographic footprint reduces concentration risk - Budget for rising power costs in long-term planning

References

For AI infrastructure deployment across diverse power markets, contact Introl.