By Kristen Walker

In a notable move at the State of the Union, President Trump announced, “We’re telling the major tech companies that they have the obligation to provide for their own power needs.”

Several Big Tech players incidentally will meet at the White House this week to sign an agreement to build their own electricity supply. Data centers have become the whipping boy of high electric bills; consumers believe they are paying higher rates because of these power-hungry server farms.

However, it is not that simple. Plenty of other variables factor into electricity rates, making it difficult to point the finger directly at data centers. If anything, data suggests otherwise.

Take Virginia and Texas, which lead the pack and together account for one-fourth of all U.S. data centers, at 663 and 405, respectively. According to the U.S. Energy Information Agency, the average residential electricity rate in Virginia is 15.94 cents/kilowatt hour (kWh) and Texas is 16.04 cents, both of which are below the national average of 17.24 cents/kWh.

Loudoun County, Va., — considered the Mecca of data centers — has experienced a modest rate increase recently, but Dominion Energy asserts the cost is “largely attributed to inflationary pressure, not the demand of data centers.” Labor, equipment and materials prices have increased. The county’s 14.25 cents/kWh is still well below the national average.

On the flip side, California’s average 34.71 cents/kWh consistently ranks as the highest electricity prices in the continental U.S. Their number of data centers is roughly half of Virginia’s: 320.

Most Northeast states also consistently rank in the top 10 for electricity rates. Yet their data center counts pale in comparison to the top dogs: Connecticut (61), Maine (eight), Massachusetts (49), New Hampshire (10), New York (142), Rhode Island (seven) and Vermont (three).

Why do all these states suffer not only from soaring electricity costs but rates that have increased much faster than the national average?

State Policies Contribute to Higher Prices

State policies and decisions have much more to do with electricity prices than simply load growth. Most states referenced above have ambitious standards that eventually require 100% power generation from renewable energy. The Northeast states participate in the Regional Greenhouse Gas Initiative, which regulates energy sources, as well as have policymakers who block natural gas pipeline infrastructure. These actions contribute to higher electricity prices for consumers.

The math doesn’t exactly compute for a correlation between data centers and electricity prices. So far.

A Virginia state-commissioned report that found residential ratepayers were not subsidizing costs for larger users also says that scenario could change unless mitigated. It asserts that significant new generation and transmissions will need to be built, energy demand will outpace supply and heavier reliance on imported power is susceptible to spikes in energy market prices.

But all that remains to be seen, especially in the other 49 states. After all, Virginia is home to an impressive 663 data centers (and counting) and has yet to experience rate increases because of them.

It does not, however, negate the reality that communities continue to worry about paying for data centers’ energy use. Data center operators no doubt hope to mitigate some of the public’s concerns by building off-grid.

As more state legislation designed to pause, slow or deter data center construction increasingly materializes throughout the country, Big Tech must proactively secure sufficient power for these warehouses. Moratoriums and delays would be a death sentence for the AI race. And it is unfair to sideline the industry. Needing to get on-line sooner rather than later, data centers don’t have time for politics or the ever-growing interconnection queues.

Many hyperscalers are past waiting; they’ve already begun producing their own electricity.

Operators Seeking Alternative Energy Supply

Operators increasingly are using natural gas, solar, batteries and fuel cells to supply their power, with the latter constituting the fastest‑growing off‑grid option. The 90-day installation and nearly 100% reliability are enticing one in three data centers to go off-grid by 2030.

Modular natural‑gas turbines and reciprocating engines also are growing in popularity. Resembling small power plants collocated with the data center, these systems can be deployed within weeks or months.

Multiple Big Tech companies even announced plans to go nuclear, through either revitalizing nuclear plants or incorporating small modular reactors.

With today’s political climate, regulatory barriers, time constraints and affordability concerns, in-house energy generation makes sense. Data centers are embracing self‑generation as a core part of their expansion strategy. They are now actively building off‑grid and self‑powered data centers, signing federal pledges to do so and investing in dedicated generation at a scale that resembles private power grids.

The combination of AI‑driven load growth, interconnection delays and political pressure is making self‑supply the new default model for hyperscale expansion. It is a win for tech companies, utilities, politicians and consumers.

Kristen Walker is senior policy analyst and manager for energy and transportation with the American Consumer Institute, a nonprofit education and research organization.