Rising electricity demand from manufacturing and data centers could present a once-in-a-generation opportunity to modernize the electric grid, but rising electricity bills might make such investments politically unpopular.
“This is not a sexy topic,” said Charles Hua, executive director of PowerLines, a national energy consumer education nonprofit. “But it is so important in terms of just how powerful our grid is in empowering our modern economy, and just how dependent we all are on electricity.”
Midwestern states have long benefitted from lower energy bills than other regions due to public investments made in the first half of the 20th century and the availability of wind and solar energy. However, extreme heat and severe weather pose a consistent threat to the grid, which can be expensive to fix.
Anger toward data center development has drawn more attention to how the grid serves users, which advocates hope turns into an opportunity to both increase the supply of electricity, and keep rates affordable.
The way the electric grid is managed is designed to be abstract: Utilities determine rates under the purview of public utilities commissions, and utilities work with regional transmission organizations to transfer electricity across states.
The literal electric grid — the poles, wires, substations and transformers — is built on the infrastructure that first lit up Manhattan in 1882, so decisions made generations ago have ripple effects today.
Nationwide, utilities have requested $18.6 billion in rate increases so far in 2026, according to a report from PowerLines. The Midwest represents about $3 billion of that cost, affecting more than 14 million customers.
PowerLines conducted a poll with Ipsos, a marketing research company, on energy bills in March. Among Midwestern respondents, 73% said they noticed higher energy bills than last year, and 78% of respondents want elected officials to take action.
Other key findings from Midwesterners included:
- 41% are most frustrated by their lack of choice in utility provider and 39% are most frustrated by month-to-month fluctuations.
- 30% believe their utility offers them the most affordable rates they can.
- 30% believe that their state government does a good job protecting their interests when it comes to utility affordability.
- 82% feel powerless to control how much they are charged for utilities.
- 62% say utility bills add to their financial stress.
- 38% understand what drives the costs of their utility bill.
“The reality is that our grid and our utility regulatory system surrounding it has been really relatively unchanged since it started over 100 years ago,” Hua said. “I think it does raise the question of whether that century-old model is still working for us.”
Improving infrastructure to meet energy needs could cost about $1.4 trillion, Hua said, which is equivalent to building 2,000 Hoover Dams.
Uneven demand
Changes to your electric bill are due to a confluence of national, regional and local factors, as well as the decisions of your utility company. This makes diagnosing what’s behind a rate hike complicated.
Nationwide, retail energy prices are up by more than 30% since 2019; however, most of that growth is due to damage to infrastructure causing increased rates in California and the East Coast. Nominally, prices have generally tracked inflation, and real prices are down in a majority of states.
“But one of the big challenges that we’re seeing emerge is that for a lot of folks, electricity prices are too expensive,” Hua said. “Their utility bills are going up and up and up, and they don’t necessarily know why that’s happening, and one of the big drivers goes back to that phenomenon of a rapidly aging grid that is increasingly vulnerable to storms that cause a lot of damage to the grid, and that just costs a lot of money.”
The Lawrence Berkeley National Laboratory routinely analyzes trends in electricity prices. One of the study’s co-authors, Ryan Hledik, said the nation is at a crossroads.
“This is not a time for panic, but is definitely a time for us to be acting,” Hledik, a principal with the Brattle Group, said. With energy demand increasing year over year, supply-side decisions will eventually affect costs.
“There are two potentially very divergent outcomes that could be associated with that. If we don’t put the right policies and customer protections in place, it is possible that we will see electricity rates increase even at a faster rate than they have over the last five years or so. But if we have the right policies and programs in place, it is actually a big opportunity to address the energy affordability challenge that we’ve started to confront over the last few years.”
The supply chains that allow for grid updates haven’t recovered from COVID-era shocks, Hledik said, so utilities are unable to move quickly to install new hardware.
Utilities take different approaches to spread the cost of upgrading the grid among ratepayers. Most Midwestern utilities are investor-owned, and are beholden to stockholders to make a profit. Nebraska is an exception, as it is the only state in the nation completely run with publicly owned utilities.
Generally, utilities decide to spread out the cost of infrastructure upgrades over a period of years, but those price bumps hit people who are low and fixed income the most, Hledik said. With public scrutiny comes demand for more information.
“I suspect there’s going to be more burden of proof of the necessity of those investments that utilities will need to provide than maybe they did prior to some of the current concerns around energy affordability,” Hledik said.
Rising costs
Midwestern states are increasingly home to data center investments, because of the availability of land. Pew Research found that Midwestern and Southern states will see the most investment from data centers in the coming years.
Adding a data center would increase a utility's overall demand for electricity, which might require added infrastructure. It’s rare that rate hikes occur in a short amount of time, as utilities would have to justify the increase to the governing public utility commission.
Jacob Montgomery, a political science professor at Washington University in St. Louis, told The Midwest Newsroom in September that worries about rate hikes are hitting both sides of the aisle.
“On the left, there's concerns about the environment, water, energy, climate,” Montgomery said. “On the right, it's about property rights and local control and utility bills.”
Several counties in Nebraska have approved data center moratoriums, and Gov. Jim Pillen signed an executive order limiting tax incentives for data centers.
“My hope is that some of the moratoriums that we’re seeing right now are a deliberate pause to say, ‘Let’s figure this out and make sure we’re getting it right, and not just a knee-jerk reaction that demand growth is bad so let’s not do this at all,’” Hledik said.
But pauses in data center development may not stop power companies from preparing for demand from these facilities. St. Louis Public Radio reported that Ameren Missouri aims to ramp up power plant construction to meet data center electricity needs, according to a 20-year plan released in late September.
James Owen, executive director of Renew Missouri, told STLPR:
“Any time (electric utilities) build more generation, it's going to increase rates,” Owen said. “I don't know how they can say that, ‘Oh, this is [only costing] data centers,’ when that's the main thing driving energy consumption right now. It's not that we're having this huge influx of people moving into Missouri. It is not this huge influx of other manufacturing jobs. It's data centers.”
Powering the plans
A patchwork of independent service operators moves power across state lines and international borders. The National Transmission Needs Study was updated this summer and found that more than 4,000 miles of powerlines will need to be replaced in the coming decades.
The Midcontinent Independent System Operator, or MISO, covers 15 states and the Canadian province of Manitoba and also facilitates the buying and selling of electricity on a regional level. MISO expects to add an additional 15 gigawatts of summer capacity each year for the next five years.
McKenzie Barbknecht, a spokesperson with MISO, said that the diversification of energy sources has moderated prices, but it also complicates how the grid operates.
“For a long time, we relied on primarily coal plants across our region, and that has changed,” Barbknecht said. “Now we have a mix of natural gas resources as well as renewable resources — like solar, wind, battery storage — all of that fleet evolution has brought us to a place where it’s brought more challenge in operating the electric grid.”
Just as energy demand rises and falls with the workday, the fluctuating nature of renewable energy means grid operators need to adjust the energy mix. When a heat wave or a natural disaster occurs, MISO can divert power to different areas to meet demand.
“In real time, energy is moving constantly across this network of transmission lines that really spans the entire MISO region and certainly our neighboring RTOs as well,” she said. “So that happens within seconds.”
To the west of MISO is the Southwest Power Pool, which manages energy for 20 million customers across 17 states. With such a large footprint, SPP can take advantage of cheaper generation prices across the region.
“Our marketplace allows us to move that power around the grid where it’s needed, such that it levelizes prices regionally,” said Sunny Raheem, the director of system planning at the Southwest Power Pool. “That levelization of prices helps us keep energy prices low through the wholesale market.”
Lower population density also helps keep demand more manageable, so the spikes that occur on a day-to-day basis are less extreme than in urban cores. However, growth of manufacturing across the region has brought baseline demand up, Raheem said.
Building new infrastructure across the Great Plains is a major cost that requires cooperation, so the Southwest Power Pool allows public input throughout the whole process.
“We communicate, we collaborate publicly, and those are the ways that help us build that consensus before we hit that finish line, ” Raheem said.
Building supply
Seeing the pushback from communities, hyperscale computing companies have started working with utilities to fund new power plants to offset potential rate hikes by increasing demand. In early September, Pacific Gas and Electric Corp. announced a partnership to create a “virtual power plant,” or a network of batteries and other energy storage devices to allow for more power to be released on the grid when there’s a demand spike.
“As demand scales, our current electricity grid can bridge the gap — if we optimize it correctly,” said Amanda Peterson Corio, Global Head of Energy and Power at Google, in a news release. “This program unlocks the potential of local distributed energy resources to strengthen grid capacity and resiliency while delivering meaningful benefits for local communities.”
Nuclear power is also returning to the conversation, with TerraPower considering Kansas for a new nuclear reactor. In Iowa, plans are underway to restart the Duane Arnold nuclear plant near Cedar Rapids. Ameren Missouri is also considering building more plants, with a focus on natural gas.
Continuing investment in renewable energy remains a concern. A group of Iowa scientists released a joint statement in September calling on leaders to increase capacity without depending on fossil fuels.
“Rapidly rising electricity demand calls for every stakeholder — from ordinary Iowans, to tech industry leaders, to local elected officials and utility company executives — to advocate for and adopt cheaper, cleaner, and more efficient ways of generating electricity and to push back against roadblocks designed to selectively hinder renewable energy,” the statement said. “As our climate continues to change, further investments in wind and solar power in Iowa will pay dividends in less expensive electricity and better health for generations to come.”
Paying for power
There is a safety net for low-income Americans to keep the lights on. The Low Income Home Energy Assistance Program is a federal block grant that allows utilities to reduce their bills. People whose incomes fall under 200% of the federal poverty line qualify for the program. Across five Midwestern states, that accounts to more than 600,000 households, according to federal data.
Britton Gabel, the manager of advocacy solutions at the Omaha Public Power District, said that the utility has been doing more outreach to let people know they might be eligible for the program.
Gabel said heating assistance during the winter represents the majority of where those funds go. Individual states get to determine the rules. Some households qualify for weatherization assistance, which pays for repairs that improve a home’s energy efficiency.
“We have some ZIP Codes within our service territory where the average age of home is 116 years old, and so we know if we can weatherize some of those homes, we can help those households long term,” Gabel said.
The Midwest Newsroom is an enterprise journalism collaboration that includes Iowa Public Radio, KCUR, Nebraska Public Media, St. Louis Public Radio and NPR. There are many ways you can contact us with story ideas and leads, and you can find that information here. The Midwest Newsroom is a partner of The Trust Project. We invite you to review our ethics and practices here.
METHODOLOGY
Reporter Daniel Wheaton spoke to researchers, advocates and representatives with regional transmission operators to understand the challenges facing the electric grid. He reviewed existing research from the Lawrence Berkeley National Laboratory and other federal data sources to break down the challenges straining an aging grid.
REFERENCES
Factors influencing recent trends in retail electricity prices in the United States | The Electricity Journal, December 2025
Utility Bills are Rising Q2 2026 | PowerLines, 2026
Data center backlash unites some Missouri and Kansas towns against lawmakers and big tech | KCUR, Sept. 2, 2026
Three in four concerned their gas, electricity utility bills will increase this year | IPSOS, May 19, 2026
Most new data centers in the U.S. are coming to rural areas | Pew Research Center, April 13, 2026
National Transmission Needs Study | U.S. Department of Energy, 2026
Low Income Home Energy Assistance Program | U.S. Department of Health & Human Services, Sept. 29, 2026
TYPE OF ARTICLE
News — Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
