By Utility Dive
Concerns over rising electricity bills will guide changes in AI data center development, particularly around how they are powered, but are unlikely to slow the overall expansion and need for grid resources, analysts from Bank of America said in a Thursday report.
“The main risk to regulated utilities in 2026 likely will be affordability pressure as capital expenditures have accelerated customer bill increases in a political backdrop focused on affordability issues into the 2026 midterm elections,” wrote Ross Fowler, a research analyst at BofA Securities.
Three dozen states will elect a governor this year, and elections last year in New Jersey and Virginia have demonstrated “voter angst around inflation in utility bills,” Fowler wrote. “We’d expect more of the same this year.”
Immediately after taking office in January, New Jersey Gov. Mikie Sherrill, D, signed executive orders seeking to freeze electricity cost increases, issue bill credits and increase distributed energy resources, including utility-scale solar and battery storage.
“Data centers looking to invest in Arizona today are being forced to choose between waiting in an uncertain line for electric service that may not come for a decade or more or planning to solve their own problem by developing behind the meter generation. More and more, behind the meter generation is looking like the only predictable way for data centers to get timely service. I expect this option to grow exponentially over the next several years.”
-Court Rich, Rose Law Group co-founder and the firm’s director of energy & utility infrastructure
