Rising Electric Rates and Data Center Impact on 2026 Midterms

Brookings Regulatory Policy

Published March 20th, 2026

Detected March 28th, 2026

Summary

Brookings analysis discusses how rising electricity rates, partly driven by data center expansion, are becoming a key issue in the 2026 US midterm elections. Candidates are leveraging a 'techlash' to propose new taxes and tariffs on data centers in response to voter concerns about energy costs.

View original document View source feed page

What changed

This analysis from the Brookings Institution examines the political implications of rising electricity rates, particularly in the context of data center development, as a factor influencing the 2026 US midterm elections. The article highlights that some regions are experiencing annual electricity rate increases exceeding 25%, and that political pressure is mounting against data center developers. Candidates are reportedly using a growing 'techlash' to propose measures such as new taxes, construction moratoriums, and specific utility tariffs for large energy consumers.

While the article does not introduce new regulations or compliance requirements, it signals a developing political and public sentiment that could lead to future regulatory actions. Compliance officers in the energy and technology sectors, particularly those involved with data center operations or energy consumption, should monitor political discourse and potential legislative or regulatory proposals related to energy costs, data center taxation, and utility tariffs. The analysis suggests that voter perception links data center expansion directly to home energy expenses, indicating a potential area for future regulatory focus.

Source document (simplified)

Commentary

How rising electric rates could affect the 2026 midterms

Darrell M. West

Darrell M. West Senior Fellow - Governance Studies, Center for Technology Innovation (CTI), Center for Effective Public Management (CEPM), Douglas Dillon Chair in Governmental Studies

March 20, 2026

Rising electricity rates have emerged as a centerpiece of the 2026 “affordability” crisis, with some regions seeing annual increases of more than 25%.
Bipartisan political pressure is mounting against data center developers as candidates leverage a growing “techlash” to propose new taxes, construction moratoriums, and “large load” utility tariffs.
While experts debate the primary drivers of energy costs, recent polling shows a plurality of voters across party lines now view the expansion of data centers as a direct threat to home energy expenses.

An aerial view shows cooling vent fans on the roof next to generators on the lower level of a Digital Realty data center in Ashburn, Virginia on November 12, 2025. Data centers are the physical infrastructure that make our digital lives possible, yet most people have never seen one up close or understand how they operate. Roughly 12,000 data centers are in operation in the world, with about half in the US, according to Cloudscene, a data center directory. (Photo by ANDREW CABALLERO-REYNOLDS / AFP via Getty Images)

4 min read
Print

Sections

Contact

Governance Studies Media Office [email protected] 202.540.7724 Print

More On

Business & Workforce Sub-Topics Corporations

Cities & Communities Climate & Energy Sub-Topics Energy Industry Energy Markets & Governance

Society & Culture Sub-Topics Children & Families

U.S. Economy Sub-Topics Regulatory Policy

U.S. Government & Politics Sub-Topics Campaigns & Elections Government Reform Political Parties Political Polarization

North America Sub-Topics U.S. States and Territories

Program Governance Studies

Center Center for Effective Public Management (CEPM)

One aspect of the “affordability” crisis facing many Americans is the rising cost of electricity. According to the U.S. Energy Information Administration, electric rates measured by average retail revenues per kilowatt went up 7.1% in 2025 and are expected to continue rising in 2026. There is considerable variation across the country, though, as last year’s rates went up 26.3% in DC, 18.9% in Pennsylvania, and 16.3% in Rhode Island, with smaller increases in southern and western states.

Many factors contribute to high electricity costs, including rising energy prices, infrastructure improvements, extreme weather, environmental mandates, and the energy-intensive development of data centers. Experts disagree on how to rank these variables; while some attribute greater responsibility to data centers, others claim that this is not the case.

Regardless of the underlying causes, the public remains deeply concerned about high electricity rates and views these increases as a major concern. A 2026 Politico national survey found that nearly half of Americans expect data center energy costs to be a campaign issue. A 2026 Pew Research Center poll, meanwhile, found that 38% of respondents claimed the overall data center impact on home energy costs was mostly bad, 10% felt it was neither good nor bad, 6% believed it was mostly good, and 21% were not sure.

There were party differences in these assessments, with 44% of Democrats and 33% of Republicans believing data centers were “mostly bad” for home energy expenses. In general, Republicans had more favorable views about data centers and saw them as valuable economic development vehicles and less damaging to the environment than Democrats did.

To deal with electric rate increases, a wide range of remedies is being debated. One of the more draconian stances is a moratorium on data center construction. In the New York legislature, there is a bill that would prohibit new data center construction for three years while leaders assess the risks. At the federal level, some members have suggested a “ temporary pause ” on data centers while their fiscal, energy, and environmental ramifications are evaluated.

Others are pushing data center developers to pay all the energy costs associated with data center construction and operations. For example, President Trump’s Ratepayer Protection Pledge asks companies to fully cover the energy costs associated with their data centers, and a number of large tech firms publicly agreed to take that pledge.

Some states are adopting “large load” tariffs that charge heavy energy users higher electric rates than residential consumers. Because facilities such as data centers and manufacturing plants require immense amounts of energy, regulators increasingly expect them to cover the specific infrastructure costs they trigger. State public utility commissions possess the formal authority to enact these higher rates.

Yet most candidates are focusing less on policy remedies than on lumping electricity increases with housing, food, and gasoline costs, labeling these distinct problems as a generalized “ affordability ” crisis. The difficulty with grouping so many issues, however, is that it becomes harder to educate the public about the particular steps needed to address various contributing forces. Because there are alternative ways to deal with housing, energy, and data center costs, candidates should explain their plans for each area.

In 2025, Democratic candidates gained considerable traction by expressing concern over high electricity rates and blaming data centers for the increases. Analysts in Virginia and New Jersey attributed Democratic victories to the tough stance gubernatorial candidates took against those facilities. Conservatives have joined the critique as well; Florida Governor Ron DeSantis supported an AI bill of rights to protect consumers from AI risks and shield them from the electricity costs of data centers.

We are already seeing 2026 candidates from both parties rail against rising rates, fixing responsibility on wealthy tech companies and the energy needs of their data centers. Electoral aspirants are leveraging public fears over artificial intelligence and a “ techlash ” against large digital firms to appeal to voters and propose tough legislation. The Virginia Senate, for instance, recently passed a budget bill that would remove a $1.6 billion tax break for data center equipment—just one sign of the shifting political climate for developers. Public concern over electricity costs will likely dominate this year’s campaign dialogue and could determine which candidates find success at the polls.

Author

Darrell M. West Senior Fellow - Governance Studies, Center for Technology Innovation (CTI), Center for Effective Public Management (CEPM), Douglas Dillon Chair in Governmental Studies

The Brookings Institution is committed to quality, independence, and impact. We are supported by a diverse array of funders. In line with our values and policies, each Brookings publication represents the sole views of its author(s).

More On
- Business & Workforce Sub-Topics Corporations
- Cities & Communities
- Climate & Energy Sub-Topics Energy Industry Energy Markets & Governance
- Society & Culture Sub-Topics Children & Families
- U.S. Economy Sub-Topics Regulatory Policy
- U.S. Government & Politics Sub-Topics Campaigns & Elections Government Reform Political Parties Political Polarization
- North America Sub-Topics U.S. States and Territories
Program Governance Studies