Electricity rate hikes could become more common as US sees record demand for power

Duquesne Light Company customers were unhappy to find out this week their power bills will see yet another rate increase.

The roughly 3% hike will add approximately $3 to a typical residential customer’s monthly bill, or approximately $35 per year.

It’s part of a pattern for DLC customers who have endured one hike after another since 2016, as well as other providers across the country who have pushed regulators to allow them to increase the fees they charge customers on a near-annual basis.

However, DLC leaders say this increase is not coming from them. Instead, the cost to produce electricity is going up, and the company is merely passing on the extra amount it takes to purchase the power for its grid.

“DLC does not profit from electric generation,” the company’s notice stated.

There could be more such notices in the coming decades as the US electricity grid handles a shift from an era of relatively stable electricity demand to what analysts are describing as a record surge in demand.

The shift is being driven in large part by data centers and the artificial intelligence revolution, which is costing huge amounts of power. Newer data center proposals are often coming with plans to build on-site power generation facilities to combat residents’ fears the facilities will drive costs up.

Still, demand for “large load” facilities, including data centers, is expected to increase sixfold by approximately 2040.

However, they’re not the only factor at play for a region that’s expected to double its overall demand for electricity over the next 20 years.

Analysts with PJM, a regional power provider whose territory includes DLC, expect demand for electric vehicles to rise 1,300% in 20 years as the number of cars drawing power rises from two million to 27 million.

The expectations have been revised down in the last year as the Trump administration has rolled back incentives and emissions standards and consumers continue to be discouraged by the lack of widespread charging facilities. Widespread adoption of electric vehicles is still expected to happen at about the same rate, just at a slower pace in the first half-decade.

Solar panels are projected to offset some of this new demand, but not enough to make up the difference. Roughly 75% of new electric production in the US is expected to come from renewable sources over the next decade, though analysts say construction of new facilities is being slowed down by permitting delays.

This crunch is expected to leave a generation of politicians searching for solutions, be it additional production or increased efficiency standards.

They’ll also have to face frustrated voters who are likely to place energy costs near the top of their lists of concerns as they go to the polls.

“At this point right now, it’s too scary to think about the future,” Angela Kemper said. “It really is.”

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