Frank Carr
Big tech data centers are driving a sharp rise in electricity costs for American manufacturers, with some factories in the PJM grid region seeing monthly capacity charges jump by 650 percent in a single year.
A Brick Maker Feels the Squeeze
The Belden Brick Company, a 141 year old manufacturer based in Sugarcreek, Ohio, has watched its power bills swing wildly after years of stability. Last year alone, electricity costs surged 90 percent, according to company president Brad Belden, whose family has run the business for five generations. The culprit is a monthly capacity charge that climbed from 1,600 dollars to 12,000 dollars, a change Belden says jumped off the page the moment he saw the bill. Belden Brick makes products used in landmark structures such as the Alamo in Texas and buildings at Notre Dame University, and it is far from alone in facing this squeeze.
Why Data Centers Are Straining the Grid
Capacity charges exist to pay power generators for keeping enough electricity available during peak demand and to encourage new supply to come online. For most households, these charges make up roughly 10 percent of a monthly bill. For manufacturers, that share can run up to three times higher. In the 13 state region served by grid operator PJM Interconnection, the charges have climbed sharply because supply has stayed flat while demand from data centers keeps climbing. A single server warehouse, industry sources note, can consume as much power as a midsized town.
Big Tech's Outsized Power Appetite
Federal, state and local officials, facing complaints from residents and warnings about grid stability, are pushing large technology companies to shoulder more of the cost of their growing electricity needs. Yet some of the proposed fixes treat smaller manufacturers the same as tech giants like Meta and Amazon, even though those companies' power demands can be 50 times greater than a large factory's. Meta declined to comment on the matter, and Amazon did not respond to a request for comment.
The strain became visible last week when PJM had to take emergency measures, including asking customers to cut back on electricity use, to avoid rolling blackouts as extreme heat pushed peak demand to a new record.
What Rising Costs Mean for Manufacturers
Industry advocates and policy experts warn that the combination of higher power costs and unsettled regulations could threaten the survival of some factories, a troubling prospect given President Donald Trump's push to expand domestic manufacturing. Some manufacturers are now weighing whether to raise prices, slow their growth plans, or move operations elsewhere entirely.
Frequently Asked Questions
Why are data centers growing?
Data centers are expanding rapidly to support the computing power needed for artificial intelligence systems, cloud computing and other digital services operated by major technology companies.
What are big tech data centers?
They are large facilities filled with servers and computing equipment that companies like Meta and Amazon use to process data, run software and power AI applications, often consuming as much electricity as a small town.
Why are data centers important?
Data centers support the digital infrastructure behind cloud services, online platforms and AI tools that businesses and consumers rely on daily, making them central to modern technology operations.
What companies need data centers?
Major technology firms including Meta and Amazon operate large scale data centers, alongside cloud providers and AI developers that require significant computing capacity to run their services.
How big are microsoft data centers?
The source material does not detail Microsoft's specific data center sizes, though industry wide facilities operated by large tech companies can draw electricity comparable to a midsized town.
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