US manufacturers' energy costs soar because of AI data center demand
4 hours ago
- #manufacturing
- #data centers
- #energy costs
- US manufacturers in Rust Belt cities face significantly higher electricity costs due to rising demand from data centers, straining the PJM Interconnection power grid.
- Steelmakers and brick factories see squeezed profit margins, potentially undermining Trump's 'Made in America' manufacturing revival plan, even as tech companies behind the AI boom are championed.
- Factory electricity bills are rising faster than for other customers; for example, Belden Brick Company's monthly bills soared from $1,600 to $12,000 due to higher capacity charges in PJM's 13-state region.
- The Steel Manufacturers Association warns that Rust Belt steel companies pay tens of millions more yearly in power costs, with electricity accounting for 20-40% of steel production costs.
- Data center growth has driven PJM's capacity prices from $28.92 per megawatt-day in 2024 to $329.17 in 2026, increasing operating costs for manufacturers like Metallus, which saw a 70% electricity cost jump and an extra $15 million annually.