For many years, electricity costs at the Belden Brick Company in Sugarcreek, Ohio, remained fairly predictable. Then last year, those bills shot up by 90% — a surge driven largely by the growing appetite for power from data centers moving into the region.
The brick manufacturer, which has been in business for 141 years and whose products appear in landmark structures including the Texas Alamo and Notre Dame University, has seen its monthly capacity charge balloon from $1,600 to $12,000.
Belden Brick is far from alone. Factories throughout America’s industrial heartland are grappling with climbing electricity costs as data centers built to support the artificial intelligence industry spread across the same regions where manufacturing has long been rooted.
A Reuters review of federal energy data and conversations with nearly a dozen manufacturers and industry advocates found that factory electricity bills — a fundamental operating expense — are climbing faster than those for most homes and other types of businesses.
Governments at the federal, state, and local levels, responding to both public frustration and concerns about grid stability, are pushing technology companies to shoulder more of the financial burden tied to their expected electricity demand. However, some of the proposals being considered would group smaller factories together with tech giants like Meta and Amazon, even though those companies’ power consumption can exceed that of even large manufacturers by a factor of 50. Meta declined to offer a comment, and Amazon did not respond to a request for one.
Capacity charges are fees designed to compensate power generators for maintaining enough electricity on the grid during periods of peak demand and to encourage the development of new energy supply. These charges typically make up about 10% of a residential electricity bill, but for manufacturers they can account for as much as three times that share, according to manufacturers, attorneys, and energy experts.
Those fees have climbed steeply in the 13-state territory managed by grid operator PJM Interconnection, where supply has stagnated while data centers — each of which can consume as much electricity as a mid-sized town — have multiplied.
