Higher power costs hit Washington as data center demand looms
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Electricity costs have climbed in Washington state since last year, and could rise even higher as the state's clean energy push collides with growing electricity demands from data centers that power AI.
Why it matters: Rising utility bills could compound the financial pressure on Washington residents as inflation continues to squeeze household budgets nationwide.
By the numbers: Washington's average retail price for residential electricity climbed from 12.14 cents per kilowatt hour in May 2024 to 13.67 cents in May 2025 — a 12.6% increase, per the U.S. Energy Information Administration.
- Nationally, prices rose 6.5% in the same period.
- Washington residents still pay less than the national average of 17.47 cents per kilowatt hour — largely due to the state's ample supply of cheap hydropower, according to the U.S. Department of Energy.
What they're saying: Utilities in Washington have given a variety of reasons for recent rate increases, including severe weather events, the costs of clean energy investments, and higher wholesale power rates, Amelia Lamb, a spokesperson for the state's Department of Commerce, told Axios.
- In an email to Axios last week, Liz Anderson, the executive director of the Washington Public Utility Districts Association, said utilities' efforts to upgrade the state's electric grid and meet a state mandate to be carbon-neutral by 2030 are among the factors driving up prices.
Yes, but: Going forward, data centers — which consume immense amounts of power — are contributing to an "extraordinary growth in the demand for electricity," Anderson wrote in a letter to other officials last fall.
- The needs of data centers — combined with population growth and increased electrification of buildings, transportation and more — could lead to service disruptions unless more power is generated, Anderson wrote.
- "The potential risk to residential and commercial customers is an important concern, as data center developers propose very large increases in future electricity demand," Lamb wrote in an email to Axios.
What's next: Washington Gov. Bob Ferguson has convened a work group to study data centers' impact on the state's economy, tax revenue, energy use and the environment.
- Its findings are due in December.