US manufacturers in Rust Belt cities are paying significantly higher electricity costs as growing energy demand from AI data centers strains the largest power grid operator in the United States. The strain on profit margins for steelmakers and brick factories could further undermine President Donald Trump’s 'Made in America' plan to revive US manufacturing. Factory electricity bills are generally rising faster than those for other business customers or residential customers, according to a Reuters analysis.
The Belden Brick Company, a 141-year-old brick manufacturer in Ohio, has seen its electricity bills soar from $1,600 to $12,000 per month due to a higher monthly capacity charge in the 13-state region served by the grid operator PJM Interconnection. Meanwhile, the Steel Manufacturers Association warned that US steel companies in the Rust Belt region served by PJM Interconnection are paying tens of millions of dollars in higher power costs per year. Electricity accounts for 20 to 40 percent of the total production costs of making steel. Each electric arc furnace used in steelmaking has an operating power load between 40 and 200 megawatts, and the entire US steel industry draws up to 11 gigawatts of power at peak production across all facilities.
The higher electricity costs for manufacturers coincide with many states in PJM territory having attracted large AI data center projects with substantial electricity needs. That data center growth has driven up PJM’s capacity prices—from $28.92 per megawatt-day in 2024 to $329.17 per megawatt-day in 2026, according to Reuters reporting. PJM has also forecast that electricity demand in its territory will surpass available supply by 6.6 gigawatts starting in 2027, which the Wall Street Journal describes as equivalent to more than six nuclear power plants.
Source: arstechnica
