US manufacturers are facing soaring electricity costs due to rising energy demand from data centers, threatening the viability of President Donald Trump’s “Made in America” plan. According to a Reuters analysis, manufacturers in Rust Belt cities are experiencing significant increases in electricity bills, which could undermine the revival of US manufacturing.
Impact of Data Centers on Energy Costs
The surge in energy demand from data centers is straining the PJM Interconnection, the largest power grid operator in the US. Factory electricity bills have reportedly risen faster than those of other business or residential customers. For instance, the Belden Brick Company, a 141-year-old brick manufacturer in Ohio, saw its monthly electricity bill jump from $1,600 to $12,000 due to increased capacity charges.
Additionally, the Steel Manufacturers Association has warned that US steel companies in the PJM region are incurring tens of millions in higher energy costs annually. Electricity represents 20 to 40 percent of production costs for steel making, and with electric arc furnaces consuming between 40 and 200 megawatts, the entire US steel industry draws up to 11 gigawatts at peak production.
Steel Industry's Rising Energy Costs
Despite benefiting from the construction of data centers that require an estimated 1 million tons of steel annually, US steelmakers are grappling with increased operating costs. The Ohio-based steel manufacturer Metallus reported a 70 percent increase in electricity costs since 2024, leading to an additional $15 million in annual energy expenses.
