<p class="wp-block-paragraph"><a href="https://www.washingtonexaminer.com/tag/data-centers" rel="noopener noreferrer" target="_blank">Data centers</a> have become a focal point in discussions about rising energy costs in the United States. Local governments are halting data center construction, while state officials are imposing additional requirements. However, the underlying issue of increasing electric bills remains largely unaddressed.</p>
<p class="wp-block-paragraph">The U.S. is struggling to efficiently zone, permit, and interconnect new power sources to meet the demands driven by <a href="https://www.washingtonexaminer.com/tag/artificial-intelligence" rel="noopener noreferrer" target="_blank">artificial intelligence</a>. Without improvements in these processes, restrictions on data centers will not alleviate the problem, as projects will still face delays.</p>
<p class="wp-block-paragraph">In August, Republican Senate candidate Mike Rogers proposed a one-year moratorium on new data centers in <a href="https://www.washingtonexaminer.com/tag/michigan/" rel="noopener noreferrer" target="_blank">Michigan</a>. Shortly before, Pennsylvania Governor Josh Shapiro (D) enacted an order that prevents the state from reviewing permits until developers secure local zoning approval and additional power sources. The grid operator PJM, which serves 13 states, plans to cut off new large loads that do not have their own capacity starting in mid-2027.</p>
<p class="wp-block-paragraph">Shapiro's order is described as the strictest in the nation, but it does not acknowledge that zoning is a local matter, and it requires developers to obtain local approval before the state will consider their permits. This process can delay projects significantly, as developers must still generate their own power, which can take years.</p>
<p class="wp-block-paragraph">Companies attempting to operate independently of the grid face similar challenges. In New Mexico, Oracle and <a href="https://www.washingtonexaminer.com/tag/openai/" rel="noopener noreferrer" target="_blank">OpenAI’s</a> Project Jupiter aimed for on-site power generation to avoid utility delays, but the state land commissioner has rejected the necessary pipeline twice this year, pushing the project’s timeline to 2027.</p>
<p class="wp-block-paragraph">In Vineland, <a href="https://www.washingtonexaminer.com/tag/new-jersey" rel="noopener noreferrer" target="_blank">New Jersey</a>, a data center linked to a <a href="https://www.washingtonexaminer.com/tag/microsoft/" rel="noopener noreferrer" target="_blank">Microsoft</a> contract faced stop-work orders due to equipment installed without local permits, and the state has yet to issue air permits for the generators. Both companies were prepared to fund their own power generation but could not secure the necessary approvals in time.</p>
<p class="wp-block-paragraph">These issues are not isolated. A survey from Lawrence Berkeley National Laboratory revealed over 2,000 gigawatts of generation and storage are stuck in interconnection queues across the country, exceeding the total installed capacity. Projects that reached commercial operation in 2025 had a median wait time of over five years from request to operation. Only about 13% of the capacity that entered queues from 2000 to 2020 was built by the end of last year, with many others withdrawing. Even successful projects are taking longer than the demand driven by AI can accommodate.</p>
<p class="wp-block-paragraph">This bottleneck contributes to the rising electric bills that are causing public frustration. PJM’s independent market monitor estimates that data center demand accounted for $29.4 billion in capacity-auction charges over the last four auctions, representing 46% of the total, due to insufficient new supply to meet demand. Addressing the regulatory process could alleviate both issues, while maintaining the current system will not resolve the underlying problems.</p>
<p class="wp-block-paragraph">Federal regulators have begun to take action. The Federal Energy Regulatory Commission has mandated that grid operators justify or revise their large-load interconnection rules. The Nuclear Regulatory Commission has also established a faster licensing pathway for advanced reactors. However, these measures do not address local zoning issues and are insufficient to counteract the effects of local freezes, pipeline denials, and lengthy reviews for new power generation.</p>
<p class="wp-block-paragraph">While freezes and executive orders provide politicians with announcements to make, reforming zoning boards and permitting processes is a more complex task that often receives less attention. Until these underlying issues are resolved, discussions about data centers will continue without addressing the root causes of rising energy costs.</p>
<p class="wp-block-paragraph"><em>Iulia Lupse is the founder of I&A Communications Solutions and a contributor with Young Voices.</em></p>