Across the Midwest, electricity bills are climbing to new heights, leaving residents and regulators grappling with the causes and potential solutions. On August 27, 2025, a convergence of forces—ranging from technological expansion to global energy markets and climate-driven demand—has pushed rates upward for millions of households in Illinois and Indiana. The ripple effects are being felt in kitchen-table budgets, public hearings, and utility company boardrooms alike.
In Chicago, the summer’s heatwaves were only part of the story behind the sharp increase in ComEd electricity bills. According to Block Club Chicago, ComEd’s price for electricity jumped around 45% compared to last summer, translating to an extra $11 per month for the average customer through May. While extreme weather played a role, experts point to an explosive growth in artificial intelligence and the data centers powering it as a major driver of new electricity demand.
“Artificial intelligence is the driver for the majority of new data center growth, and therefore power demand increase,” said Andrew Chien, a computer science professor at the University of Chicago and senior scientist at Argonne National Lab. Companies like Google, Meta, Amazon, and Microsoft are at the forefront, building massive facilities to support cloud computing and AI—a trend that shows no sign of slowing down.
Chien explained, “Nationally, it’s widely expected that the power consumption of data centers will have doubled in a two year period, from 2024 to 2026. And the amazing thing is, it’s going from a lower base of 1 percent of the electricity in the United States to that now being projected to be 8-12 percent of the electricity in the United States by the end of the decade. So it’s doubling again and again in that period.”
Chicago’s status as a data center hub is no accident. Its urban density, cooler climate, and abundant water supply are attractive to operators who need reliable, cost-effective cooling for their servers. As of 2024, Illinois boasted more than 187 data centers, according to a report from Landgate, a data analytics firm specializing in real estate and energy. However, ComEd officials say that, for now, the current price hikes aren’t directly attributable to data centers. “We are not currently seeing spikes today in electricity usage in our northern Illinois region that are attributable to data centers,” a ComEd spokesperson told Block Club Chicago. “In fact, most of the data centers are behind their projected load ramp schedules. What we are seeing is significant future projected demand, and that drives capacity costs.”
That projected demand is already being felt in wholesale power markets. ComEd purchases electricity from PJM Interconnection, which manages the grid across 13 states and Washington, D.C. When PJM held its annual power capacity auction in July, prices soared for all customers, driven by expectations of increased demand—especially from data centers. Chien summed it up: “When there’s more customers and more consumption, there’s more demand and contention for the supply. So market prices go up.”
Efforts are underway to ensure that data centers pay their fair share for the grid upgrades and increased capacity they require. Christelle Khalaf, associate director at the Government Finance Research Center at the University of Illinois Chicago, noted that utilities nationwide are exploring new rate structures. “Across the U.S., utilities are exploring rate designs like large-load tariffs and clean-energy transition tariffs to ensure high-usage customers such as data centers bear a fairer share of costs,” Khalaf said. In Ohio, for example, American Electric Power has proposed that large data centers pay more for their energy needs, regardless of whether their usage matches projections. Regulators have also ruled that these facilities must contribute more to grid improvements.
But it’s not just data centers and AI fueling higher bills. The price of natural gas—a key input for many power plants—has risen sharply as domestic supplies are constrained by increasing exports. This, combined with climate change-driven fluctuations that require grid operators to plan for higher peak loads, has created a perfect storm for rate hikes. “It has a worse, longer-term effect, because the longer-term effect is now all of your estimates for how much generation you’re going to need in the future have gone up,” Chien observed.
Meanwhile, in Indiana, frustration over rising electricity costs boiled over at a public hearing held at Fort Harrison State Park in Lawrence on August 27. Around 100 people gathered to voice their concerns about AES Indiana’s proposal to raise rates in two phases starting in the second quarter of 2026. The first increase would add about $12 per month (7.5%) for residential customers using 1,000 kWh monthly, with a second bump of $9 (6%) planned for January 2027. Altogether, that’s an estimated $21 monthly—or a 13.5% jump. The Indiana Utility Regulatory Commission is set to decide on the proposal in spring 2026.
“AES is already making quite a hefty profit,” said Liz Masur, a member of the Lawrence Common Council, during the hearing. She called the increase “unnecessary, and it’s going to gouge people who can least afford to pay it.” Many attendees echoed her concerns, highlighting the burden on retirees and families living on fixed incomes. “I think that Indiana is at a point where the people are really getting tired of not being listened to. Enough is enough,” Masur declared. Hunter West, another AES Indiana customer, pointed to a 2023 survey that ranked AES Indiana as the second most expensive private electric utility for residential customers. He pleaded, “I work a full-time job, 40 hours, sometimes 50 hours, and I would appreciate it if my legislative body could protect me so I don’t have to come here after work to make an argument to stop them from getting another $100 million just because they want to.”
According to the Citizens Action Coalition, Hoosiers have seen a statewide average energy bill increase of more than $28 per month in 2025—a 17.5% jump, and the highest year-over-year increase since at least 2005. The Indiana Energy Association responded in a statement, emphasizing that its members “are committed to keeping affordability top of mind, while also making the investments needed to provide reliable electricity.”
In Illinois, Ameren customers have faced their own challenges. As explained by Matt Tomc, vice president of regulatory policy and electric supply for Ameren Illinois, bills rose this summer due to a spike in electric supply prices caused by a lack of surplus generation during peak demand. Higher summer temperatures and increased usage only added to the pressure. Ameren Illinois doesn’t generate electricity itself but delivers power purchased from federal grid operators and an Illinois non-profit agency, passing it along to customers at cost, without profit.
There’s a bit of relief on the horizon: electric supply rates are expected to return to 2024 levels on October 1, 2025. In the meantime, Ameren has provided over $55 million in energy assistance and LIHEAP funding throughout 2025 to help customers weather the storm. The company also encourages customers to compare rates, as nearly half receive electricity from alternative suppliers.
Illinois remains a national leader in nuclear power, with 11 reactors generating 54% of the state’s electricity as of 2019, according to the U.S. Energy Information Administration. Despite social media rumors, the state’s pause on new nuclear reactors hasn’t contributed to the recent price spikes.
As the Midwest’s energy landscape shifts, residents and regulators alike are searching for answers—and relief. With technology, climate, and market forces all in play, the debate over who pays, how much, and why is sure to continue as the region powers into an uncertain future.
