Full Breakdown
Data Centers Drive Surge in Power Costs for Rust Belt Manufacturers
7/8/2026, 12:12:30 PM
Rising Capacity Charges Threaten Traditional Factories
Electricity bills for Ohio’s Belden Brick Company rose from $1,600 to $12,000 per month after a 90 % jump in power costs, driven by higher capacity charges. In the 13-state PJM Interconnection region, where data centers are expanding, capacity fees are now three times higher for manufacturers than for residential customers.
AI-Focused Data Centers Strain PJM Grid
AI-focused data centers consume electricity comparable to mid-sized towns, outpacing new generation capacity. PJM’s capacity price rose from $28.92 per megawatt-day in 2024 to $329.17, a 1,038 % jump, prompting emergency curtailments during record-high temperatures to avoid rolling blackouts.
Manufacturers, Grid Operator, and Policy Makers
Manufacturers include Belden Brick (Ohio), Plaskolite (Pennsylvania/Ohio), and Tosoh SMD (Ohio). PJM Interconnection sets capacity prices. The White House, representing President Donald Trump, promoted a “ratepayer protection pledge.” FERC is considering transmission-charge reforms.
Capacity Prices and Industrial Electricity Rates
Capacity prices in PJM jumped 1,038 % to $329.17 per megawatt-day. Industrial electricity rates rose 31 % in Pennsylvania and 26 % in Ohio between Dec 2024 and Dec 2025, versus a 7 % national increase. Residential rates in the same states rose 14 % and 9 %.
Impact on Manufacturers
Belden Brick raised brick prices 4 % while profits fell, warning firms are “on the razor’s edge.” Plaskolite’s capacity charges rose to $1.2 million annually, prompting a shift to natural-gas power, while Tosoh SMD is increasing night-shift production to use cheaper off-peak electricity.
Official Statements & Responses
The White House said President Trump urged tech firms to sign a “ratepayer protection pledge” and directed new PJM power-plant construction funded by the companies. PJM officials say capacity prices reflect supply-demand forecasts, burdening manufacturers. FERC declined comment on extending transmission-charge obligations to onsite generators.
Criticism & Opposition
Manufacturers say they are grouped with data centers in rate-class designations and warn demand-management rules will raise costs; trade group Industrial Energy Consumers of America has appealed to FERC for exemptions. Data-center advocates argue the expansion forces grid investment and cite plant retirements and transmission constraints as cost drivers.
Conflicting Reports & Gaps
Data-center advocates credit the surge with prompting overdue grid investment, while manufacturers attribute rising costs primarily to data-center demand. Precise measurements of each sector’s contribution to capacity-charge growth are unavailable, and the impact of pending state regulations on manufacturers remains unquantified.
Verbatim Quotes
- “That capacity charge just jumped off the page,” — Brad Belden, President, Belden Brick
- “can be built faster than the generation needed to serve them, driving up demand faster than supply.” — Jeff Shields, PJM spokesperson
- “This can have short- and long-term impacts on whether or not these facilities can continue to operate,” — Paul Cicio, President, Industrial Energy Consumers of America
- “Electricity has become the highest-drama form of energy,” — Timothy Ling, Plaskolite
What's Next
FERC’s pending transmission-charge rule and state demand-management proposals could reshape manufacturers’ electricity costs. Companies are evaluating onsite generation and off-peak production, while policymakers weigh additional power-plant construction and rate-payer protection to preserve grid reliability and industrial competitiveness.
