AI data centers are increasing electricity costs for factories in America's Rust Belt.

      For many years, the electricity expenses at the Belden Brick Company in Sugarcreek, Ohio, remained relatively stable. However, last year, they surged by 90%, primarily due to the rapid increase in data centers throughout the region, fueled by the AI expansion.

      This 141-year-old manufacturer, known for its bricks used in notable locations like the Alamo and Notre Dame, identified a significant part of its financial strain stemming from one particular item on its bill. The monthly capacity charge skyrocketed from $1,600 to $12,000, reflecting the larger trend now evident as households in Europe are urged to reduce power consumption and U.S. utilities prepare for $1.4 trillion in grid enhancements.

      Belden Brick is among numerous manufacturers in the Midwest experiencing this pressure, as shown by a Reuters analysis of energy data and conversations with nearly a dozen companies. The electricity costs for factories, a vital expense, are increasing at a faster rate than those for most homes and businesses.

      The pressure is particularly intense in the 13-state region overseen by PJM Interconnection, which spans from New Jersey to northern Illinois and down to Tennessee. Within this area, a single data center can consume as much electricity as a medium-sized town, and five out of the eight states identified as emerging data center hotspots are located in the Rust Belt, according to Synergy Research Group.

      Capacity charges, which compensate power generators for maintaining supply during peak times, have surged. PJM’s rate jumped from $28.92 per megawatt-day in 2024 to $329.17 now, an approximate increase of 1,038%, primarily driven by data centers, which accounted for around 40% of the record $16.4 billion in costs from its latest auction.

      These charges impact different sectors unevenly. From December 2024 to December 2025, the average industrial electricity prices rose by 31% in Pennsylvania and 26% in Ohio, while the national average rose by only 7%, according to Reuters calculations based on Energy Department data. In contrast, households in those two states experienced smaller increases of 14% and 9%.

      Electricity supply is struggling to keep up. PJM spokesperson Jeff Shields remarked that data centers “can be constructed faster than the generation needed to accommodate them.” Recently, PJM requested some users to reduce their electricity consumption to prevent rolling blackouts as peak demand reached an all-time high during a heatwave.

      Proponents of data centers argue that the increase necessitates long-overdue grid updates. Aaron Tinjum from the Data Center Coalition also attributes the situation to the retirement of older plants and limitations in transmission.

      For manufacturers operating on narrow margins, even a slight increase can have significant effects. Belden has raised brick prices by 4% but has still experienced a decline in profits. Company president Brad Belden stated, “There are going to be some companies that are on the razor’s edge.”

      Other companies are adapting. Plaskolite, a plastic manufacturer, saw its annual capacity charges for its Pennsylvania and Ohio facilities climb to $1.2 million from $200,000 and is considering a direct natural gas supply. Tosoh SMD, an electronics materials business in Grove City, Ohio, is contemplating production during night shifts when electricity is less expensive.

      Regulators are beginning to respond, although not always favorably for manufacturers. These companies are classified in the same rate category as data centers, meaning regulations intended to protect households can also impact them.

      The Federal Energy Regulatory Commission is advocating for companies with on-site generation to pay transmission fees for that power, a move manufacturers are contesting, and at least ten states are developing their own regulations for data centers. This situation parallels a recent House vote regarding who should bear the costs of energy for AI data centers.

      The implications are politically significant. The rising costs threaten the viability of certain plants just as President Donald Trump promotes domestic manufacturing. The White House has indicated that he is working with tech companies to sign a "ratepayer protection pledge" and has ordered additional PJM power plants financed by these tech firms. Meanwhile, the industry is increasingly looking toward nuclear options, including a record series of small modular reactor deals.

      “Manufacturers are not data centers,” stated Paul Cicio of the Industrial Energy Consumers of America. For now, the construction projects promising to revitalize American industry are quietly increasing the costs of operating its oldest factories.