US manufacturers in many Rust Belt cities and towns are paying significantly higher electricity costs as growing energy demand from data centers strains the largest power grid operator in the United States. The resulting squeeze on profit margins for steelmakers and brick factories could further undermine President Donald Trump’s “Made in America” plan to revive US manufacturing, and it comes as Trump has simultaneously championed the tech companies behind the AI data center boom.
Factory electricity bills are generally rising faster than those for other business customers or residential customers, according to a Reuters analysis. It highlighted the example of the Belden Brick Company, a 141-year-old brick manufacturer in Ohio, whose electricity bills have soared from $1,600 to $12,000 per month due to a higher monthly capacity charge in the 13-state region served by the grid operator PJM Interconnection.
Meanwhile, the Steel Manufacturers Association warned that US steel companies concentrated in the Rust Belt region served by PJM Interconnection are paying tens of millions of dollars in higher power costs per year. Electricity accounts for 20 to 40 percent of the total production costs of making steel.
Each electric arc furnace used in steelmaking has an operating power load between 40 and 200 megawatts, and the entire US steel industry draws up to 11 gigawatts of power at peak production across all facilities.
US steelmakers have benefited from data center construction’s requirements for an estimated 1 million tons of steel per year. But data center energy demand has also driven up operating costs for the US steel industry, according to the Wall Street Journal. The Ohio-based steelmaker Metallus described its electricity costs as having jumped by 70 percent since 2024, leading the company to pay an extra $15 million in energy costs annually.
The higher electricity costs for manufacturers coincide with many states in PJM territory having attracted large AI data center projects with substantial electricity needs. That data center growth has driven up PJM’s capacity prices—paid to power generators according to supply and demand forecasts—from $28.92 per megawatt-day in 2024 to $329.17 per megawatt-day in 2026, according to Reuters reporting.