Information in this post reflects publicly available sources as of August 19, 2026.
A party asks an industry for a favor
Political parties usually tell industries what to do. This week the direction reversed.
On August 18 the National Republican Senatorial Committee sent a private memo, headlined around Ohio data center risk, to leading AI companies. Axios obtained it and published the following day. The memo argues that Democrats have made data centers the centerpiece of their campaign against Senator Jon Husted, and that the strategy is working.
The most striking line is not about Ohio. It is the committee's concession that this is not a problem a campaign can solve: party committees cannot repair the reputation of an entire segment of the economy, so the companies building the projects have to explain who benefits, who pays, and why a community should want one.
The memo describes data centers as a sleeper issue for the whole cycle, and warns that a Husted loss blamed on data centers would make politicians nationwide unwilling to go near the next project.
How Ohio became the test case
Former Senator Sherrod Brown has spent millions of dollars this summer on advertising that labels Husted the face of data centers in Ohio, a reference to his record recruiting the industry as lieutenant governor between 2019 and 2025. Ohio has roughly 200 data centers, with projects from Meta, Vantage, QTS, and a recently announced OpenAI and Nvidia campus in the state.
A Fox News poll of 1,008 Ohio registered voters, taken August 6 to 10, found 65 percent opposed having an AI data center built in their area against 32 percent in support. Opposition crossed party lines at 72 percent of Democrats, 64 percent of independents, and 59 percent of Republicans. The same poll put Brown ahead 53 to 45.
Two source-discipline notes are worth making here. The NRSC memo describes the race as a dead heat, which conflicts with the public polling it also cites; that claim rests on internal polling the committee describes but does not publish. And the same Fox survey named inflation as the top issue at 40 percent and reported no figure at all for data centers as a voting issue. The memo's causal claim is a campaign's read, not a measured one.
What is actually driving the bills
The grievance underneath the politics is specific and mechanical, and it centers on a market most people have never heard of.
PJM Interconnection is the regional transmission organization managing the wholesale electricity market for all or parts of 13 states and the District of Columbia, serving around 65 million people. Every year PJM runs a base residual auction, a forward auction that pays generators to guarantee availability during peak demand years ahead of delivery. That payment is recovered through retail bills.
The auction prices against forecast demand, not delivered demand. A data center that has filed an interconnection request but has not broken ground still enters the demand curve.
Monitoring Analytics, the independent market monitor for PJM, put a number on that asymmetry. Including forecast data center load rather than only operating data centers raised total auction revenues by roughly $6.2 billion, an increase of about 61 percent above what the auction would otherwise have cost.
The resulting price trajectory is the single clearest artifact in this whole story.
Monitoring Analytics attributed 63 percent of the increase in the 2025/26 auction to data center load, around $9.3 billion recovered from customers across the region. In the most recent auction it put data centers at $6.3 billion of $16.4 billion in total charges. Wholesale power across PJM averaged $136.53 per megawatt-hour in the first quarter of 2026 against $77.78 a year earlier, a jump of about 76 percent.
Two caveats matter. Capacity historically accounts for somewhere between 8 and 15 percent of a residential bill, so a tenfold capacity increase does not mean a tenfold bill. And the December 2025 auction failed to secure its own reliability target for the first time in the market's history, so customers are paying record prices for a thinner margin.
Four different objections wearing one label
Treating this as a single backlash obscures how differently the groups involved are reasoning.
- Ratepayers object to the bill. NRDC projects average household increases of roughly $70 per month across PJM territory by 2028 relative to pre-surge levels.
- Fiscal conservatives object to the subsidy. Ohio's data center sales-tax exemption cost the state about $1.57 billion in 2025, after which Governor Mike DeWine paused the break. Pennsylvania's equivalent could forgo roughly $2 billion by mid-2031.
- Local residents object to the exchange rate. The OpenAI campus in Ohio promises 35,000 construction jobs but 2,500 permanent operating positions, and construction employment lasts a year or two.
- Everyone anxious about AI objects to something else entirely. Brookings makes the case that data centers have become the physical proxy for concerns about AI and the labor market, because they are the only part of AI a town can vote on.
The causal claim is genuinely contested, and honest coverage should say so. SemiAnalysis argues that PJM's market design, not AI demand as such, is the main culprit behind the price spike. Analysts have noted that much of the increase to date reflects replacing aging equipment rather than serving new load. The Ohio Manufacturers Association points at utilities and at a bidding process that rewards overstating expected demand.
The industry's own case is that these projects deliver high-wage jobs and tax revenue that funds schools and public safety, and the Atlantic Council has argued that sustained obstruction carries a national competitiveness cost. Academic work on local employment effects has been considerably less generous about the jobs half of that claim.
Where things stand
The day before the memo leaked, a Democratic governor moved first. Governor Josh Shapiro signed Executive Order 2026-05 on August 18, describing it as the strictest guardrails in the nation.
The order makes the previously voluntary GRID requirements binding through a consent order and agreement, covering energy affordability, transparency and community engagement, workforce and economic development, and environmental protection. It applies to projects with peak demand above 25 megawatts, a notably lower threshold than the 50 megawatt trigger in PJM's pending large-load rules.
Coverage describing the order as a block on development overstates it. What it actually changes is sequencing, and it attaches conditions that were previously optional. Developers must bring their own generation and pay for their own grid infrastructure rather than socializing those costs, obtain an increasing share of power from clean sources, and report energy and water consumption. AI data center proposals are removed from the state Fast Track permitting program, nondisclosure agreements on these projects are prohibited, and the sales and use tax exemption now depends on GRID compliance.
The scale context is unusual. Pennsylvania has over 100 proposals in public databases, 58 that have engaged with the Department of Environmental Protection, 15 that have applied for at least one permit, five with everything needed for a first phase, and zero AI data centers actually operating. Shapiro's stated target is speculative developers, and he moved by executive order after the state House passed the codifying bill 134 to 68 and the Senate declined to take it up.
Nationally the pattern is well established: more than 100 local moratoriums, over 300 state data-center bills filed in the first six weeks of 2026, and roughly 75 projects worth about $130 billion blocked or delayed in the first quarter alone, close to the full-year 2025 total. Monterey Park in California became the first US city to pass a permanent ban by ballot measure.
Three things are worth watching. Whether Ohio breaks in November, since both parties have decided that result will be read as a verdict. Whether PJM's large-load rules at FERC shift cost allocation onto the loads that drive it. And whether the coalition holds, since political scientists studying cross-cutting issues note that partisan pressure tends to overwhelm them once they become electorally valuable.
Summary
The NRSC memo is the most revealing document in this story precisely because of what it concedes. It asks AI companies to change how voters perceive data centers, which is a communications framing of the problem. But the thing generating the perception is a line item on an electricity bill, and that line item exists because of how capacity is procured and allocated, not because of how it was explained.
Ratepayers across a 13-state grid are currently paying, in advance and without refund, for capacity reserved to serve facilities that may never be built. No amount of community outreach changes that arithmetic. Shapiro's order is interesting because it is the first major intervention that attacks the mechanism rather than the messaging: bring your own power, pay your own infrastructure costs, and get local consent first.
For anyone building on this infrastructure, the practical takeaway is a shift in the binding constraint. For the past three years, capacity planning has been a story about chips and supply chains. It is becoming a story about siting, interconnection queues, and local consent, and those move on the timescale of zoning hearings rather than fab schedules.
This is a standalone post. Future posts covering AI news and releases will appear under the In Focus label.