Gas Overbuild for Data Centers Threatens to Raise US Power Bills

U.S. utilities are turning to new gas-fired generation and pipelines as artificial intelligence drives a sharp increase in data-center electricity demand. The strategy matters because regulated utilities generally recover approved infrastructure, financing and fuel costs through customer rates. If projected data-center loads fail to materialize or AI investment cools, households and businesses could be left paying for underused assets, while greater reliance on natural gas would expose electricity bills to volatile commodity prices.

The Institute for Energy Economics and Financial Analysis said on June 25, 2026, that two Kinder Morgan-linked pipeline projects illustrate the risk. Mississippi Crossing, or MSX, would cost an estimated $1.7 billion, while South System Expansion 4, or SSE4, would cost $3.5 billion. Together they would add 3.4 billion cubic feet of daily capacity and are scheduled to enter service in late 2028. Yet Kinder Morgan’s base case shows a 2035 regional shortfall of just 460 million cubic feet a day, less than 15% of the proposed capacity, prompting IEEFA to urge the Federal Energy Regulatory Commission to reassess the projects.