The cost of electricity generated from natural gas power plants in the United States has climbed to its highest level in at least 17 years, driven by surging demand from data centers, according to data released Monday by Lazard Inc. The levelized cost of energy for combined cycle gas plants reached $90 per megawatt-hour in 2026, up from $78 per megawatt-hour the previous year. According to Lazard, this marks the highest level since 2009, when the cost stood at $83 per megawatt-hour.
Lazard defines the levelized cost of energy as the long-term electricity price a power plant requires to break even on its investment. George Bilicic, global head of power, energy and infrastructure at Lazard Inc., stated that costs are expected to continue rising as demand from new data centers accelerates. The expansion of artificial intelligence infrastructure and cloud computing facilities has emerged as one of the most significant drivers of electricity consumption growth in the United States.
Renewable energy sources were not immune to the broader pricing trend. Solar power costs climbed to $69 per megawatt-hour, while onshore wind rose to $68 per megawatt-hour. Both figures represent increases of more than 10% compared to the prior year and mark the highest levels recorded since at least 2014, according to Lazard data.
The steep rise in generation costs has real consequences for consumers. Higher electricity costs have translated into rising utility bills across parts of the United States, and the issue has taken on political significance, becoming a key concern for voters ahead of the midterm elections scheduled for November. The Lazard findings underscore a structural shift in US power markets, where the convergence of electrification, data center proliferation, and tightening supply conditions is reshaping the economics of power generation across all fuel types.
Source: Lazard Inc. via Investing.com / Oil & Gas 360, July 13, 2026.
Source: oilandgas360.com