FACT

Independent research shows electricity rates depend on how infrastructure costs are shared, not just on whether a big new customer moves in. Research from Lawrence Berkeley National Laboratory found that U.S. states with the largest data center demand growth between 2019 and 2025 generally saw electricity price decreases, not increases — because spreading the same fixed grid costs across more electricity sales put downward pressure on rates. A separate 2026 utility-scale analysis found a comparable pattern: one utility estimated that every 1,000 MW of new data center demand could lower monthly bills for existing customers by 1–2%.

How This Works

Electricity grids carry significant fixed costs: transmission lines, substations, and generation assets that cost roughly the same to maintain whether they're serving a lot of demand or a little. In regions that have lost major industrial customers over time, those fixed costs don't disappear — they get divided among a smaller remaining group of ratepayers, which pushes rates up for everyone left. A large, stable new industrial customer works the same way in reverse. Adding significant new demand increases the base of electricity sales those fixed costs are spread across, which can ease rate pressure on existing residential and commercial customers rather than add to it.

What actually drives electricity rates up?

The research consistently identifies three primary drivers of rising electricity rates: aging infrastructure that needs replacement, declining industrial load that shrinks the base over which fixed costs are shared, and policy-driven energy transition costs. These factors raise rates regardless of whether a data center is built nearby. A well-designed, firm-load industrial customer like a data center can help offset the second driver directly, by rebuilding the industrial demand base that keeps rates stable for residential customers.