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Are Data Centers Raising Electricity Prices?

Updated September 04, 2026

The evidence so far says no, but that could change. A June 2026 study by researchers at the Electric Power Research Institute estimates that data centers caused average US retail electricity rates to fall modestly from 2015 to 2024, using a causal design built to rule out the objection that data centers simply chose cheap-power states. Descriptive state-level comparisons point the same way: states with more data centers do not have higher or faster-rising rates, and states where electricity sales grew fastest saw the smallest price increases. The mechanism is scale: grids carry large fixed costs, and durable new demand spreads them over more kilowatt-hours. Both lines of evidence carry the same caution: this is the record to date, and future supply constraints could reverse it.

The causal evidence

“Have Data Centers Raised Your Electric Bill? Causal Evidence from the United States” (Watten, Bistline, and Blanford, June 2026; EPRI brief) is the strongest evidence available on this question, because it confronts the selection problem directly: data centers might locate where power is cheap, which would mask a price-raising effect in simple comparisons. The authors instrument data-center siting with the length of the 1947 Eisenhower Interstate Highway Plan in each state. Fiber-optic backbone follows the interstate corridors, data centers follow fiber, and a 1947 road plan cannot have been caused by today's electricity prices (conditional on population and GDP). Their estimate: data-center growth lowered average retail rates modestly over 2015–2024, with economies of scale visible in transmission, distribution, and generation costs.

The study's own caution deserves equal billing: the result describes a period when the grid had spare capacity to absorb new load. The authors write that future supply constraints, such as generation and equipment backlogs, could reverse the effect if buildout cannot keep pace.

The descriptive evidence

Simpler state-level comparisons, which cannot establish causation but describe the record directly, agree with the causal result. The Institute for Energy Research published one in March 2026:

What about PJM capacity prices?

The place a future price effect would appear first is capacity markets, which price scarcity years ahead. In PJM, the largest US grid region and the center of data-center growth, the last three capacity auctions cleared at their price caps, and PJM wrote that its December 2025 auction “leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply.” Capacity charges phase into retail bills delivery-year by delivery-year (June through May), on schedules that vary by state and supplier. That is the supply-constraint channel both studies flag, and it is why this page's answer is about the record so far, not a prediction. The full PJM story, including what capacity prices have done and what they mean for bills in PJM states, is on why is my electric bill so high?

How to read the evidence together

For how much electricity data centers actually use, see data center energy use.

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