08/30/2026
Data centers have not been driving up electricity bills, according to a new working paper from researchers at the Electric Power Research Initiative (EPRI). In fact, EPRI estimates that data centers pushed average U.S. residential electricity rates down between 2015 and 2024.
As data centers have multiplied, some communities have raised concerns that the new demand could raise household bills, but the data tells a more encouraging story, one with real life implications for how the country powers the AI boom.
How Data Centers Are Driving Bills Down:
According to EPRI’s study, for every 10 percent increase in data center capacity there was a 0.4 percent drop in residential electricity rates. However, the study’s causal estimate runs larger, meaning that for the average residential customer who lived in a state where data center capacity grew 160 percent from 2019 to 2024, rates fell about 6 percent.
The reason is straightforward. The power system carries enormous fixed costs, so spreading those costs across more electricity sales lowers the average price per kilowatt-hour. Data centers supply large, steady, long-term demand. That demand also anchors investment in new transmission, distribution, and generation, and because newer equipment runs cheaper and more efficiently than the aging assets it replaces, the whole system becomes more affordable.
At the same time, data centers are helping to build a smarter, more reliable grid. Many major operators have committed to financing and accelerating major grid modernization with new substations, transmission upgrades, and more. This benefits entire communities and helps bring down costs across the board.
Data centers have not been driving up electricity bills, according to a new working paper from researchers at the Electric Power Research Initiative (EPRI). In fact, EPRI estimates that data centers pushed average U.S. residential electricity rates down between 2015 and 2024.