Electricity bills are going up. At the same time, data centers are springing up all over the United States, demanding more energy infrastructure be built to support them. And everywhere from community town halls to the White House, debate is on about how much those data centers are contributing to the rate increases.
Previous research, including an October 2025 Lawrence Berkeley National Lab report, has found that it’s not straightforward — but data centers certainly aren’t wholly to blame. Two significant contributors are “poles and wires” costs as utilities upgrade aging infrastructure, as well as extreme weather recovery and mitigation. Load growth, those researchers found, is actually correlated with lower rates. (The report was updated with newer data just two months ago, and came to the same conclusion.)
In the last week, two more reports have landed, from the utility-owned research group EPRI and Columbia University’s Center on Global Energy Policy, complicating things further.
EPRI’s analysis would seem to exonerate data centers. It also found that the growth of data centers is associated with lower retail electricity rates — 6% lower on average between 2019 and 2024 — for two reasons. First, economies of scale. The electricity system is set up so that all ratepayers pay for fixed costs like transmission and distribution, and more demand means those costs are shared more widely. Second, the costs of building new energy infrastructure has dropped, meaning that new generation tends to be cheaper than the older assets it replaces.
However, there are caveats. For example, building new infrastructure to support the new demand gets a lot more challenging with supply chain constraints like turbine backlogs or transformer shortages.
Furthermore, the effect of data centers putting downward pressure on rates only endures if the demand holds up. If an AI bubble pops, it’s the remaining ratepayers that will pay for it: “Demand that fails to materialize leaves utilities recovering fixed costs across fewer kilowatt-hours, reversing the mechanism” that has lowered prices so far, the researchers wrote.
The biggest caveat of all, however, is that the EPRI analysis didn’t touch 2025 or 2026. The AI infrastructure boom was still in early days by the end of 2024 — when there was still excess capacity on the grid and generation costs were falling thanks to cheap gas and declining renewables costs. But the grid looks a lot different today, and is changing fast. Infrastructure is being built at an emergency pace, and many places are having to hunt for new capacity, which changes the economies-of-scale logic.
The Columbia report is a synthesis of several roundtables that the center held with stakeholders including regulators, tech companies, and utilities. And it covers the pivotal year of 2025, when price increases accelerated, and consumer upset followed.
The report, which was supported by Google, argues that rising rates are more a function of the structure of the power system than of load growth on its own. These include “inefficient infrastructure planning, misaligned utility incentives, slow permitting, supply chain inflation, and reactive climate risk management,” and vary by state. However, like fuel on a fire, load growth is an accelerant for each of these pressures.
From 2019 through 2024, residential electricity rates roughly tracked inflation. In 2025, though, they jumped by 6%, more than twice the rate of inflation. Investor-owned utilities requested $31 billion in rate increases in 2025 alone — and have requested to spend a whopping $1.4 trillion through 2030, according to a PowerLines estimate.
Like EPRI, the Columbia researchers found that the places with highest demand growth have seen inflation-adjusted rates decline. However, as Robin Millican, one of the report’s authors, wrote on LinkedIn, “This outcome is not automatic. It depends on supply availability, cost allocation, and tariff design. Get those right, and growth is an asset.”
So what?
This should all be good news for hyperscalers. But will any of this research matter when it comes to actually powering data centers — or shifting public opinion?
The 2026 data center backlash is a lot more complicated than high bills alone. The communities reluctant to host a hyperscaler are concerned about water use and other environmental impacts, as well as the cultural impact of turning over so much land to an often faceless tech giant. A recent survey by Heatmap found that 71% of Americans would oppose building a data center near their home.
So even if data centers are not to blame, they’re a convenient scapegoat for an American public that is increasingly enraged about rising electricity bills. Utility commission hearings are suddenly packed; companies, and especially data center developers, are facing protests when they try to build; and most utility CEOs are now traveling with bodyguards. And political sentiment is often more powerful than all the research in the world.
And even the White House is pushing the idea that there’s a direct, proven link between high power prices and data centers — and is making policy changes accordingly. Under President Trump’s “ratepayer protection pledge,” major tech companies said in March that they will pay for the cost of energy infrastructure to serve new data center load and negotiate separate rate structures with utilities and state government, among other things.
While that pledge has no enforcement mechanism, several binding utility tariffs that encourage much the same thing already exist, with the majority of those having been filed in the last two years alone. An analysis by Latitude Intelligence found that these rate structures introduce entirely new mechanisms, such as contract commitments specifically designed to protect ratepayers.
Meanwhile, House Republicans are pushing the “Ratepayer Protection Act” as a way to protect the public from data center development. It would put legal heft behind the White House pledge, requiring state regulators to consider a federal standard for recovering costs from upgrading the grid to serve large loads.
Microsoft and Google have both endorsed the bill, though the industry trade group the Data Center Coalition has stopped short. And while the bill has co-sponsorship of Democrat Kathy Castor (Fl.), other Democrats on the committee have also been reluctant; Sen. Chris Van Hollen (D-Md.) told E&E News that the legislation is “a step in the right direction,” but “doesn’t address many of our concerns and leaves significant gaps in ensuring American consumers aren’t ultimately left paying data center costs.”
The bill is scheduled for a subcommittee vote this week.
