Electricity costs have skyrocketed in the US in recent years, and many have been quick to place the blame on the rise of electricity-hogging data centres sprouting up everywhere—such as the mammoth facilities now fueling tools from OpenAI and xAI.
But it turns out that the rise of data centres may not have been the real, or the only, factor driving up electricity bills in recent years, according to new research from the Lawrence Berkeley National Laboratory, a non-profit research centre managed by the University of California for the US Department of Energy’s Office of Science.
The research, covered by The Wall Street Journal, found that state-level load growth in recent years has actually tended to reduce average retail electricity prices. Between 2019 and 2024, states with the highest electricity load growth experienced reductions in real prices on average, whereas states with contracting loads generally saw prices rise.
The researchers’ findings clearly clash with current public opinion. A recent survey from energy tech firm Arbor found that 70% of households have seen their electricity costs rise over the past year, and that nearly two-thirds blame the high energy demands of AI. In addition, only 20% of households say the benefits of the tech justify the cost.
The report found that a primary driver of increased electricity-sector costs in recent years has mainly been “distribution and transmission expenditures”—for example, the refurbishment or replacement of existing infrastructure. States with more overall demand for electricity give producers more consumers to spread these fixed infrastructure costs over, according to the research.
Other factors include the war in Ukraine, which has spiked the cost of natural gas since 2022, leading to increased costs for electricity firms in the US. The report also found correlations with natural disasters such as the wildfires in California and hurricanes in Florida that required wide-scale infrastructure repairs.
The research also pointed to how widespread adoption of solar panels in states like California reduced grid load, increasing electricity producers’ fixed cost per unit of electricity. The report highlights how energy producers in California received approval to pass wildfire costs to consumers.
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That doesn’t mean that the massive rollout of data centres won’t increase how much you pay per unit of electricity in the long term, only that the research implies the future is unclear and that there’s more than one factor involved beyond your state’s electricity use.
“Overall, our results cast doubt on the simple view that load growth will necessarily increase prices over the medium- to longer-term. Emerging evidence from 2025 suggests near-term impacts that can be either positive or negative; medium-tolonger-term effects are uncertain,” the paper concluded.
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