Report: Data Center Development Not Driving Up Electric Bills
A new report from Charles River Associates found that retail electricity rates have largely tracked with inflation during the past 10 years.
Americans’ electric bills have been widely protected from increases related to data center development, according to a new study from Charles River Associates (CRA) that shows average retail electricity rates have largely tracked with inflation during the past 10 years.
The report compiled data from the U.S. Energy Information Association and Federal Energy Regulatory Commission and found that while electricity rates vary widely by geographic location, “for most customers, rates have been largely stable.” Where rates did increase, “the timing and location of the rate increases that were observed are not consistent with the timeline of data center development.”
“This analysis underscores the important work America’s electric companies do every day to keep electricity reliable and make bills as low as possible,” said Drew Maloney, EEI President and CEO. “While CRA’s report makes clear that our industry is making good progress for most of the country, we also understand we have more work to do as we serve American families and local businesses.”
Among the report’s key findings:
- There is not a broad, national trend toward rising rates, which means some of the data driving national narratives are “misleading or misinterpreted.”
- In a handful of locations, rates have risen in recent years, driven by external drivers and operating expenses such as wholesale price increases, wildfire spending, and net energy metering programs.
- With the exception of some areas served by the PJM Interconnection, data centers are not driving up rates. New data center tariffs and agreements will insulate existing customers from the costs of serving data centers.
America’s investor-owned electric companies have been working with hyperscalers, regulators, and state and local officials to implement special tariffs that protect residential customers while ensuring large customers pay their fair share to access the grid. To date, 18 states have approved large load tariffs, with decisions pending in another 8 states.
Outside of the PJM Interconnection, customers have largely been protected from cost increases related to data centers. EEI and its member companies have long called for reform to PJM that would improve accountability and transparency, proactive resource planning, and procurement flexibility. EEI supported the January announcement from President Donald Trump and a bipartisan group of governors from states served by PJM calling for an emergency auction to require technology companies to fund new electricity generation needed to serve growing data center demand.
Read the full study here, and learn more about how electric companies are delivering value for customers at eei.org/affordability.