New Study Finds No Link Between Rising Electricity Rates and AI Data Centers

Key Points:

• A new analysis by the Institute for Energy Research (IER) finds no measurable correlation between the rapid growth of AI data centers and rising consumer electricity prices in various U.S. states, with electricity costs in top data center states comparable to other states.
• The study reveals that states with faster economic growth and higher electricity sales from 2015 to 2025 experienced smaller electricity price increases than slower-growth states, contradicting the notion that rising demand from data centers drives up prices.
• Despite a 131% increase in U.S. data center electricity consumption from 2018 to 2023, including a 159% rise in Meta’s data center power use, this surge does not correspond with higher electricity prices or faster rate increases in states with significant data center activity.
• The IER report challenges popular media and political claims that data center expansion causes higher electricity prices, noting that data centers tend to locate in states with already affordable and reliable power.
• In response to concerns about AI-related energy demand, seven major tech companies including Google, Meta, Microsoft, and Amazon have signed President Trump’s Ratepayer Protection Pledge, committing to cover the full costs of new energy resources to prevent electricity price hikes for consumers.