Do data centers really increase electricity prices?

A new podcast episode digs into a question a lot of homeowners have been asking: do data centers make electricity bills go up? The answer, according to Energy Impact Partners researcher Andy Lubershane, depends on whether you're looking locally or nationally.

Locally, near a specific data center, rates often hold steady or even drop a bit. That's because utilities negotiate special contracts with these huge customers, making sure the data center pays enough to cover its share of costs, sometimes more. A recent EPRI study found that, on average, data centers have lowered nearby customers' bills by around 6 percent so far. Utilities are increasingly willing to promise rate cuts to win public support, since surveys show many people already oppose data centers over worries about energy use and cost.

Nationally, the picture is different. The rapid buildout of data centers is straining supply chains for nearly everything utilities need: conductors, transformers, switchgear, and gas turbines have roughly doubled in price, and skilled labor is scarce. Combined with rising interest rates, tariffs, and the eventual expiration of renewable energy tax credits, these pressures are pushing electricity costs higher across the board, not just where data centers are built. So a homeowner might see a stable or lower bill if a data center lands in their own utility territory, while still facing higher costs over time from broader industry-wide price pressures. The guests suggest that home energy efficiency upgrades and flexible use of electricity (shifting when you use power) could help offset some of that national cost creep.