From 2015 to 2024, average U.S. retail electricity prices fell 3.5 percent for every doubling of data center capacity, according to a working paper from the Electric Power Research Institute using Federal Energy Regulatory Commission and Energy Information Administration data. Researchers said the effect came largely from economies of scale, as fixed grid costs were spread across more electricity consumed.
That trend is now at risk. PJM Interconnection, the nation's largest grid operator, projected in a recent report that data center demand will drive a $6.3 billion increase in consumer electricity costs over the next three years. Data center construction spending is expected to reach $7 trillion by 2030, and in Virginia, the state with the most data centers, residential electricity prices have already risen more than 13 percent over the past year.
Asa Watten, an EPRI researcher and coauthor of the working paper, said the future direction of prices depends on whether AI demand for computing capacity matches what the grid is being built to supply. If utilities add generating capacity anticipating data center demand that does not materialize, the fixed costs of that buildout would be spread across fewer users, pushing prices higher rather than lower.
Goldman Sachs has projected the AI infrastructure buildout will raise electricity costs 6 percent between 2026 and 2027, with an additional 3 percent increase by 2028. A YouGov poll found more than two-thirds of Americans expect electricity prices to rise if a data center is built in their area.
Source: Fortune -- https://fortune.com/2026/07/26/data-centers-electricity-costs-cheaper-7billion-buildout-ai-demand/