WASHINGTON DC (03/19/2026) – Today, the Institute for Energy Research released new analysis on data centers and electricity rates. The report, Have Data Centers Driven Up Electricity Prices?, shows that there is no statistically significant relationship between data center concentration and faster increases in electricity rates. This report follows up on the oft-cited Blue States, High Rates report, further demonstrating that high electricity rates result from state-level policy choices.
Institute for Energy Research President Tom Pyle released the following statement:
“There has been a lot of finger-pointing lately from politicians looking to shift the blame for rising utility bills to the build-out of data centers. Demand is growing quickly, and, without a doubt, they use a lot of power. But when you look at the actual numbers, that story doesn’t hold up. IER’s new report shows that data centers are simply not causing higher electricity rates. While that may change in the future, the evidence does not support that claim today.
“States with the most data center activity are not the ones seeing higher electricity rates, nor are their prices rising faster than in other states. What really shapes your monthly utility bill comes down to the decisions being made in state capitals about how power is generated, regulated, and priced. The bottom line is that policy choices drive outcomes, and prices reflect those choices. Politicians can try to sell a different story, but the numbers don’t lie.”
Key Findings:
- No Statistical Correlation: There is no significant correlation between the number of data centers in a state and its current electricity prices.
- Identical Costs: The top 10 data center states (including Virginia, Texas, and California) averaged 14.46¢/kWh in 2025, virtually identical to the 14.39¢/kWh average for all other states.
- Growth Does Not Drive Rates: Data shows no statistically significant relationship between data center concentration and faster rate increases from 2015–2025 or 2021–2025.
- The “Fixed Cost” Advantage: States with faster growth in electricity sales saw lower price increases. High-growth states (2015–2025) averaged a 20.0% price increase, while low-growth states averaged 39.4%.
IER Experts Available For Interview On This Topic:
- Tom J. Pyle, President
- Kenny Stein, Vice President of Policy
- Alexander Stevens, Manager of Policy and Communications
- Daniel Simmons, Adjunct Fellow
Additional Background Resources From IER:
- Have Data Centers Driven Up Electricity Prices?
- Blue States, High Rates
- The American Energy Blueprint
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