Data centers are actually making your electric bill cheaper—but sinking AI demand could change that - Fortune

What the report says

Fortune reported July 26 that new research challenges a common fear about data centers and power bills: historically, their growth may have helped lower average retail electricity prices rather than raise them. The article cites a working paper from the Electric Power Research Institute that used Federal Energy Regulatory Commission data and U.S. Energy Information Administration retail revenue figures from 2015 through 2024. The researchers found that each doubling of data center capacity was associated with a 3.5% decline in average retail electricity prices, with an estimated state-level drop of about 6%.

The explanation, according to EPRI researcher and coauthor Asa Watten as described by Fortune, is tied to how electricity systems recover fixed costs. When more electricity is consumed, grid and generation expenses can be spread across more kilowatt-hours and more customers. Additional demand can also bring more generators onto the system, including newer and more efficient resources.

Fortune emphasized that this past pattern may not hold as the AI infrastructure boom accelerates. Goldman Sachs has projected AI-related buildout could lift electricity costs by 6% from 2026 to 2027 and another 3% by 2028. PJM, the largest U.S. grid operator, recently estimated that data center demand will account for much of a $6.3 billion increase in consumer electricity costs over three years. In Virginia, a major data center hub, residential electricity prices rose more than 13% over the past year, according to EIA data cited by Fortune.

The key risk is a mismatch between grid investment and actual AI demand. If utilities and grid operators build expensive capacity for data center growth that does not materialize, those fixed costs could be divided among fewer users, pushing bills higher. Fortune frames the issue as central to both household energy costs and the durability of the AI investment boom.