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Have Data Centers Raised Your Electric Bill? Causal Evidence from the United States

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Listed:
  • Asa Watten
  • John Bistline
  • Geoffrey Blanford

Abstract

We estimate that data centers caused average retail electricity rates to fall modestly in the United States from 2015 to 2024 using an instrumental variables approach. Despite prevailing sentiment, the finding is consistent with economic reasoning: existing large power system fixed costs, economies of scale in transmission and distribution, and declining unit costs for generation imply that durable demand growth lowers average prices. We find patterns of economies of scale for transmission, distribution, and generation costs as well as within and across retail customer classes. We caution that future supply constraints could reverse the effect.

Suggested Citation

  • Asa Watten & John Bistline & Geoffrey Blanford, 2026. "Have Data Centers Raised Your Electric Bill? Causal Evidence from the United States," Papers 2606.19777, arXiv.org.
    • Handle: RePEc:arx:papers:2606.19777
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    References listed on IDEAS

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