Data Centers Lead to Lower Electric Bills, Utilities Report
New data from utilities in Indiana, Georgia, and Texas indicates that data centers, despite their high electricity consumption, can actually lead to lower electric bills for residential customers. This is due to increased revenue from large customers like data centers helping to offset fixed grid costs. The findings come amid growing political opposition to data centers' energy use, with some calling for moratoriums.
New data obtained by the Washington Reporter from utilities across the country suggests that data centers, often criticized for their significant electricity consumption, can contribute to lower electric rates for residential customers.
Indiana Michigan Power is seeking regulatory approval for a rate cut in Indiana that would save the average residential customer approximately $100 annually, totaling $59 million in projected savings by 2027. The utility attributed this plan to "load growth and increased revenue from large customers including data centers." Indiana Gov. Mike Braun, a proponent of data center development, highlighted how this investment can lead to "lower utility bills, long-term rate certainty and continued investment in our electric system."
Similarly, CBS News reported that Georgia Power anticipates revenue from OpenAI and other large customers could save typical residential customers about $15 per month, or $180 annually, starting in 2029. OpenAI is also responsible for the infrastructure costs associated with its large data center in Effingham County. In Texas, CenterPoint Energy projects $5 billion in savings for electric customers over the next decade, as new large-load customers contribute more to the fixed costs of the electric grid.
These developments occur as data centers face increasing political opposition regarding their electricity usage. Sen. Bernie Sanders (I-Vt.) has advocated for a moratorium on new AI data centers, while Sen. Tim Sheehy (R-Mont.) has countered, arguing that such actions would destroy future jobs. The utility data, projecting significant customer savings, supports Sheehy's perspective that data centers can offer economic benefits despite their high power demands.