Data centers raise Southwest power costs, study finds as Heinrich seeks ratepayer protections
A Federal Reserve Bank of Dallas working paper estimates that data center demand raised wholesale electricity prices in the Arizona-New Mexico power region by 8.6% in 2024 and 2025, with a larger increase projected by 2028. Sen. Martin Heinrich is backing bipartisan legislation that would require large data centers to pay for the grid infrastructure costs they create, while questions about those impacts are emerging around Project Jupiter in Santa Teresa.
A Federal Reserve Bank of Dallas working paper estimates that data center demand increased wholesale electricity prices in the Arizona-New Mexico region by 8.6% during 2024 and 2025. The study projects a 14.7% increase by 2028 under continued growth, while cautioning that the modeled wholesale effects do not directly establish how much household utility bills would rise.
U.S. Sen. Martin Heinrich, D-N.M., is supporting the bipartisan American Affordability and Jobs Act of 2026, which would require data centers and other high-density computing facilities to cover incremental generation, storage, transmission and distribution costs. The legislation has not become law and would require federal and state regulatory action.
The issue is also relevant to Project Jupiter, a proposed data center development in Santa Teresa that is pursuing a separate state permit for a natural gas-powered energy facility. The research does not estimate Project Jupiter's specific costs or rate effects, and the project's proposed on-site generation could affect how federal grid-cost requirements apply.