Sullivan: Data Centers - Power-hungry but price-friendly

In an opinion column for The Northside Sun, Patrick Sullivan, President of the Mississippi Energy Institute, argues that Mississippi is uniquely positioned to benefit from the burgeoning data economy and AI's intense electricity demands. Sullivan contends that the perception of data centers always increasing electricity costs is a myth. Instead, he highlights research from Lawrence Berkeley National Lab suggesting that adding large load customers, like data centers, can actually put downward pressure on retail electricity prices, especially when these customers cover the cost of new capacity and infrastructure upgrades. The column notes that high inflation, not data centers, was the primary driver of electricity price increases between 2022 and 2025. Furthermore, the Berkeley team found that certain state-level policies, such as widespread subsidized solar and renewable portfolio standards, contributed to higher bills in other states, a path Mississippi has avoided. This aligns with findings from the Institute for Energy Research (IER), which identified a correlation between aggressive renewable mandates and higher electricity prices in 'Blue States,' while 'reliably red' states like Mississippi maintain below-average rates. Sullivan points to tangible benefits in Mississippi, citing Entergy Mississippi's announcements that customers are expected to save $2 billion over time due to large data centers like Amazon Web Services (AWS) joining their system. Entergy also announced a $300 million investment in local grid strengthening and reliability projects, entirely funded by new revenues from data centers. Sullivan concludes that good public energy policy and industrial growth are critical for maintaining low-cost electricity, and Mississippi is well-prepared to leverage its energy strengths to benefit from the projected 40% increase in U.S. power demand over the next decade. Patrick Sullivan, a resident of Madison, MS, has led the Mississippi Energy Institute since 2011, focusing on research and energy policy to foster economic growth. He also serves as President of the Southeast Oil and Gas Association and Chairman of the State Workforce Investment Board.