Steidler: Data centers start to drive residential electricity bills down
Several major electric utilities in states including Georgia, Arkansas, Louisiana, Mississippi, and Indiana are reducing residential electricity rates. This is attributed to data center customer agreements that enable investments in new power plants and grid improvements. These actions counter the narrative that data centers solely drive up electricity costs.
Paul Steidler, a Senior Fellow with the Lexington Institute, contends that data centers are positively impacting residential electricity bills by facilitating substantial investments in power generation and grid infrastructure. He challenges the perception that data centers are a primary cause of increased electricity costs, citing recent regulatory and utility actions across multiple states.
The Georgia Public Service Commission (PSC), for example, approved a plan on May 27 to reduce typical residential rates by about $50 annually, resulting in $285 million in total savings. This followed a January 2025 measure by the Georgia PSC that established specific billing terms for large customers, including data centers, requiring them to cover costs for "upstream generation, transmission, and distribution" through contracts up to 15 years.
Entergy also announced on March 5 that data center agreements in Arkansas, Louisiana, and Mississippi would generate approximately $5 billion in savings for 2.3 million customers over two decades, alongside significant new investments and job creation. Similarly, American Electric Power's Indiana Michigan Power (I&M) plans to decrease base rates for its 600,000 customers, crediting load growth and increased revenue from large data center customers. Steidler references a May 2026 study from Energy + Environmental Economics, which found that blaming data centers for higher electricity costs is unfounded, and points out that states with high data center concentrations, like Virginia and Texas, have lower residential electric rates than the national average.