Data Centers: Power-hungry but price-friendly
News ClipMagnolia Tribune·MS·4/1/2026
Mississippi is well-positioned to maintain its competitive advantage as a low-cost energy state, largely due to growth from data centers. Contrary to a common myth, research suggests that adding large electricity users can reduce retail electricity prices, especially when these customers fund new infrastructure. Inflation and state-level policy choices are identified as primary drivers of electricity price increases, not data centers.
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Gov: Mississippi State Government, Entergy Mississippi
The exponential growth of the AI and data economy is driving an unprecedented demand for electricity, necessitating a rapid expansion of electric infrastructure across the U.S. Mississippi is experiencing significant activity in new power plant and system upgrades, largely attributed to an influx of data storage projects.
Patrick Sullivan, writing for the Magnolia Tribune, addresses concerns that large electricity consumers like data centers will inflate electricity bills. He refutes this widespread myth, citing research from Lawrence Berkeley National Lab (2025) which indicates that adding new, large customers can actually exert downward pressure on retail electricity prices. The study found that recent electricity price hikes, especially from 2022-2025, were primarily driven by high inflation and geopolitical events like the Ukraine-Russia war, not data centers. Furthermore, certain state-level policies, such as subsidized behind-the-meter solar and renewable portfolio standards, were linked to higher bills in states where they were enacted, a situation Mississippi has avoided.
Additional research by the Institute for Energy Research (IER) in its report "Blue States, High Rates" supports the notion that state policy choices significantly impact electricity affordability. The IER found that states prioritizing dispatchable, affordable generation consistently offer lower electricity prices. Mississippi, identified among states with below-average rates (16% lower than the national average), exemplifies this approach.
The Berkeley team's findings align with claims by Mississippi state leaders and utility executives, including Entergy Mississippi, which notes that adding large customers like Amazon Web Services (AWS) can reduce electricity prices and local taxes. Entergy Mississippi recently announced that its customers are projected to save $2 billion over time due to these large data centers and reported a $300 million increase in grid strengthening projects, entirely funded by new data center revenues. With U.S. power demand projected to rise by 40% in the next decade, Mississippi aims to leverage its energy strengths to continue benefiting from this industrial growth.