Study claims data centers do not drive up price of electricity

The Institute for Energy Research recently released a study asserting that data centers are not responsible for rising electricity prices, a common claim made by critics of the industry. The Institute's report, based on data from the Energy Information Administration (EIA) for all 50 states, found no statistically significant correlation between the number of data centers in a state and its current electricity prices, nor between data center concentration and faster increases in rates. The study challenges the intuition that growing electricity demand from data centers directly leads to higher prices, despite acknowledging that data center growth does drive demand. For instance, a Lawrence Berkeley National Laboratory (LBNL) study prepared for the U.S. Department of Energy indicated that U.S. data center consumption surged 131% from 2018 to 2023, largely due to AI workloads and increased server bases. Meta's data center consumption alone reportedly rose 159% between 2020 and 2024. Data center opponents have frequently cited concerns about electricity prices and consumption in their efforts to pass legislation, including moratoriums on construction. Oklahoma's legislative session has seen several data center-related bills, and a moratorium bill was also introduced in Congress. The Institute's research presents a counter-argument to these legislative attempts, pointing to state-level data where states with large sales gains saw significantly lower average price increases compared to those with sales declines.