POLICY WIRE FACT CHECK: Data Centers and Electricity Prices: The Complexity Behind Viral Claims
The Claim In the lead-up to midterm elections, a viral narrative has emerged asserting that the rapid expansion of data centers is the primary driver behind rising electricity costs for Americans....
The Claim
In the lead-up to midterm elections, a viral narrative has emerged asserting that the rapid expansion of data centers is the primary driver behind rising electricity costs for Americans. This claim has been heavily promoted through political advertisements in key battle states like Ohio, Texas, Pennsylvania, and Michigan. For instance, ads from Democratic candidate Sherrod Brown claim that ‘no one asked for that data center to be built here, and no one here is getting a damn thing from it except higher electric bills.’ Similarly, ads in Texas allege that state-level support for these facilities has directly led to ‘skyrocketing utility bills.’
Countering these local claims, Department of Energy Secretary Chris Wright has asserted that data centers are actually a ‘massive force to reduce the price of electricity.’ Wright argues that the arrival of data centers is often accompanied by multi-year freezes in electricity prices, leading to a gradual decline in real terms. This has created a polarized public discourse where voters are told either that data centers are a drain on their wallets or a stabilizing force for energy markets.
The Details & Investigation
Our investigation reveals that the relationship between data centers and electricity prices is far more complex than simple cause-and-effect narratives. Data from the Lawrence Berkeley National Laboratory (LBNL) shows that while national electricity prices rose by 29% between 2019 and 2025, that figure drops to just 3% when adjusted for inflation. The primary drivers for this increase are rising fuel costs (specifically natural gas), the high cost of updating aging grid infrastructure, labor shortages, and supply chain constraints. In several states, including North Dakota, New Mexico, and Nebraska, electricity demand grew significantly while inflation-adjusted prices actually declined.
The most significant exception occurs in the PJM Interconnection region, the nation’s largest grid operator serving over 65 million people in the Midwest and Mid-Atlantic. In this specific market, data centers have indeed contributed to rising costs. This is largely due to the ‘capacity market,’ a mechanism that pays suppliers to ensure electricity is available for future demand. Because PJM’s estimates of future demand were reportedly wildly overstated, capacity prices rose nearly tenfold. In regions like western Maryland and Ohio, these capacity charges are estimated to add $16 to $18 to the average monthly household bill, with 63% of that increase attributed to anticipated data center load.
Experts like Jacquelyn Pless of MIT note that whether data centers push prices up or down depends on two critical factors: the cost of serving new demand and who pays for the required infrastructure. If a grid has spare capacity (underutilized resources), data centers can actually benefit consumers by paying a larger share of the fixed costs of the grid, potentially lowering rates for others. However, if a grid is already constrained and lacks room, the massive energy requirements of data centers—which use 10 to 100 times more power than previous generations—will drive prices upward as new infrastructure is forced to keep up.
Regarding the nature of these claims, the assertion that data centers are the *sole* cause of rising bills is considered MISINFORMATION, as it ignores broader economic factors like inflation, fuel prices, and grid aging. Conversely, Secretary Wright’s claim that data centers ‘always’ reduce prices is also MISLEADING, as it overlooks the documented price spikes seen in regions like PJM where capacity is at its limit. The reality is that data centers are a variable factor whose impact depends entirely on the specific grid health and regulatory environment of the local utility area.
The Verdict
The viral claim that data centers are the primary cause of skyrocketing electricity bills is MISLEADING. While they have contributed to significant price increases in specific markets like the PJM region due to capacity market fluctuations, they are not the principal driver of national price trends. In most of the country, inflation, fuel costs, and infrastructure modernization are the actual culprits for rising rates.
Furthermore, the claim that data centers universally lower prices is also HALF TRUE. The impact of these facilities is highly contingent on whether the local grid has excess capacity to absorb the load or if the demand forces expensive, necessary infrastructure upgrades.
em>Counter-misinformation & disinformation investigation conducted by PolicyWire Editorial Desk (PW).
