Study: Data center energy costs hit lower income households hardest
Summary
A Cornell University study published in Nature Energy found that data center growth raised electricity costs in 2025, with lower-income and rural households bearing a disproportionate share of the burden. The researchers said current methods for allocating grid infrastructure costs can leave residents paying more even when data centers drive new demand.Key Facts
- The study analyzed energy demand and infrastructure projects on four major U.S. power grids from 2020 to 2025, along with data on 4,000 existing and proposed data centers.
- Researchers estimated that data centers raised wholesale power prices by nearly 20% in California’s Southern Bay Area and nearly 17% in the Dallas-Fort Worth area in 2025.
- The study found that spending on energy infrastructure across the four grids rose from $2 billion in 2020 to $34.2 billion in 2025.
- Researchers attributed $8.25 billion of 2025 infrastructure costs to data centers; residential users were billed more than $16 billion, compared with about $3 billion for data centers.
- Rural and lower-income residents sometimes faced energy cost increases 76% greater than those experienced by urban residents.
- The researchers said cost-allocation formulas based on past electricity use can shift the costs of new infrastructure onto households.
- The study reported that states with some of the largest data-center-linked price increases, including West Virginia and Ohio, also reported relatively low use of generative AI.
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