Bad newsData Centres Raise US Power Costs Most for Rural and Poorer Households, Study Finds
A Nature Energy study finds data-centre growth lifted wholesale power prices by more than 10% in the most exposed hubs by 2025, with rural communities facing burden increases 76% larger than urban ones.
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Cornell University researchers estimate that data-centre growth raised US wholesale power prices by more than 10% in the most exposed hubs by 2025. They say the cost lands hardest on rural and lower-income households. The study, published in Nature Energy, finds that rural communities bear energy-burden increases 76% larger than urban ones. CBS News reports that the work covers four major US power grids from 2020 to 2025 and data on 4,000 existing and proposed data centres.
The authors say the lowest-income households face extra energy burdens of up to 28 percentage points. They add that local economic returns are almost unrelated to spending, with a spending elasticity of 0.16, and that the states absorbing the largest burden increases capture the smallest returns.
Where the money goes
Wholesale prices rose unevenly. CBS says grids that were already stretched saw the largest increases. The study estimates that data centres raised wholesale prices by almost 20% in California’s southern Bay Area in 2025 and by nearly 17% in the Dallas–Fort Worth area. Places with fewer data centres, such as New York, saw no significant change.
The second channel is the cost of building transmission lines. Spending across the four grids rose from $2 billion in 2020 to $34.2 billion in 2025, CBS reports. Data centres were responsible for $8.25 billion of the 2025 spending. Residential users were responsible for just under $3.5 billion but were billed more than $16 billion, while data centres were billed about $3 billion.
Nature Energy says residential users are allocated a median of 47% of these costs even though they contribute far less to demand growth. The researchers say old allocation formulas divide costs by past consumption, not new growth, so households carry much of the cost of new infrastructure.
Who pays for someone else’s grid
CBS says the burden crosses state lines. Residents of New Jersey and Pennsylvania helped pay for grid upgrades tied to data-centre growth in Virginia, the researchers say, paying for infrastructure they neither contribute to nor benefit from. West Virginia and Ohio faced some of the largest cost increases while reporting the lowest use of generative AI of any state. The authors describe this as a mismatch between who pays and who uses the technology.
Fengqi You, one of the study’s authors, told CBS that a household does not have to live next to a data centre to help pay for its power infrastructure. He said the aim is evidence that policymakers, companies and communities can use.
What the authors propose
The researchers suggest that data centres cut their use during peak demand hours or pay states directly for the new demand they add. They argue that the policies on how costs are shared across regions deserve review. You said the data-centre sector should pay for the upgrades it needs, rather than other customers.
The household figures are estimates. The Nature Energy paper describes the 2025 burden increases as measured under a quasi-static counterfactual framework, which means they compare actual outcomes with a modelled world without the data-centre growth. The paper sits behind a subscription, and we read only its abstract and figure titles.
What would change the outcome is a change to the allocation rules the study identifies. Neither source says any regulator has proposed one. Until then, a household’s share of a new transmission line depends on its past use, and a data centre’s depends on the same formula.
