Who Pays for Growth? Evidence from Data Centers and the Grid

Robyn Meeks, Jacquelyn Pless, Zhiyuan Qi, and Zhenxuan Wang

June 2026 (Revised October 2026)

Who bears the costs when technological change requires new infrastructure? By linking U.S. data center entry from 2010 to 2024 to electric utilities’ prices, investments, and regulatory outcomes, we find that data center entry raises average retail rates by 2.7% and residential retail rates by 2.1%. Effects are concentrated among investor-owned utilities (5.6% on average) and are larger in restructured electricity markets. Infrastructure investment and utilities’ authorized rate bases increase, but price effects are lower where utilization improves. These findings suggest that the incidence of infrastructure-intensive technological change depends on system conditions and the institutions governing investment and cost recovery.

Keywords: data centers; incidence; infrastructure investment; electricity prices; technological change; rate-of-return regulation

JEL Codes: Q41, L94, H23, L51, O33