AI Data Centers: Rising Energy Costs Land Hardest on Lower-Income Rural Households, Study Finds

Grid costs rose sharply

Data centers have become a focus of debate over who should pay for the power infrastructure they require. The study found they unevenly pushed up wholesale electricity prices in 2025, with the largest increases in grids that were already stretched.

Spending across the four power grids climbed from $2 billion in 2020 to $34.2 billion in 2025. Researchers attributed $8.25 billion in energy infrastructure costs last year to data centers. Residential users were responsible for just under $3.5 billion, but were billed more than $16 billion, compared with about $3 billion for data centers.

Households face larger bills

The study found that residents in rural and lower-income areas saw energy bills rise sharply. In some cases, their cost increases were 76% larger than those for people in urban communities.

Although data centers are concentrated near metropolitan hubs, researchers said the costs they trigger can reach suburban and rural areas. Regional policies determine how energy expenses are shared, and the researchers said those rules warrant review.

Costs cross state lines

Researchers also identified cases in which states faced price increases tied to data centers far away. They said residents could end up paying for infrastructure they do not contribute to or benefit from. New Jersey and Pennsylvania residents, for example, helped fund grid upgrades connected to data center growth in Virginia.

Researchers outline options

Fengqi You, one of the study’s authors, described the issue as “a chicken-and-egg problem” in a statement. Building a data center requires more power infrastructure, he said, even before the center begins using electricity.

The researchers proposed that data centers reduce electricity use during peak demand hours or pay states directly for the additional demand they bring to a grid. You said the team hoped its findings would help lawmakers decide what to do next, as data center regulation was a major focus of November’s midterm elections.