Who Pays for Growth? Evidence from Data Centers and the Grid
Jun 18, 2026·,,,
Robyn Meeks
Jacquelyn Pless
Zhiyuan Qi
Zhenxuan Wang
Abstract
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.
Incidence
Infrastructure Investment
Electricty Prices
Technological Change
Rate-of-Return Regulation
Authors
Zhenxuan Wang
(he/him)
Assistant Professor
I am an applied economist with research interests in environmental, energy, and development economics. The central theme of my work is to understand the impacts of climate change, environmental risks, and energy system transitions, as well as the roles of policy, technological change, and behavioral adaptation in addressing these challenges.