INSIGHTSSERIES
Power & Utilities | Smart Grid
November 3, 2025
Data Center Growth Spurs State Regulators to Revisit Rate Design and Cost Allocation
States are creating dedicated rate classes for large load customers as federal agencies move to accelerate AI infrastructure expansion.
A growing number of states are establishing distinct rate classes and tariffs for large energy users, such as data centers, to ensure these customers bear the full costs and risks of their significant grid impacts and protect…Read the full report
Key Takeaways
- U.S. electricity consumption is projected to grow at an average rate of 1.7 percent per year from 2020 through 2026 with commercial and industrial sectors growing faster, at 2.6 percent and 2.1 percent per year, respectively, according to EIA.
- Utility regulators across the U.S. are reexamining rate structures for large energy users as data centers expand at an unprecedented pace, with far-reaching implications for energy supply, electricity prices, transmission planning, and grid reliability.
- These state initiatives are unfolding alongside federal efforts to accelerate data center deployment through streamlined permitting, infrastructure development, and regulatory reforms to support artificial intelligence.
