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ESIG/Brattle paper (shared 2026-05-12) states

Brief

Aniruddh Mohan highlights a 2026-05-12 ESIG/Brattle paper (with a clarifying graphic) showing that large new electricity loads do not automatically raise or lower retail rates. Impacts depend on system-specific factors; Mohan warns unhedged utilities can pass higher costs to customers (notably in PJM), while Matthew Yglesias notes reduced prices are possible but not guaranteed.

Why it matters

ESIG/Brattle paper (shared 2026-05-12) states: “The rate impact of large loads is not a foregone conclusion in either direction” and depends on utility system conditions, prevailing market dynamics, market design, regulatory framework, and rate design.

Key details

  • Rates for existing customers can rise if a utility has not fully hedged added large loads — Mohan cites examples among PJM ratepayers.
  • Matthew Yglesias: adding a big new demand like a data center “absolutely COULD reduce consumer electricity prices” by spreading fixed costs, but whether that occurs is case-specific.
Source evidence

Right. Here's a new paper from ESIG/Brattle with a great graphic to cut against simplistic narratives of data centers always increasing/reducing rates for existing customers.

TL;DR - it depends. For e.g. your rates can go UP if your utility has not fully hedged. Just ask some ratepayers in PJM!

As the paper put it:
"The rate impact of large loads is not a foregone conclusion in either direction. It is an empirical question that depends on the specific conditions of the utility system, prevailing market dynamics, market design, regulatory framework, and rate design."

Matthew Yglesias (@mattyglesias)

Adding a big new source of demand like a data center absolutely COULD reduce consumer electricity prices (by spreading fixed costs across more customers) but this game of telephone is losing the thread on whether that’s actually what’s happening in any given case.

— https://nitter.net/mattyglesias/status/2054166549649375254#m