New Analysis Shows How Electric Companies Are Protecting Customers as Data Center Demand Grows

New Analysis Shows How Electric Companies Are Protecting Customers as Data Center Demand Grows

New Analysis Shows How Electric Companies Are Protecting Customers as Data Center Demand Grows

Charles River Associates examines safeguards designed to ensure data centers pay the costs to serve them and help keep electricity as affordable as possible for all customers

WASHINGTON (October 20, 2026) - Electric companies are working with state regulators to ensure data centers pay the costs associated with serving them, protect existing customers, and help keep electricity as affordable as possible, according to a new analysis published by Charles River Associates (CRA).

The update builds on CRA's earlier study, released in February, which found that electricity rates remained relatively stable in most states and that data centers were not responsible for the largest rate increases. The new analysis finds that electric companies and state regulators have acted quickly to adopt best practices that protect customers from negative impacts when data centers connect to the grid. It also finds that, when data centers pay their full share, serving them can lower rates for other customers.

"Our focus is on protecting existing customers and communities and strengthening the grid we all rely on," said EEI President and CEO Drew Maloney. "We are working with state officials every day to ensure data centers pay their full share and families and small businesses do not pick up the tab."

"We again found retail ratepayers have been well protected from adverse impacts from data centers," said Matthew DeCourcey, Vice President, Charles River Associates. "Utilities and regulators have found and implemented a set of best practices to ensure that data centers pay their own way and that their costs aren't subsidized by existing customers."

Key findings include:

• Customer protections are being strengthened. CRA concludes that "utilities and state regulators have acted quickly to adopt … best practices … to protect customers from negative impacts when data centers are added to the electric grid." These protections ensure data center customers are not subsidized by other customer classes and shield other ratepayers from stranded-cost risks.
• Serving data centers can lower rates for other customers. CRA identified more than 20 relevant data center proceedings decided by regulators in 16 states during 2025 and 2026. Regulators consistently approved new large-load rates and specialized agreements, and CRA writes: "In the proceedings we reviewed, regulators found that data centers lower rates for other customers." The update also identifies emerging opportunities for data centers to support grid resilience and reliability.
• Electric companies must demonstrate that customers are protected. CRA writes that electric companies seeking to serve data centers must demonstrate that they have selected a suite of protections against cost subsidies and stranded costs. CRA identifies eight practices, including requiring data centers to fund necessary infrastructure, sign long-term contracts, pay minimum bills and early-exit fees, and provide financial guarantees.
• Regional market reforms are advancing. CRA attributes changes in average U.S. rates largely to significant increases in specific regions, including the Northeast. Identifiable drivers include higher wholesale electricity prices and PJM capacity market costs - parts of an electric bill that are not controlled by electric companies or state regulators. States and electric companies already have implemented customer protections, while PJM reforms remain pending before the Federal Energy Regulatory Commission.

Across geographies, political environments, and regulatory models, investor-owned electric companies and state regulators have adapted quickly to a new era of electricity demand.

"The practices highlighted by CRA allow electric companies to serve data centers in ways that protect - and often benefit - existing residential and business customers," said Maloney.

Read the full Retail Rate Trends in the US: Fall 2026 Update here.