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The Center on Global Energy Policy (CGEP) at Columbia University SIPA today announced the release of new research focused on the causes of rising electricity prices in the...
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The Center on Global Energy Policy (CGEP) at Columbia University SIPA today announced the release of new research focused on the causes of rising electricity prices in the United States – including the role of AI and data centers – and providing recomendations that policymakers can implement to upgrade the grid and lower costs for ratepayers.
You can read the new research here.
The publications find that accelerating electricity price increases are the result of several converging factors, including aging infrastructure, weaknesses in grid planning and permitting processes, rising system investment needs, and growing electricity demand across the economy. While data centers and AI are contributing to increased demand growth, the research concludes that recent price increases cannot be attributed to any single factor and instead reflect broader structural challenges facing the US power system.
The research draws on a series of roundtable discussions hosted by CGEP over the last year and includes policy recommendations and summaries of the discussions, which were held with regulators, utility executives, academics, policymakers, and technology-sector representatives. Participants concluded, among other points, that large electrical loads have not been a principal driver of rising electricity prices, and that they have actually led to deflationary pricing in many locations.
“High electricity prices have become a front-of-mind energy issue around the world, with much of the public discourse on the cause of this focused on the energy demands of AI and data centers,” said Jason Bordoff, Founding Director of CGEP. “The Center on Global Energy Policy’s new research finds that the real answer is more complicated, and takes a larger-scale look at the driving factors behind the recent rise in power prices. This research comes at a critical time when policymakers need informed policy solutions to better understand the factors behind increasing electricity prices, and address this challenge head-on.”
Today, CGEP has released two new publications:
Electricity Affordability and Load Growth: Diagnosing and Fixing the Problem
By Robin Millican, Dr. Douglas J. Arent, and David Sandalow
This commentary examines the structural roots of rising electricity prices and identifies solutions across three time horizons: near-term optimization of existing infrastructure through grid-enhancing technologies and demand flexibility; medium-term structural reforms to utility incentives, cost allocation for large new loads, and interconnection and permitting processes; and long-term risk management addressing storm damage, wildfire costs, and cybersecurity. The authors find that the most adverse price outcomes are not inevitable but are the result of policy and regulatory choices that can be addressed at both the federal and state levels.
Drivers of Electricity Prices and Load Growth in the United States: Insights from a CGEP Roundtable Series
By Diego Rivera Rivota, Douglas Arent, David Sandalow, and Robin Millican
This roundtable summary provides key takeaways from a series of three roundtable discussions that CGEP hosted with participants including regulators, utility executives, academics, policymakers, and technology-sector representatives across different regions of the US. Broadly, participants argued that multiple factors are affecting electricity prices and that large electric loads have not been a principal driver of price increases, in some locations leading to lower prices. However, participants noted that price inflation is increasing nationally and that it will likely rise further due to increasing demand, including demand from large electric loads.
This transcript has been automatically generated.Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.You can also add the show’s RSS feed to your podcast app to follow us directly.Robinson Meyer:Hello, it is Wednesday, June 17, and one...
