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- Patrick Sullivan says Mississippi looks well positioned to maintain or increase its competitive advantage as a low-cost energy state, largely due to growth from data centers.
AI and the data economy have intensified the role of energy in economic growth, perhaps unlike anything since the Industrial Revolution. The scale of electricity demand growth is requiring a massive and rapid expansion of electric infrastructure throughout the U.S. Mississippi is already seeing unprecedented levels of activity in new power plants and system upgrades made possible by the influx of data storage projects.
Because we’re all on the same vast, regional electric system, some are understandably concerned about the impact giant electricity users like data centers will have on electricity bills. Critics perpetuate a myth that data centers always bring higher electricity costs, however, recent research shows adding new, large customers to an electric system may be the best way to put downward pressure on retail electricity prices.
In 2025, researchers at Lawrence Berkeley National Lab sought to identify the primary drivers affecting electricity prices in states. Their research supports what you may have already seen at your home or business – electricity prices are noticeably up over the last few years, but it’s not because of data centers. High inflation from 2022-2025 caused it. As the cost of nearly everything rose dramatically, so did electricity.
The researchers found “after adjusting for inflation, prices have been trending downwards for decades and largely remained flat over the last five years outside a bump upwards in 2022 corresponding to the onset of the Ukraine-Russia war.”
Another key finding by the Berkeley team was certain state-level policies caused electricity price increases. Namely, widespread behind the meter solar (i.e. subsidized) and renewable portfolio standards resulted in higher bills in states where those policies were enacted. Thankfully, Mississippi is not among those states. This finding is also supported in a recent project by the Institute for Energy Research (IER).
In a report titled Blue States, High Rates, IER found politics has played a major role in electricity price differences among states. “Electricity affordability is a function of state-level policy choices. States that have embraced aggressive renewable mandates, 100% “carbon-free” targets, premature coal and nuclear retirements, rooftop-solar cost shifting, and restrictions on natural gas infrastructure routinely deliver the nation’s highest electricity prices…In contrast, states that have prioritized dispatchable, affordable generation consistently deliver the lowest electricity prices.”
In the IER’s list, Mississippi is among the “reliably red” states with below average electricity rates, coming in at 16% lower than the national average.
If inflation and public policy are the main drivers of recent electricity price increases, how might data centers impact local electricity prices?
The Berkeley research team’s findings support what state leaders and electric utility executives claim about Mississippi’s data center and electric system growth – that adding large load customers like Amazon Web Services (AWS) to a system puts downward pressure on electricity prices (local taxes too), especially when the large customers are covering the cost of the new capacity needed and the system infrastructure upgrades.
They stated “our analysis finds that state-level load growth in recent years (through 2024) has tended to reduce average retail electricity prices…states with the highest load growth experienced reductions in real prices, whereas states with contracting loads generally saw prices rise.”
Since the advent of the AWS project, electric system announcements have been consistent with the benefits purported by the Berkeley team. Entergy Mississippi recently announced their customers are expected to save $2 billion over time by adding large data centers on their system. Late last year, Entergy also announced a $300 million increase in local grid strengthening and reliability projects entirely due to new revenues from data centers.
History says, over time, electricity prices will inevitably rise everywhere with inflation and other factors, like natural gas price increases. Good public energy policy and industrial growth are two critical factors in determining which states will have low-cost electricity. Mississippi looks well positioned to maintain or increase its competitive advantage as a low-cost energy state, largely due to growth from data centers.
Over the next 10 years, U.S. power demand is projected to increase an astronomical 40%. For perspective, electricity consumption in the U.S. only increased about 11% from 2000 to 2020, before the data and AI boom accelerated. Where will all this new demand be supplied, and who will benefit from the growth?
In economic development today, electricity is like gold. The opportunity ahead is for Mississippi to be intentional and smart about leveraging its energy strengths, finish what has started and plan for the next opportunities that could benefit us all.
