An analysis by the Lawrence Berkeley National Laboratory has found that state-level load growth in recent years (through 2024) has tended to reduce average retail electricity prices.
After decades of stagnant demand, U.S. electricity load is poised to rise, driven by the expansion of data centers, domestic manufacturing, and broader electrification (NERC, 2024), LBNL said. “This has raised concerns that increasing load might place upward pressure on wholesale and retail electricity prices.”
But the report shows that for 2019–2024, states with the highest load growth experienced reductions in real prices, whereas states with contracting loads generally saw prices rise.
“Regression results confirm this relationship: the load-growth coefficient is among the most stable and statistically significant across model variants,” LBNL said.
“This finding aligns with the understanding that a primary driver of increased electricity-sector costs in recent years has been distribution and transmission expenditures—often devoted to refurbishment or replacement of existing infrastructure rather than to serve new loads.”
Spreading these fixed costs over more demand “naturally exerts downward pressure on retail prices. It is also notable, however, that this negative load-price relationship was pronounced when considering overall average retail prices but was smaller and lost statistical significance when analyzing residential prices alone,” the report said.
Load growth over this historical period was led by commercial customers, and cost allocation practices have tended to benefit those large, non-residential customers, LBNL said.
“Whether these historical relationships extend to a future of significant, nationwide load growth is unclear and is a point to which we return in the conclusion,” the report said.
