Doug Arent and Robin Millican on What's Really Driving Electricity Prices

**Doug Arent** (0:04)
I think that there is a real need for transparency and clarity in terms of what should be connected to the grid, what's committed to get connected to the grid, both on the load side as well as on the generation side.

**Robin Millican** (0:19)
There's a lot of latent capacity industry estimates or something on the order of 260 megawatts of incremental load that could be met just by using solutions like grid enhancing technology. So just trying to get more out of what we have today.

**Bill Loveless** (0:35)
Concerns about the affordability of electricity in the United States have been rising along with prices. While the headlines have pointed to AI and data centers as the underlying factors, the exact causes are more complex. The problem reflects a convergence of pre-existing structural failures, including inefficient infrastructure planning, utility incentives that are misaligned with cost efficiency, slow permitting times and storm damage and wildfire costs. And now higher electricity demand, including from data centers, is accelerating all of these pressures and adding some of their own. New research released last week by the Center on Global Energy Policy examines the structural roots of rising electricity prices. The findings draw on recent research and discussions on electricity affordability. They also identify near, medium and long term solutions at the state and federal levels.
This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I'm Bill Loveless.
Today on the show, Doug Arendt and Robin Millican. Doug is a global fellow here at the Center and the Emeritus Executive Director at the Foundation for the National Laboratory of the Rockies, a non-profit established to support the Department of Energy Lab. He also holds Emeritus status at the Lab, where he served for nearly 30 years, rising to the role of Deputy Associate Director. Robin directs research programs and strategic partnerships here at the Center, leading its research agenda. Previously, she was the Head of Strategic Initiatives and Integration at Breakthrough Energy, the global organization founded by Bill Gates to accelerate the transition to affordable, reliable and clean energy. We discussed what their research shows about what's really behind electricity rate increases in many US states. We got into the mechanics of electricity prices and parsed the term large load to put data centers into context amid other pressures on the grid. And we looked at approaches to improving grid investments and resilience, things that could make electricity more affordable and reliable in the long term. Here's our conversation.
Doug Arendt, Robin Millican, welcome to Columbia Energy Exchange.

**Doug Arent** (3:08)
Thanks Bill.

**Robin Millican** (3:08)
Thanks so much Bill.

**Bill Loveless** (3:10)
Yeah, I'm glad to have you here on this topic that's getting so much attention these days as we know. Hardly a day goes by, it seems when we don't see one of these stories as a headline someplace. But high electricity prices have become a prominent energy concern in the US, with much of the public discussion focused on the energy demands of AI and data centers. But your research finds that the real answer is more complicated, broadly speaking, and we'll break this down.
What does that mean, Doug?

**Doug Arent** (3:43)
Yeah, thanks, Bill. When one looks at the history of the electricity sector and pricing in the United States over 20 years, electricity growth has been relatively flat and prices have basically tracked with inflation. In particular, the last five years, they tracked with inflation. In most states, not every state.
But we're now entering a new era, an era of low growth, AI data centers being some part of that low growth. There is low growth from other areas as well. But the fact is that at this stage, multiple factors are increasing prices for electricity.
It's not low growth alone and it's not low growth in every area as well. So we can talk about the details of that as we would go forward. But in 43 states, consumers saw electricity prices increase just last year, so from 2024 to 2025 I think that's combined with gas price increases is really raising awareness of energy prices broadly and electricity prices specifically.

**Bill Loveless** (4:57)
So Robin, we're not really facing or are we facing a national affordability crisis or a collection of regional challenges?

**Robin Millican** (5:05)
I think it's decidedly regional if you look at the data. So in the research that we did, we drew very heavily from analysis that was done by Lawrence Berkeley, National Lab and Brattle Group.
What they found is if you look at the period from 2019 to 2025, you had 23 states that saw price declines in real terms, meaning adjusting for inflation, while 27 states saw increases.