Cornell Study Finds Households Bore 62% of Grid Costs Tied to Data Center Growth in 2025 as Cities Extend Moratoriums

Since voters in 10 states weighed in on 41 local data center ballot measures on Nov. 3, the argument has shifted from whether to build to who pays. This week's answer, from Cornell University researchers, is that ordinary ratepayers are covering most of the tab.

What the Cornell study found

The study, published in the journal Nature Energy, tracked demand growth and infrastructure projects across four major U.S. power grids from 2020 to 2025.

It found that data centers pushed up wholesale electricity prices last year. It also found they paid only 38% of the infrastructure costs linked to their growth: $3.12 billion of an $8.25 billion bill in 2025.

The other 62%, or $5.13 billion, fell largely on residents, the researchers said. They estimate the lowest-income households face extra energy costs of up to 28% of their incomes.

Transmission investment jumped from $2 billion in 2020 to $34 billion in 2025, with data centers driving much of the increase, the study says.

Under regulated tariffs, residential customers are allocated a median 47% of costs even though they contribute far less to demand growth. Rural communities absorb increases 76% larger than urban ones, according to the study.

Why the bill lands on households

The problem is the allocation formula. Costs are often split based on past consumption, not forecast growth.

"It's kind of a chicken-and-egg problem," said Fengqi You, a Cornell Duffield College of Engineering professor and study co-author. "Because if you're going to build a data center, you need to expand this power infrastructure. Otherwise, there's no electricity for them to run. But before they build, they're not using energy."

"So with this model of relying on past consumption, households end up taking on much of the infrastructure costs," You said.

The costs also cross state lines. The study found residents of New Jersey, Pennsylvania and Ohio help pay for grid upgrades tied to data center growth in Virginia. "You do not have to live next to a data center to help pay for its power infrastructure," You said.

You and first author Cheng Feng, a Cornell postdoctoral researcher, recommend changing the cost-sharing rules to lower the burden on communities.

Cities keep their pauses in place

The local response is already moving. Ballotpedia counted at least 50 local data center ballot measures across 13 states in 2026. By Nov. 4, voters had decided 47 of them, and 46 came out in favor of tighter controls, either through new restrictions or by rejecting proposals meant to encourage development.

In Oklahoma, the Edmond City Council voted 5-0 on Nov. 9 to extend its data center moratorium through June 30, 2027. The pause blocks rezoning and building-permit applications for data centers while the city studies regulations and land-use issues.

Memphis has a pause that predates the election. Its council rejected an 18-month moratorium in a 6-6 tie, then passed a 135-day pause 7-5 on Oct. 20. A Nov. 9 "Data Center Legislation Discussion" meeting produced no votes on zoning changes. The city's draft law says large data centers can place unusually high demands on electricity and may require extensive backup generators, substations, battery storage, cooling equipment and water.

Marshalltown, Iowa, adopted a four-month moratorium on data center applications in August while it develops local rules.

The case for the buildout

Not everyone reads the backlash as a mandate. Steve Bandrowczak, the former Xerox CEO and a Galaxy Digital board member, told FOX Business that critics should visit the communities hosting these projects. He argued they bring jobs, tax revenue and a chance to upgrade aging infrastructure.

"I don't think it's political," Bandrowczak said. "I think you really need to get on the ground and understand what's happening." He pointed to Galaxy's Texas operations and its work with Texas Tech University.

The federal government is on the same side. President Trump signed an executive order in July 2025 prioritizing rapid data center construction through streamlined federal permitting and access to federal land.

China is building without the fight

The contrast with China is stark. In Ulanqab, in Inner Mongolia, CBS News found a construction site "the size of a small American city," with as many as 30,000 workers brought in from across China. The region offers cheap energy, a cold climate that cuts cooling costs, and affordable land and labor. Fossil fuels remain the main power source, supplemented by wind and solar.

Experts cited by the Financial Times say Chinese data centers are built at about one-fifth of U.S. cost, largely because of land and labor.

Baletu, a 72-year-old farmer, told CBS the project "doesn't affect my farmland, not at all." A local food-stall owner said development helps provide jobs for young people in an economy with high youth unemployment.

Chinese officials hope the hub will help the country surpass the U.S. in artificial intelligence. Opposition of the kind seen in American ballot measures did not surface in any of the interviews CBS conducted there.

What comes next

The Cornell researchers have recommended rewriting cost-sharing rules, but no state regulator or grid operator has announced such a change. Edmond's pause runs to June 30, 2027. Memphis's council has yet to vote on permanent zoning standards, and its 135-day pause will expire before it does so unless extended.