DIGITAL INSIGHTS - Facts, Not Narratives: What the Data Really Say About Electricity Prices
A new study out of the Lawrence Livermore Laboratory in Berkeley, California, is raising new policy questions around energy and prices.
By Martin Davis
EDITOR-IN-CHIEF
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Digital Insights is a weekly feature usually appearing on Thursdays that explores the role of data centers in our region. These columns will focus on four areas: tracking the development of data centers in our area, exploring projected and actual tax revenue trends, explaining what data centers are and how they affect our daily lives, and reporting on research and emerging trends in the industry. These columns are made possible, in part, by a grant from Stack Infrastructure.
A new report from Lawrence Berkeley National Laboratory and The Brattle Group — Factors influencing recent trends in retail electricity prices in the United States — has raised a lot of eyebrows in recent weeks. (View the slide deck that summarizes the study.)
The conclusion that has drawn the most attention is this: “Load growth at the state level has tended to depress retail electricity prices in recent years…unclear to what degree this will hold in the future.”
So what has caused energy price increases if not load growth?
According to the study, it was the replacement and hardening of aging distribution and transmission infrastructure, as well as extreme weather and natural gas variability.
This analysis adds considerable nuance to the debate over what is causing the spike in electricity.
To better understand the study and how it affects the public discussion, Digital Insights turns its analysis over to Del. David Alan Reid, a Democrat from Loudon County representing House District 28 who wrote an insightful piece about the report and what it says about energy prices, as well as the public discussion we have around them.
“Electricity prices are rising primarily because our infrastructure is old and utilities are investing to modernize it,” Reid writes. “Blaming data centers might score quick political points, but it distracts from the real challenge of rebuilding and securing the grid.”
Dig into this fascinating study. Both for the details about what’s driving energy costs, as the way those factors are being discussed in the public forum.
There’s a great deal to unpack, and it leads to a fascinating range of policy discussions.
Facts, Not Narratives: What the Data Really Say About Electricity Prices
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