Amazon-Funded Study Finds Its Data Centers Lower Utility Costs for Other Ratepayers
December 17, 2025
A new report commissioned by Amazon Web Services (AWS) claims that the company's data centers not only cover their own utility costs but can also reduce electricity bills for other customers in their service areas. The findings come amid intense scrutiny of the data center industry's massive energy consumption and its impact on local power grids and consumer rates.
The study, conducted by energy consulting firm Energy + Environmental Economics (E3), analyzed the economic impact of specific Amazon data centers across four U.S. utility service territories: Pacific Gas & Electric in California, Umatilla Electric Cooperative in Oregon, Dominion Energy in Virginia, and Entergy in Mississippi. E3 compared the projected utility revenue generated by these facilities against the estimated cost to serve them.
According to the report, the Amazon data centers examined are projected to generate a surplus value of $33,000 per megawatt in 2025. For a typical 100-megawatt facility, this translates to approximately $3.4 million in value that utilities can use to lower rates for other residential and business customers. The report concluded that the data centers "are not burdening other ratepayers with their costs, rather they provide a benefit," and that existing rate policies are effectively preventing cost shifts on an individual facility basis.
Beyond direct economic impact, the report highlighted Amazon's role in grid modernization. It cited the Baldy Mesa solar and battery storage site, where Amazon-powered machine learning models optimize battery charge and discharge cycles to support the grid. In a separate blog post, Amazon stated its investments "support the modernization of energy infrastructure" and detailed its funding of over 600 global renewable energy projects. The company added that across the four states studied, it is adding roughly 4.2 gigawatts of firm carbon-free energy to power grids—enough electricity for more than a million U.S. homes.
However, the report acknowledges broader systemic challenges. It aligns with a 2024 independent analysis by Virginia's Joint Legislative Audit and Review Commission (JLARC), which warned that rapid, unconstrained data center growth could strain power generation and transmission infrastructure. JLARC projected that scaling this infrastructure could raise monthly system costs for all utility customers by $14 to $37 by 2040. E3's report cautions that "the cumulative effects of rapid load growth will test existing rate structures," and that in high-growth markets, "rate design and cost allocation methods will need to evolve more quickly to keep pace with changing system costs."
Source: datacenterdynamics
Amazon-Funded Study Finds Its Data Centers Lower Utility Costs for Other Ratepayers
