Manhattan Institute: Data centers have reduced electricity prices; good policy can keep scaling compute

Published Oct 8, 03:28 PM UTC

This City Journal article, published by the Manhattan Institute for Policy Research, argues that data centers have historically reduced electricity prices for consumers through increased demand that incentivizes grid investment and efficiency. The author, Adam Lehodey, contends that this trend can continue if policymakers adopt good decisions, such as streamlining permitting for new power generation and transmission, and avoiding punitive regulations on data center energy use. The piece frames the expansion of compute infrastructure as an opportunity rather than a burden, provided that regulatory frameworks support innovation and grid modernization. It presents a free-market perspective on the intersection of technology, energy policy, and economic growth, emphasizing that the benefits of data center proliferation—including lower electricity costs—depend on continued policy reforms to enable supply-side responses to rising demand.