Dallas Fed: Trump’s Clean Energy Cuts Will “Nearly Double” Data Center Rate Hikes 

Washington, D.C. – Recent polling conducted by Blue Rose on behalf of Climate Power found a striking difference in how Americans view data centers based on what energy sources they rely on: a margin of 53-28 support when powered by clean energy like wind or solar, vs strong opposition at a margin of 31-47 when powered by coal and natural gas.

This polling came as President Trump announced a toothless “pledge” for data centers to bring their own power sources. But in his White House event, Trump again pressured tech companies to use gas and coal — jamming companies to use the exact power sources that make data centers more likely to be rejected by local communities.

Now, a new analysis from the Federal Reserve Bank of Dallas confirms that Trump’s crusade to block wind and solar power will also result in much higher rate hikes and inflation related to data centers. The analysis finds that data center buildout will raise utility bills, and in turn add as much as a full point to Personal Consumption Expenditures (PCE) inflation by 2030. And, crucially, the analysis finds: “Slower-than-expected growth of renewable energy sources—wind and solar—could nearly double the inflationary effect.”

• Main takeaway: “Even a modest data center boom could substantially raise retail electricity prices and hence annual inflation. For example, under plausible assumptions about the data center build-out and utilization, annual PCE inflation in 2030 would increase by between 0.04 and 0.13 percentage points. Slower-than-expected growth of renewable energy sources—wind and solar—could nearly double the inflationary effect.”

• Possible impacts on wholesale electricity prices: “The choice of the scenario greatly matters for the implied monthly increases in average U.S. wholesale electricity prices (Chart 1). At one extreme, these increases may exceed 40 percent in selected months, while at the other extreme they may be bounded by 12 percent.”

• Possible impacts on overall inflation: “In our two mid-capacity scenarios, the impacts on inflation are similar. When utilization is concentrated in peak hours, data centers alone increase headline PCE inflation by 0.05 percentage points in 2026 and by 0.13 percentage points in 2030 through their effect on retail electricity prices. When utilization is spread throughout the day, the effects are slightly lower. In the low-capacity scenario by contrast, the inflationary impact shrinks to between 0.02 percentage points in 2026 and 0.04 percentage points in 2029. As a point of comparison, if all proposed data centers were to connect to the grid and operated at maximum capacity all the time, annual PCE inflation would rise 1.02 percentage points in 2030. This evidence indicates substantial uncertainty about the inflationary impact of the data center boom.”