This article is a reproduction of my presentation to the Summer Senate on July 7, 2026 that attempted to tell the real story using economic graphs and statistical charts.
Introduction
A May 13th 2026 Gallop poll showed 71% of Americans oppose AI data centers (AIDCs) in their local area. Those who oppose mainly do so for environmental reasons (78%) followed next by energy (73%). My testimony today is that AIDCs are not the problem but instead renewables and utilities regulation.
Competition vs Monopoly
MN electricity is dominated by three franchise monopolies. Monopolies tend to charge far more for far less.
Source: Fundamentals of Energy Regulation
Natural Monopoly
Franchise monopolies are claimed to be natural ones that have lower and declining costs than competition.
Source: Fundamentals of Energy Regulation
Monopoly Regulation
Rate case regulation by MN Public Utilities Commission (PUC) can mitigate a high monopoly price.
Source: Fundamentals of Energy Regulation
Regulated Prices
US regulated utility prices have ‘sky rocketed’ compared to competitive telephony, internet and wireless.
Source: Institute of Public Utilities
Renewables Regulation
Renewable generation requirements put further upward pressure on electricity utility costs and prices.
Source: Fundamentals of Energy Regulation
Renewables Mix
MN’s renewables electricity generation mix has grown 750% from 2002 to 2024: from 4% to 34%.
Source: Minnesota Department of Commerce
Renewables Cost
Twin Cities electricity prices inflated 131% from 2002 to 2024, compared to overall inflation growth of 67%.
Source: Center of the American Experiment
Renewables Compared
In contrast, between 2002-2024, Midwest electricity prices grew 92% and US as a whole by 105%.
Source: Center of the American Experiment
Renewables Misery
Our new Misery Index clearly shows renewables inflation of 151% from 2002 to 2024: i.e. -41 points to +21.
Source: Center of the American Experiment
Data Centers
Bloomberg forecasts US DCs and EVs to grow between 2025 & 2050 by 900% and 4,500% respectively.
Source: Minnesota Department of Commerce
Data Costs
Landmark June 2026 study found DCs modestly reduced US electricity prices between 2015 and 2024.
Source: Electric Power Research Institute
Data Demand
At much greater demand levels, natural monopolies are no longer natural and can face competition.
Source: Modern Economic Regulation
Competition vs Regulation
Regulation and subsidies hamper supply and inflate prices: market competition does the opposite.
Source: Institute of Public Affairs
Competition Reforms
Australia proved from 1995 to 2005, public utilities can be successfully reformed towards competition.
Source: Australian Productivity Commission
Reform Results
Australian electricity prices fell 19% overall from National Competition Policy (NCP) & related reforms.
Source: Australian Productivity Commission
Renewable Results
Post NCP, Australian electricity prices inflated 180% from 2007 to 2022 due to renewable mandates.
Source: Australian Productivity Commission
Renewables Warning
German electricity generation fell 20% from 2017 to 2023: to a mix of 44% renewables, 45% fossil fuels and 1% nuclear power.
Source: Center of the American Experiment
Conclusion
Economic theory and statistical evidence show that rising electricity prices are not driven by AIDCs. The causes are: government renewables policy, monopoly public utilities and PUC style regulation. The key solutions: 1.) renewables pause; 2.) more nukes; 3.) Aussie-inspired incentive regulation and NCP.
Source: Data Center Map
