Under rate-of-return regulation, utilities earn guaranteed profits on every dollar of capital expenditure. When states conceal subsidy terms, the absence of public scrutiny removes any check on this bias, and utilities over-invest. When states mandate public disclosure, accountability mechanisms activate: ratepayer advocates challenge wasteful spending, media investigate favorable terms, and regulators face political costs. Analyzing 697 data center subsidies across 50 states from 2010 to 2023, I find a clear pattern across three disclosure regimes. In non-disclosure states, where subsidy terms are confidential, subsidies are associated with substantially higher utility spending. In full-disclosure states, where subsidy values and commitments are publicly reported, the association is negative. Data centers choose sites with existing infrastructure because they anticipate public scrutiny. In partial-disclosure states, where subsidy existence is public but dollar amounts are hidden, the effect falls in between. Transparency disciplines utility behavior even when incomplete, but full disclosure has the strongest impact. The Opacity Premium, the gap between non-disclosure and full-disclosure states, represents hundreds of millions of dollars shifted onto residential ratepayers each year. This is not a neutral process. It is a political choice about who funds the AI revolution.
Violet Reed (Mon,) studied this question.