Senate Bill Aims to Shift AI Data Center Costs Off Electric Bills
Bipartisan Senate bill seeks to make AI data centers pay for grid upgrades, not households.
2 min read
A bipartisan Senate bill is seeking to shift the cost of grid upgrades required by AI data centers from families and businesses to the tech companies themselves. The proposed legislation, part of the broader Bipartisan American Affordability and Jobs Act, would require data centers to cover all transmission costs linked to their operations, ensuring that these expenses do not burden ratepayers.
The bill, negotiated by key members of the Senate’s energy and environment committees, including Republican Sen. Shelley Moore Capito, Republican Sen. Mike Lee, Democratic Sen. Martin Heinrich, and Democratic Sen. Sheldon Whitehouse, would also impose financial guarantees on utilities before building infrastructure for data centers. Even if a data center stops buying power before recovering its costs, the facility would remain responsible for those expenses.
Under the bill, data centers of at least 20 megawatts would have to cover the added costs they put on the power system, including generation, storage, transmission, and distribution. Federal and state regulators could also charge large data centers more than those costs and use the extra money to lower other customers’ bills.
Senators argue that the bill would ensure data centers pay their fair share of the grid upgrades they require, not leave that burden on American families. Heinrich said the bill would “mean more energy on the grid, more good-paying jobs, and lower electricity costs for families and businesses.” Whitehouse added that data centers “must pay for any network upgrades needed to serve their big demand, so ratepayers don’t bear the cost burden of added infrastructure.”
States would have wide latitude to impose further restrictions, including treating data centers less favorably than other large industrial customers and requiring them to secure new power supplies or accept limits on their electricity use. More than half the states already have policies in place or pending that require data centers to pay more of what it costs to serve them.
Industry experts have mixed reactions to the proposal. Some see it as a necessary step to protect ratepayers, while others warn it could lead to discriminatory treatment of a single industry and push developers to build power supplies entirely off the grid.
The bill would also speed up approvals for the power plants and transmission lines data centers need, potentially unlocking investment needed to build new generation and transmission faster. However, a vote on the bill will not happen until after the midterm elections, and Sen. Mike Lee expressed confidence the Senate will pass it in a lame-duck session in November.
Source: Daily Caller
