A bipartisan bill moving through Congress aims to prevent households and small businesses from paying for the enormous electricity infrastructure required by new artificial-intelligence data centres.
The Ratepayer Protection Act would encourage state utility regulators to make qualifying data centres cover the full cost of power plants, transmission lines, substations and distribution upgrades built specifically to serve them. It would also require financial guarantees before utilities begin spending billions of dollars on those projects.
The measure, introduced in the House as H.R. 9340, advanced from the House Energy and Commerce Committee on July 21, 2026, by a unanimous 52–0 vote. A companion measure has also been introduced in the Senate. The bill has not yet passed the full House or Senate and is not currently law. The latest status is outlined in the committee’s official Ratepayer Protection Act announcement.
Despite its name, the bill would not simply order electricity companies to reduce monthly bills. Its broader purpose is to change who carries the financial risk created by the rapid construction of power-hungry data centres.
Data Centres Are Creating Unprecedented Electricity Demand
Cloud computing facilities have always consumed significant amounts of power, but the AI boom is increasing demand at a much faster rate. Training and operating advanced AI models requires thousands of specialised processors running continuously, supported by cooling systems, storage equipment and network infrastructure.
A Department of Energy-backed study estimated that US data centres consumed approximately 176 terawatt-hours of electricity in 2023, equal to about 4.4% of total national electricity use. Consumption was projected to reach between 325 and 580 terawatt-hours by 2028, potentially accounting for 6.7% to 12% of the country’s electricity. A newer Berkeley Lab update estimates that the share could reach approximately 11.8% by 2030, with considerable uncertainty depending on AI growth and hardware efficiency.
Some planned campuses are requesting several gigawatts of capacity. The Department of Energy notes in its guidance on microgrids and large electrical loads that individual sites have sought as much as 4.5 gigawatts—roughly comparable to the average demand of an entire state such as Connecticut.
Supplying a customer of that size can require new generation, high-voltage lines, substations, transformers and local distribution equipment. The dispute is over who should pay for those assets.
Utilities Can Spread Upgrade Costs Across Every Customer
Regulated utilities normally recover approved expenses through electricity rates. When a utility builds infrastructure, the cost may be distributed across residential, commercial and industrial customers over many years.
That model can be reasonable when the investment benefits the broader public. It becomes controversial when expensive infrastructure is constructed mainly for one privately owned data centre.
A technology company may promise to use hundreds of megawatts for several decades, encouraging a utility to begin major construction. If the project is delayed, cancelled or operates below its forecast demand, the utility may still need to recover the cost of the equipment already built.
Without a sufficiently strong contract or special rate, ordinary customers can be left paying for an underused power plant, transmission line or substation. Federal Energy Regulatory Commission officials have described this as a stranded-cost risk: infrastructure is built for a large customer that never arrives, leaving other customers responsible for the investment.
The Bill Would Make Large Data Centres Pay the Incremental Cost
The committee-approved version applies to new data-centre customers with a combined peak electricity demand of at least 100 megawatts at a single site or campus.
Its proposed standard would require the rate or service agreement between the data centre and utility to recover the full incremental cost of generation, transmission and distribution upgrades needed to serve that customer.
“Incremental” is an important word. A data centre would not necessarily pay for every existing wire or power plant in the region. It would be responsible for the additional infrastructure made necessary by its new demand.
The requirement would continue to apply if the data-centre operator terminated its electricity contract or stopped buying power from the utility. The proposed text also says utilities should obtain financial assurances or direct contributions before beginning the upgrades. Those provisions appear in the committee substitute amendment to H.R. 9340.
Financial assurances could take forms such as upfront payments, deposits, letters of credit or long-term minimum-payment commitments, depending on the rules eventually adopted by each regulator.
It Could Prevent Abandoned Projects From Becoming Public Liabilities
The bill’s most important effect may be protecting communities when a proposed data centre does not perform as expected.
Developers sometimes submit power requests before every commercial, financial or technical detail has been finalised. Several competing locations may be considered simultaneously, and projected demand can change as chip efficiency, AI markets or corporate strategies evolve.
A utility cannot simply move a specialised substation or transmission upgrade to another location after the intended customer withdraws. The remaining asset may still be included in the utility’s regulated cost base.
Requiring financial security before construction would encourage developers to submit more realistic projects and accept responsibility for the risks attached to their plans. It could also give utilities greater confidence that approved infrastructure will be paid for even when a customer later reduces its operations.
That is broader than lowering one month’s bill. It changes the way long-term financial risk is allocated across the electricity system.
Better Cost Recovery Could Also Support Grid Reliability
The Ratepayer Protection Act could make essential grid construction easier to finance.
Utilities are being asked to connect extremely large customers quickly, but they must also ensure that existing homes, hospitals and businesses continue receiving reliable electricity. If regulators are uncertain about how an upgrade will be paid for, approval and construction may become slower or more contentious.
A dedicated rate and financial guarantee can provide a clearer source of funding for new substations, transmission equipment and generation. Those investments may strengthen parts of the grid, particularly when infrastructure is designed to provide capacity beyond the data centre’s immediate requirements.
The White House’s voluntary Ratepayer Protection Pledge, which helped inspire the legislation, goes further by asking participating technology companies to bring or buy new power, pay for delivery upgrades and make backup resources available during emergencies where possible.
The congressional bill does not reproduce every element of that pledge, but its cost-recovery provisions could provide a foundation for stronger utility agreements.
The Measure Would Not Automatically Lower Electricity Rates
The bill is better understood as protection against future cost shifting than as a guaranteed rate reduction.
Electricity bills are influenced by fuel prices, weather, generation costs, storm repairs, transmission investments, taxes and many other factors. Data centres are only one source of rising demand.
Even if every qualifying facility paid its full infrastructure cost, residential bills could still increase for unrelated reasons. Existing data-centre expenses already approved by regulators might also remain in utility rates.
The bill would therefore make it harder for new qualifying data centres to cause increases by transferring their infrastructure costs to the public. It would not require utilities to refund earlier charges or reduce rates by a fixed percentage.
Its scope is also limited to new facilities meeting the 100-megawatt threshold. Smaller data centres and many existing campuses would not fall under the proposed federal standard.
States Would Still Make the Final Decision
The legislation would amend the Public Utility Regulatory Policies Act rather than create one mandatory national electricity tariff.
State regulators and nonregulated utilities would be required to begin considering the proposed standard or schedule a hearing within one year of enactment. They would then have two years to complete the process and issue a decision.
However, they would not necessarily be forced to adopt the standard exactly as written. Public Utility Regulatory Policies Act provisions generally require states to consider federal standards while preserving substantial state authority over retail electricity regulation.
This means protections could differ significantly between states. One regulator might require extensive upfront payments and long-term minimum charges, while another might conclude that existing tariffs already provide adequate protection.
States that have implemented, formally considered or legislatively voted on a comparable standard may also qualify for an exemption from the new review process.
The Bill Does Not Address Water, Pollution or Noise
Data centres affect communities through more than electricity rates.
Large facilities may consume water for cooling, require backup generators, occupy extensive land and create constant mechanical noise. New power demand can also encourage additional natural-gas or coal generation when cleaner resources cannot be built quickly enough. An Energy Information Administration analysis found that faster-than-expected data-centre growth could increase fossil-fuel generation and wholesale electricity prices in heavily affected regions.
The Ratepayer Protection Act does not establish water-consumption limits, emissions standards, zoning requirements or noise restrictions. It also does not require renewable energy or prohibit data centres from using existing fossil-fuel generation.
Lawmakers supporting stronger controls have argued that cost allocation is only the beginning. Separate proposals would require data centres to bring their own power, reduce demand during grid emergencies, use battery storage and provide more detailed energy-use information.
A Significant First Step, but Not a Complete Solution
The Ratepayer Protection Act addresses one of the clearest inequities surrounding AI infrastructure: private companies can create extraordinary electricity demand while households face the risk of paying for the required upgrades.
Making data centres cover the full incremental cost could protect monthly bills, prevent abandoned projects from creating stranded costs and improve financial certainty for grid construction. It could also encourage more realistic planning by requiring developers to prove their financial commitment before utilities begin building.
However, the measure would not guarantee lower rates, impose one binding national tariff or solve the environmental and local-development concerns surrounding data centres.
Its significance lies in establishing a basic principle: when a private facility requires infrastructure comparable to that needed by a city, the company creating that demand should carry the cost and risk rather than transferring them to the surrounding community.
