US House moves to curb rising power bills linked to AI data centers

The US House is fast-tracking a vote to block data center-driven power bill hikes before the 2026 midterms. Reportedly, lawmakers may vote on the bipartisan Ratepayer Protection Act as early as this week.

If this legislation passes, US states can require AI data centers that consume over 100 megawatts of energy to finance their own infrastructure development, including building new power grids and transmission lines, rather than imposing such costs on local communities.

The pressure on the energy grid at present is mostly driven by the growth of data centers powered by artificial intelligence and cryptocurrencies, as well as the electrification of building and transport systems.

According to newly released EIA forecasts, US electricity demand is set to increase in the coming months, rising from 4,195 billion kWh in 2025 to 4,270 billion kWh in 2026 and 4,349 billion kWh in 2027.

The bill also requires states to establish rules on data centers

Rep. Gabe Evans, a Colorado Republican, introduced the Ratepayer Protection Act to the House alongside Rep. Kathy Castor in June. He recently spoke out about the bill, claiming it ensures giant data centers take total financial responsibility for their own power infrastructure. He also noted that it mandates that states without existing data center regulations begin holding public hearings to develop their own localized rules.

“My bill protects consumers if one of these massive customers scales back operations or walks away after infrastructure has already been built to accommodate its demand. Families and small businesses should not be left paying for expansions they did not require,” he contended.

Referring to the Trump administration’s AI plan, he also pointed out that the bill will help America win the technological edge over China while protecting ordinary individuals from high electricity bills. He acknowledged that the country still needed adequate energy capacity to win the AI race.

His counterpart, Rep. Castor, when introducing the bill, had highlighted that her Florida constituents were struggling with rising electricity costs. Back then, she emphasized that ordinary individuals should not be responsible for the high electricity costs incurred by wealthy companies’ data centers, which is why she sponsored the bill.

At the moment, House Speaker Mike Johnson is anticipated to bring the act forward under suspension of the rules, a legislative process designed to allow certain bills to move through the House more quickly. With the midterms approaching, the legislation is expected to attract support from lawmakers concerned about the impact of rising electricity costs on their constituents.

Data center power demand is becoming a bigger issue for utilities

The debate comes as utilities across the United States prepare for a sharp increase in electricity demand from large-scale computing facilities. AI data centers require substantial amounts of power to run servers and cooling systems, with some planned facilities demanding hundreds of megawatts of electricity.

The challenge for utilities is that serving these customers can require significant investments in generation, transmission, and distribution infrastructure. If those costs are spread across a utility’s broader customer base, households and smaller businesses could potentially face higher electricity rates even though they are not directly responsible for the additional demand.

The Ratepayer Protection Act aims to solve that by putting the burden on large data center operators. Its proponents say the companies that generate the extra demand should also bear the infrastructure costs. The debate will be more important as technology companies pour money into expanding AI computing capacity across the country.

The legislation is also becoming a bigger part of the picture of how states and local governments are adopting data center development. Policymakers aren’t just looking for money for technology investment and jobs; they are also looking at electricity prices, water resources, infrastructure, and surrounding communities.

Hochul introduces community framework to guide data center development

Meanwhile, New York Governor Kathy Hochul is urging local town and city officials to seek at least $1 million per megawatt in community investments from tech firms looking to build data centers. For a 50-megawatt data center, that would translate into a recommended $50 million community investment.

The governor just rolled out a first-of-its-kind state framework to help local governments negotiate with major tech companies. It serves as a toolkit to help towns minimize the negative impacts of data centers and ensure local families come out ahead through sound community investments.

She noted that the proposed $1 million-per-megawatt funding ensures host communities get a fair share of the long-term economic value generated by the data centers.

“As artificial intelligence rapidly changes the world we know, I won’t allow New York’s communities and the families who live here to be taken advantage of, and that’s why I’ll continue stepping up, putting New Yorkers first,” she stated.

Empire State Development President ​Hope Knight also asserted, “The innovation economy’s growing demand for data centers must be matched by shared standards that ensure communities benefit.”

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