House Passes Bill to Make AI Data Centers Pay for Power Grid Upgrades

The House voted 417-3 Wednesday to advance legislation that could make the nation’s largest AI data centers pay the full cost of power grid upgrades needed to serve them, a bipartisan effort to protect households and small businesses from higher electricity bills.

The Ratepayer Protection Act would require state utility regulators to consider a new standard for data centers with peak electricity demand of at least 100 megawatts at a single site or campus. The measure passed in one of the House’s final votes before lawmakers leave Washington ahead of the midterm elections, capping a week dominated by debate over artificial intelligence.

Under the proposed standard, utilities would recover from covered data centers the full additional cost of generation, transmission and distribution upgrades needed to meet their power demand. The obligation would also cover infrastructure costs if a data center later terminates its electricity contract or stops buying power from the utility.

The legislation adds another layer of protection before construction begins. Utilities would require large data center customers to provide financial assurances or contributions toward the infrastructure being built for them.

Those provisions address a growing concern surrounding the AI data center boom. Utilities may need to build substations, transmission lines and new generating capacity years before a facility reaches full operation. A project that later shrinks, relocates or closes can leave regulators deciding how to recover the remaining investment.

The House measure would place that financial responsibility on the large customer if states adopt the federal standard.

State regulators would retain control over their own electricity rates. The bill gives them one year after enactment to begin considering the standard or schedule a hearing and two years to reach a decision. States that already adopted or formally considered comparable protections could satisfy the requirement through their earlier action.

The structure uses an existing federal utility law to push the issue before state regulators while preserving state authority over rate setting. That approach helped the legislation draw support across party lines.

Reps. Gabe Evans, R-Colo., and Kathy Castor, D-Fla., introduced the measure in June. The House Energy and Commerce Committee approved it 52-0 in July before the bill advanced to Wednesday’s 417-3 floor vote.

The legislation arrives as the rapid expansion of artificial intelligence changes electricity demand across the country. Data centers running AI models, cloud services and other computing systems can require enormous amounts of power, forcing utilities in some regions to plan new generation and grid infrastructure.

The scale has also pushed electricity prices into the political debate over AI development. A University of Massachusetts Amherst poll released this week found 11% of Americans supported construction of an AI data center in their community.

President Donald Trump has promoted rapid development of data centers and AI infrastructure as part of his effort to strengthen U.S. competition with China. Lawmakers from both parties have increasingly focused on how that expansion affects electricity customers and communities hosting the facilities.

Wednesday’s vote represents one of Congress’s first major attempts to address the economic effects of the data center boom. The bill concentrates on infrastructure costs rather than broader disputes over water use, land development or environmental effects.

Consumer group Public Citizen has argued the measure gives states too much discretion because regulators must consider the standard and can ultimately choose a different approach. Supporters say that flexibility allows states to respond to their own utility markets while establishing a national expectation that major new power users should cover the infrastructure they require.

A companion Ratepayer Protection Act has been introduced in the Senate by Sen. Jon Husted, R-Ohio. The legislation now moves to the Senate, where approval would send it to Trump for his signature.