Lawmakers push to make data-center developers pay for grid interconnection and upgrade costs.

The House Committee on Energy and Commerce energy subcommittee opened debate this week on the Ratepayer Protection Act, legislation that would require data center developers to pay for power grid upgrades needed to support their projects. The bipartisan bill codifies the Ratepayer Protection Pledge, rolled out by the White House in March with backing from major tech companies including Google, Microsoft, Meta, Oracle, xAI, OpenAI, and Amazon. The initiative comes as two high-profile progressives push for an outright moratorium on new data center construction.

The bill is sponsored by Reps. Gabe Evans, a Colorado Republican, and Kathy Castor, a Democrat from Florida, and backed by Republican Rep. Bob Latta of Ohio, who chairs the energy subcommittee, and Energy and Commerce Committee Chairman Rep. Brett Guthrie, a Kentucky Republican. "Winning the race for global artificial intelligence dominance is crucial but should not come at the cost of taxpayers," Guthrie said in a statement. "Families and small businesses across the country shouldn't be left to foot the bill for this new development, though the benefits of these innovations will be felt by all of society."

Moody's Ratings analysts warn that the rapid infrastructure buildout to support AI integration raises new credit risks for state and local governments. "New data center development may fail to deliver material revenue benefits if tax policies are not well calibrated," the analysts said, noting that tax breaks and other incentive programs can erode near-term revenue gains, and "the long-term economic benefit from data centers has typically been modest." Local municipalities are creating a patchwork of rules, with local moratoriums in some areas likely to push projects into shovel-ready locations.

Despite growing opposition—which has ballooned since the start of the year—and wide variance in local regulations and reception, the cost of power, strong internet connectivity, and exposure to natural disasters remain key drivers of development decisions. The U.S. Department of Energy is looking to finance ten nuclear reactors across five sites, Energy Secretary Chris Wright said in May, which would relieve some energy production pressures from localities.

In response to community concerns over rising energy costs, New York Rep. Alexandria Ocasio-Cortez introduced the Artificial Intelligence Data Center Moratorium Act to the House this week as the partner bill to Sen. Bernie Sanders' version in the Senate. The legislation would immediately halt all new data center construction and introduce strong consumer protections for ratepayers. The moratorium would remain in effect until "strong national safeguards" are in place and Congress passes legislation rescinding the ban. Sanders referred his bill to the Senate Committee on Commerce, Science, and Transportation in March, but the committee has not yet brought the legislation up for debate.