The U.S. House passed the Ratepayer Protection Act to mandate that AI data centers fund grid upgrades, directing states to adopt federal standards within two years.

The U.S. House of Representatives has passed H.R. 9340, the Ratepayer Protection Act, establishing a federal standard that requires data centers to cover the cost of grid upgrades built to accommodate their operations. The legislation amends the Public Utility Regulatory Policies Act of 1978 and directs each state regulatory authority and non-regulated electric utility to consider adopting the standard within two years of its passage, assuming it is signed into law.

Under the bill, data centers with a capacity of 100 megawatts or more would be responsible for “the full, incremental cost of any generation, transmission, or distribution upgrade necessary to serve the load of such large-load customer, including in the event of such large-load customer terminating a contract or other agreement with the electric utility pertaining to the sale of electric energy, or otherwise ceasing the purchase of electric energy from the electric utility.” This provision aligns closely with President Donald Trump’s “Ratepayer Protection Pledge,” which secured commitments from AI hyperscalers, utility providers, and state governors to cover their own electricity-related infrastructure costs.

The push for federal standards follows widespread rate hikes that have disproportionately affected residential customers and small businesses amid surging power demands from AI data centers. This dynamic has become a primary driver of public opposition to new data center projects across many communities. Several states have already moved ahead with similar measures. In 2025, Oregon enacted the POWER Act, one of the first state-level efforts to curb utility price spikes. The law imposes stricter requirements, mandating that any facility drawing more than 20 megawatts contribute its fair share. Early results show a 30 percent increase in electricity costs for data centers alongside a 1.3 percent reduction in residential power rates. Virginia followed shortly after, with its governor signing the Ratepayer Protection Pledge in July 2026. Subsequently, the Virginia State Corporation Commission mandated that data centers cover all necessary transmission infrastructure costs.

Although the House has approved H.R. 9340, the measure must still clear the Senate and reach the White House for presidential signature. Even if it becomes federal law, implementation remains contingent on individual state regulators choosing to adopt the standard. With states granted up to two years to make a final determination, there is a possibility that existing temporary data center bans and moratoriums could expire before state-level rules take effect.