Utilities across the country are working to accommodate large-load inquiries. At the same time, lawmakers in Washington, D.C., are struggling to balance the national security imperative of leading the global race for artificial intelligence against the growing public sentiment that data centers are driving up their energy bills.
For most of last year, federal policy focused on enabling data centers to connect to the grid faster. “Speed to power” was the dominant refrain, culminating with the secretary of energy’s October 2025 proposal that the Federal Energy Regulatory Commission assert jurisdiction over large-load interconnection to the transmission system. FERC is expected to issue a rule in June, but in the intervening months, policymakers have had a new challenge to contend with: consumer backlash.
Are data centers driving electric bill increases?
Utility bills are rising in most parts of the country, but data centers are not always the cause of the increases. Utility investments and the cost of goods and labor play a significant role, and many states and utilities are adopting large-load tariffs to protect consumers from cost shifting as new large loads come online.
Some regions, like the mid-Atlantic market where data centers are concentrated, have come under intense scrutiny for socializing the costs of load growth through structures like the capacity market. But in any case, the public perception of paying for Big Tech’s energy needs is contributing to protests that are derailing local siting processes.
The struggle for a national policy to protect consumers
President Donald Trump acknowledged the growing concerns in his State of the Union speech and followed up with a voluntary framework known as the ratepayer protection pledge. The pledge includes several meaningful commitments and was signed by Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI—notable absences include Anthropic and merchant data center developers. Participating companies agreed to build, bring, or buy new generation resources needed to satisfy their energy demands, pay the full cost of power delivery infrastructure upgrades, and negotiate separate rate structures with utilities rather than relying on processes that spread costs across residential customers.
Since then, legislative proposals have proliferated as energy costs have become a central theme in the upcoming midterm elections. A bill from Sen. Tom Cotton (R-Ark.) would incentivize fully islanding data centers by exempting them from Federal Power Act requirements. A bipartisan proposal from Sens. Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.) would go a step further, requiring all new data centers to bring their own generation and existing data centers to depart from the grid within the next 10 years. Another bill from Sen. Adam Schiff (D-Calif.) would direct FERC to require data centers to pay for all the network upgrades they cause.
On the House side, the Energy and Commerce Committee held a legislative hearing on a suite of bills aimed at addressing data centers and rising energy costs. The bills would address load forecasting, transmission capacity, and FERC’s role in negotiating large-load access to the grid. Democrats have coalesced around a broader package that includes directing federal regulators to cap utility profit margins and penalize providers who use ratepayer money to fund corporate excesses or pass unwarranted infrastructure cost hikes down to captive consumers.
Where do we go from here?
While it is unlikely Congress will pass an energy and AI bill this year, it is possible some of these provisions could be incorporated into a permitting reform bill—particularly if that effort expands to include transmission reforms, as many Senate Democrats would prefer. They could also hitch a ride on the highway bill, a five-year reauthorization that included an energy title when it was last updated in 2021.
However, with tensions high ahead of the midterm elections, any action will likely come in the lame duck session following the vote. The outcome could make action more or less likely, depending on whether the control of one or both chambers changes.
In the meantime, the speed of commercial change continues to far outpace Congress’ ability to address AI issues legislatively. Already, hyperscalers have moved to secure their own onsite generation resources, creating a different challenge for utilities that now have to compete with well-heeled tech companies for the labor and materials that were already driving up the cost of projects. And that means consumers’ concerns about the role of data centers could continue to shape the energy landscape, whether policymakers are able to meaningfully intercede or not.
