Federal Legislation on Data Center and Energy Usage
July 14, 2026
Data center development has become the marquee issue in many communities across the country, and the political nature is beginning to creep into federal legislative efforts. Among the efforts, The House Energy and Commerce Subcommittee on Energy advanced legislation on June 24 that would build in cost recovery for large energy users.
Why it matters: The rapid innovation in artificial intelligence and the exploding demand for data centers are creating political incentives for policymakers to push back or take action on voter’s concerns, including demands for water and power. While the issue is largely at the local level, Congress has begun to focus on key issues related to energy consumption.
The Ratepayer Protection Act (H.R. 9340), would allow the Public Utility Regulatory Policies Act of 1978 (PURPA) to establish a federal standard directing state utility regulators to adopt cost-allocation rules for "large-load customers" (100 MW+ demand) — aimed squarely at AI data centers.
- The bill would have state regulators establish recommendations for integrating new large-load customers with 100 MW or more of demand onto the grid.
- Key mechanisms: Recovery of the full incremental cost of grid upgrades from the large-load customer over a long period via a special rate charge or similar agreement, protecting ratepayers if that customer later scales down or exits; and financial assurance requirements obligating the large-load customer to fund generation, transmission, or other infrastructure needed to serve its load.
What they’re saying: Committee members expressed bipartisan support for the bill and many echoed concerns expressed by their constituents. Rep. Paul Tonko (D-NY) said the bill is a good first step, but had concerns the threshold was too high and 50 MW would be more appropriate.
Yes, but: Rep. Frank Pallone (D-NJ), the lead Democrat on the full committee, expressed his support for a nationwide moratorium on data centers: