Congress voted Wednesday to protect residents from facing higher electricity costs due to data center development. But numerous hurdles remain before the legislation can become a new set of state-level rules.
The U.S. House of Representatives passed the Ratepayer Protection Act by a vote of 417-3. The bill enjoyed bipartisan support, with all but 8 Democrats joining 210 House Republicans in voting yes. Eight Republicans did not vote. The Ratepayer Protection Act previously received a unanimous vote out of the House Energy and Commerce Committee to reach the full chamber.
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The bill builds on the White House’s Ratepayer Protection Pledge, which is a voluntary promise from Big Tech and utility companies to ensure data center developers cover the costs of their electricity and grid upgrades needed to connect the enormous facilities.
Rep. Gabe Evans, R-Colo., who authored the bill, told Straight Arrow that the legislation’s primary goals are first that “data centers cannot pass costs onto anyone else in the service area.”
Data center companies must also prove they are “financially secure enough” to make lawmakers “confident that they aren’t going to go out of business halfway through and leave a bunch of partially built infrastructure for other people to pay for,” Evans said.
Americans’ electricity prices increased at twice the rate of inflation in 2025, a Columbia University white paper found. The rapid growth of large-scale data centers is one factor behind price increases. The clearest example comes from America’s largest grid, PJM, where an independent market monitor found that more than $29 billion in capacity costs can be attributed to data center growth.
While it would not address rising costs on regional electricity markets, the Ratepayer Protection Act would direct states to consider reforms. But first, the bill must make it through the U.S. Senate and President Donald Trump’s desk, and even then, the legislation is generally viewed as only a first step.
Tyson Slocum, director of the energy program at the nonprofit consumer advocacy organization Public Citizen told Straight Arrow the bill is “a far cry from any sort of comprehensive solution.”
What does the bill do?
The Ratepayer Protection Act goes one step further than the White House’s pledge. The act requires state regulators to consider a new electricity rate design for facilities that can consume upwards of 100 megawatts of power — enough for about 70,000 homes. The new rates must allocate all of the electricity and related infrastructure costs from serving large data centers to those large-scale customers, rather than household consumers. And the bill recommends financial guarantees so residents do not have to bear the cost if data centers are abandoned or scaled back after new energy infrastructure is built to serve them.
If it becomes law, the Ratepayer Protection Act would require state utility commissions to hold a hearing to consider the new federal standards within one year, and implement any changes within two years.
However “consider” is a key word in the bill text. The bill does not require states to implement such changes; nor does it dictate any specifics. The bill’s limited scope is partly due to existing law. The 1982 U.S. Supreme Court decision in Federal Energy Regulatory Commission v. Mississippi ruled that the federal government cannot hand down exact utility rate structures to states.
Evans said the Ratepayer Protection Act works like this to ensure local communities have a seat at the table.
“We know that different communities have different needs, and we know that federal, one-size-fits-all policies typically don’t actually work that well,” Evans told Straight Arrow.
Around half of states already require some utility companies to set separate rate structures for data centers. Known as large load tariffs, these agreements typically require upfront collateral before a utility invests in infrastructure and minimum monthly payments regardless of how much electricity the data center ends up consuming.
The Edison Electric Institute, a trade group representing America’s investor-owned utilities, expressed support for the Ratepayer Protection Act, noting in a statement that it “reinforces work already underway across the country.”
What are the implications if it becomes law?
Some supporters of the bill framed it as necessary to safeguard consumers while ensuring more data centers are built in the United States.
“If we cede the race to AI dominance to China, then China will set the standards for future technology,” said Rep. Brett Guthrie, R-Ky.
But several Democrats voiced a sense of urgency that more needs to be done.
“This bill is a start in addressing the impact that data centers have on our power bills,” Rep. Frank Pallone, D-N.J., said, but he called the bill “one small step” that “does not go far enough to ensure that Big Tech and other data center owners fully pay for the energy use and demand that they create.”
In a recent Straight Arrow investigation, state level consumer advocacy groups pointed to data centers’ role in rising costs at regional electricity markets and systemwide transmission upgrades — both of which are subject to federal, not state, regulation.
Evans acknowledged that the Ratepayer Protection Act is intended to be narrowly tailored, but said he has written additional legislation that he hopes will solve issues like transmission and power supply.
While he supports it as a first step, Slocum called the act “extremely limited,” and said it “does not guarantee that ratepayers will be protected.”
The main benefit Slocum sees is the requirement for states to at least open a proceeding to consider new consumer protections, which would “give some ammunition to state advocates in states where there are currently zero standards.”
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