US House to Vote on New Electricity Regulation for Data Centers on Wednesday: Centers Must Bear Incremental Power Costs, Aimed at Preventing Tech Giants From Passing on Electricity Expenses

According to Zhitong Finance APP, the U.S. House of Representatives is expected to vote as early as local time Wednesday on a bipartisan bill aimed at curbing electricity price hikes associated with the expansion of data centers supporting artificial intelligence. The vote comes as government officials across the United States are facing an increasingly pressing question: how to prevent the surging power demand costs of data centers from being passed on to ordinary households.

This legislation, titled the Ratepayer Protection Act (H.R. 9340), was jointly introduced in June this year by Florida Democratic Representative Kathy Castor and Colorado Republican Representative Gabe Evans, and has garnered 42 cosponsors in the House (35 Republicans and 7 Democrats). It requires state utility regulators to consider whether large power users, including data centers, should bear the incremental costs of new electricity infrastructure built to meet their electricity needs. On July 21 of this year, the bill passed the House Energy and Commerce Committee unanimously by a vote of 52-0, and was added to the full House schedule on September 10.

A Federal Bill That “Requires States to Consider”

From the text, this is not a direct pricing bill. It amends the 1978 Public Utility Regulatory Policies Act (PURPA)—to add a new federal pricing standard: non-residential users (mainly data centers) with peak power demand of 100 megawatts or more on a single site or park, must have rate designs that cover all incremental costs for generation, transmission, and distribution upgrades serving them; meanwhile, it also requires large users to provide financial guarantees before utilities make infrastructure investments, to avoid leaving legacy users with costs in projects that shrink or are abandoned.

According to Congressional records and coverage from the industry outlet Environment+Energy Leader, state regulators must initiate review within one year of the bill taking effect and complete it within two years. States that have already adopted or substantially reviewed similar cost-sharing rules may be exempt. The vote will use the “suspension of the rules” process—a fast-track for noncontroversial bills that requires a two-thirds majority to pass. Currently, both markets and Congressional aides widely expect the bill to pass the House smoothly.

The real hurdle is in the Senate. The companion bill S.5028, introduced by Ohio Republican Senator Jon Husted, has yet to be scheduled for any committee hearing, and the Senate only has about three weeks left before the recess ahead of the November 3 election. In other words, the bill will most likely enter campaign season as a “House position” rather than becoming law.

However, its symbolic significance is already considerable: it codifies part of the White House’s “Ratepayer Protection Pledge” released in March. This pledge was first signed by Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI, and reportedly now includes more than 200 organizations, covering 80% of U.S. electricity supply and impacting 263 million Americans.

House Democratic Leader Hakeem Jeffries endorsed the bill at a press conference this week, calling it an “appropriate step forward” but adding that “obviously more needs to be done.” Former Federal Energy Regulatory Commission (FERC) Commissioner Allison Clements gave a more reserved assessment: “This ratepayer protection bill is actually just a relatively modest step in the right direction. Its value lies in sending a signal—if passed in a bipartisan manner, it shows Congress continues to align its priorities with protecting customers amid all this new investment and demand growth.”

Environmental group Food & Water Watch, which advocates for a nationwide pause on new data center construction, criticized the legislation for narrowly focusing only on electricity costs, without addressing broader concerns about data centers’ impact on water resources, pollution, and communities.

Beyond Legislation: Real Rate Setting Occurs in State Commissions

It’s worth noting that even if this bill passes, its binding force is limited—it only requires states to “consider” this standard, without mandating adoption. Sara Chieffo, Senior Vice President for Government Affairs at the League of Conservation Voters, stated before the vote, “A weak instruction for states to voluntarily consider cost protection is all there is—state regulatory commissions can ultimately ignore this bill.”

The industry is also rebutting the “cost-shifting” narrative itself. The Data Center Coalition, representing data center operators, released a study stating there is no evidence data centers have driven up residential electricity bills under the current rate structures. EPRI research even found that durable new demand spreads fixed grid costs over more electricity sold, which could actually lower residential rates. In July, PG&E CEO Patti Poppe told investors: “If each new gigawatt load is priced appropriately, it could result in a 1% rate reduction for all customers.” After Portland General Electric’s Schedule 96 large load rates took effect in June, data center rates in the same quarter rose 29%, while residential rates fell 1.3%.

In other words, this is not a bill that decides the final cost structure for AI electricity use. The federal “duty to consider” only clarifies direction; real rate-setting happens in the more than 23 states that have already established large load rates and among 104 approved or proposed rate cases, and in hearing rooms in Virginia, Georgia, and Ohio. Clements’s comment—even if “relatively modest but in the right direction”—may well be how the market should read it: the bipartisan political signal is already worth the price of admission, while the final allocation of electricity bills will be for each state to decide, one by one.