Legislation would require corporations—not the American people—to pay for data centers’ expansion; take measures to protect grid reliability
WASHINGTON – U.S. Senator Peter Welch (D-Vt.), Ranking Member of the Senate Agriculture Committee on Rural Development, Energy, and Credit, recently joined U.S. Senator Chris Van Hollen (D-Md.) in introducing the Power for the People Act, legislation to rein in the rising electricity costs Americans are facing by addressing the huge amounts of energy required by data centers.
Amid the growing use of artificial intelligence (AI), corporations and big technology companies’ build out of data centers has exploded in the past decade and is projected to continue to rapidly increase. As more and more data centers aim to connect to the power grid, consumers are footing the bill for the infrastructure required to bring them online. Because data centers use so much power, they are also increasing energy demand which is further driving up electricity prices and placing a heavy burden on our electric grid—raising the risk of reliability issues such as blackouts.
“The data centers behind the AI boom are consuming more energy than ever before—that demand is only expected to grow. At the same time, energy prices are spiking across the country, saddling working families with higher utility bills and threatening the reliability of the grid. Data centers must be held accountable for the costs of their connection,” said Senator Welch. “We cannot force everyday Americans to subsidize profits of the multi-billion dollar AI industry.”
“Americans are already struggling to make ends meet – they shouldn’t have to foot the bill for big corporations’ massive expansion of data centers. But right now, the richest corporations on the planet are constructing new data centers at working families’ expense – driving up monthly electricity bills for consumers. The principle behind this legislation is simple: the huge corporations building and running data centers should cover the costs of the energy they need – not push those costs onto the backs of consumers,” said Senator Van Hollen.
Joining Senators Welch and Van Hollen as cosponsors of this legislation are Sens. Dick Durbin (D-Ill.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Tammy Duckworth (D-Ill.), Tina Smith (D-Minn.), and Angela Alsobrooks (D-Md.).
Data centers are huge energy consumers. In 2024, the average size of a proposed data center in the US was 300 megawatts, which is as much energy as it takes to power around 240,000 homes. There are currently over 3,700 data centers in the U.S. with new facilities being proposed every day. Although they are not the only factor causing electricity prices to rise, it is clear that new data center energy demand is having a significant and growing impact on Americans’ utility bills.
The enormous energy needs of data centers push costs for consumers higher in two ways: 1) they increase overall electricity demand, outpacing available electricity supply – resulting in higher utility bills across the grid and windfall profits for power generators; and 2) they require expansions of the electric grid and the cost of these infrastructure upgrades are passed onto all electricity customers – not just the new data centers. As a result of the rapid influx of data center energy demand, combined with power supply constraints, electric grids across the country are being pushed dangerously close to their limits, which increases the risk of blackouts.
The Power for the People Act would hold data center operators accountable for their role in driving up energy prices through reforms that would prevent consumers from subsidizing data center development through their utility bills. The legislation would also ensure that data centers connecting to the grid do not overwhelm it, preventing grid reliability issues that result in power outages, and ensuring that all of this work is done with strong labor standards in place, creating good-paying jobs.
Specifically, the Power for the People Act:
- Ensures data centers are paying for the energy costs they cause by:
- Directing states to evaluate the need for new rate classes specifically for data centers to more effectively assign costs caused by that customer class, while providing technical support to states to support this process.
- Directing the Federal Energy Regulatory Commission (FERC) to issue a rule to ensure data centers are paying for the local transmission upgrades that would not be needed if the new data center did not exist – increasing accountability in local transmission projects which often lack oversight.
- Creates a system to manage data center interconnection to the grid that would protect affordability and grid reliability by incentivizing data centers to:
- Offset their impact on the electric grid by bringing their own new and additional power generation and battery storage systems to the grid, as well as by agreeing to certain flexibility requirements.
- Mitigate pollution by using clean energy resources.
- Create good paying jobs with strong labor standards by paying locally prevailing wage, and using registered apprenticeship programs.
- Provides resources to improve data center load forecasting, including weeding out duplicative or speculative requests, as accurate data center energy demand projections are key to ensuring proper investment in the grid and preventing overly inflated energy bills.
The Power for the People Act is supported by the Consumer Federation of America; Delaware Division of the Public Advocate; Illinois Citizens Utility Board; Maryland People’s Counsel; National Consumer Law Center; National Resources Defense Council (NRDC); New Jersey Division of the Rate Counsel; Oregon Citizens Utility Board; Public Citizen; and the Union of Concerned Scientists.
As Ranking Member of the Senate Agriculture Subcommittee on Rural Development, Energy, and Credit, Senator Welch has led the fight to expand access to affordable, high-speed internet, including urging the Trump Administration to support broadband buildout in rural America.
Read and download the full text of the Power for the People Act.
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