Data centers would be required to cover the full additional cost of meeting their power requirements under a new bill. The bill’s introduction comes as the rapid development of data centers across the country has become a political flashpoint ahead of November’s midterm elections, with residents and lawmakers voicing concerns over the facilities' potential electricity and water consumption and environmental impacts. Representative Eugene Vindman, a Virginia Democrat representing the state’s 7th Congressional District, introduced the bill on October 14.
"Hardworking Americans should not have to pay higher electricity bills to subsidize some of the largest and most energy-intensive data centers in the world," Vindman said in a statement emailed to Newsweek. "As data centers and artificial intelligence drive growing demand for electricity, the billion-dollar corporations benefiting from that growth need to pay their fair share," he said. "I've heard directly from hundreds of Virginians who are fed up with skyrocketing utility bills and watching their hard-earned money go toward subsidizing massive data centers.
"That's why I introduced this legislation to put ratepayers first and ensure these companies, rather than hardworking families and small businesses, cover the costs of their growing electricity demands. This is a commonsense issue that should transcend party lines, and I urge my colleagues to join me in protecting consumers and getting this bill across the finish line." The Make Data Centers Pay Act would amend the Federal Power Act to require medium- and large-sized data centers to cover the full incremental electricity costs associated with serving them, "preventing those expenses from being passed on to residential customers and small businesses," according to a press release from Vindman's office. The Federal Power Act is the main federal statute governing wholesale electricity sales, power transmission and hydroelectric power regulation.
The new legislation would require data centers and high-density computing facilities using at least 20 megawatts of electricity to cover the incremental costs of supplying them with power. The stated objective of the Make Data Centers Pay Act is similar to that of the Ratepayer Protection Act, which, as Newsweek previously reported, would require states to consider standards under which large electricity users pay the incremental costs of generation, transmission and distribution upgrades needed to serve them. States would not be required to adopt the standards.
Instead, regulators would have to consider them and issue a decision within a specified period. The House passed the Ratepayer Protection Act in September, but the bill stalled in the Senate. The bill’s introduction comes after a Pew Research Center survey published in September found that Americans’ attitudes toward the possible environmental and economic effects of data centers had grown more negative since the beginning of the year, with a majority saying they’d be uncomfortable if a new data center began operating in their local area.
According to the survey, 54 percent said data centers were mostly bad for the environment, up from 39 percent in January. Half said the projects were mostly bad for home energy costs, compared with 38 percent at the start of the year, and 49 percent said they were mostly bad for nearby residents’ quality of life, up from 30 percent. President Donald Trump has backed the developments, however, and has framed them as a driver of prosperity and important in maintaining a strategic edge over China.
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