The US House of Representatives plans to vote on new electricity regulations on Wednesday: requiring data centers to bear incremental electricity costs, pointing the finger on tech giants to transfer electricity bills

The Zhitong Finance App learned that the US House of Representatives is expected to vote as early as Wednesday local time on a bipartisan legislation aimed at curbing rising electricity costs associated with data center expansion to support artificial intelligence. At the time of this vote, government officials across the US are facing an increasingly pressing question: how to prevent the soaring cost of electricity demand in data centers from being passed on to ordinary households.

The legislation, called the Ratepayer Protection Act (H.R. 9340), was co-proposed by Florida Democratic Representative Kathy Castor (Kathy Castor) and Colorado Republican Representative Gabe Evans (Gabe Evans) in June of this year, and has been co-signed by 42 members of the House of Representatives (35 from the Republican Party and 7 from the Democratic Party). It requires state utility regulators to consider whether large power users, including data centers, should bear the incremental costs of building new power infrastructure to meet their electricity needs. On July 21 of this year, the bill was passed by a full 52-0 vote in the House Energy and Commerce Committee, and on September 10, it was included in the full House agenda.

A federal bill that “requires states to consider”

Judging from the text, this is not a direct pricing bill. It amends the Utility Regulatory Policy Act of 1978 (PURPA) — adding a new standard to the federal electricity pricing system: for non-residential users with a peak demand of 100 megawatts or more for a single site or park (mostly data centers), the rate design must cover the full incremental costs of generation, transmission, and distribution upgrades that serve them; at the same time, it requires large users to provide financial guarantees before the utility makes infrastructure investments to prevent the costs from falling on existing users after the project shrinks or ends.

According to the official website of the National Assembly and compiled by industry media Environment+Energy Leader, state regulators must initiate review within one year after the bill comes into effect and complete it within two years; states that have adopted or have substantially reviewed similar cost sharing rules can be exempted. The vote will use a “suspension of the rules” (suspension of the rules) process — a fast track for non-contentious legislation that requires a two-thirds majority to pass, and currently the market and congressional aides generally expect it to pass smoothly in the House of Representatives.

The real hurdle is in the Senate. Companion Bill S.5028, proposed by Ohio Republican Senator Jon Husted (Jon Husted), has yet to schedule any committee hearings, and the Senate is only about three weeks away from recess before the November 3 election. In other words, this bill is likely to enter the election campaign period in the form of a “statement from the House of Representatives” rather than become law.

But it's symbolic enough: it codifies part of the “Ratepayer Protection Pledge” (Ratepayer Protection Pledge) issued by the White House in March. The commitment was first signed by seven companies, Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI. According to reports, more than 200 organizations have participated, covering 80% of the nation's electricity supply and involving 263 million Americans.

House Democratic leader Hakeem Jeffries (Hakeem Jeffries) endorsed the bill at a press conference this week, calling it an “appropriate step forward,” but added “clearly more needs to be done.” Former Federal Energy Regulatory Commission (FERC) member Allison Clements (Allison Clements) commented more restrained: “This User Protection Act is actually just a relatively modest step in the right direction. Its value is to send a signal — if passed in a bipartisan manner, that Congress continues to be aligned with the priority of protecting customers in the face of all this new investment and growing demand.”

Food & Water Watch, an environmental organization that advocates suspending the construction of new data centers across the country, criticized the legislation for focusing only on electricity costs in a narrow sense and not addressing broader concerns about data center impacts on water resources, pollution, and communities.

Beyond legislation: the real pricing is in the state council

It should be pointed out that even if passed, this bill is limited in its binding force — it only requires states to “consider” this standard, and it is not mandatory to adopt it. Sara Chieffo (Sara Chieffo), senior vice president of government affairs at the League of Conservation Unions (League of Conservation Unions), said before the vote, “There is only one weak directive requiring states to voluntarily consider adopting cost protection, and state regulators can eventually ignore this bill.”

And the industry is also refuting the “cost transfer” narrative itself. The Data Center Coalition, an industry organization representing data center operators, released a study saying that there is no evidence that data centers are driving up residents' bills under the current rate structure; the EPRI study even found that new durable demand is spreading the fixed costs of power grids to more electricity sales, which in turn may lower residential rates. Pacific Gas & Electric (PG&E) CEO Patti Poppe (Patti Poppe) told investors in July: “Every new gigawatt load, if properly priced, could bring about a 1% rate reduction for all customers.” After General Electric's Schedule 96 heavy duty rate in Portland, Oregon came into effect in June, the data center rate increased by 29% and the residential rate decreased by 1.3% during the same quarter.

In other words, this isn't a bill that will determine the end of AI's electricity costs. The “obligation to consider” at the federal level only indicates the direction. The actual pricing occurred in more than 23 states that have established heavy duty rates, 104 approved or proposed rate plans, and in hearings in Virginia, Georgia, and Ohio. Clements' phrase, “relatively mild but in the right direction,” is probably the way the market should read: the unanimous political signal of the two parties has paid back the ticket price, and the final distribution of the electricity bill will have to be decided by each state one by one.