Data Center Power Costs Push Lawmakers to Search for Solutions

Lawmakers are trying to get data centers to pay for their own power as they gear up to face voters squeezed by high energy bills in the November midterm elections. But it’s not a simple—or fast—fix.

Power-hungry data centers are springing up nationwide to support expanded artificial intelligence capabilities. Wholesale electricity costs have increased up to 267% in areas located near significant data center activity from 2020 to 2025, according to a Bloomberg News analysis.

More than a dozen proposed bills in Congress aim to prevent data centers and their needed electric grid upgrades from burdening residents with associated costs. But state regulators set electricity rates for consumers and govern needed electric grid upgrades, making it difficult for federal lawmakers to figure out how to wade into the issue.

The world’s largest technology companies have volunteered to pay their data center costs in a pledge to the White House, though there’s no enforcement behind the pledge. And action against data center-induced cost increases is seeping into campaign messaging.

“Republicans and Democrats have not yet sorted themselves on this particular topic,” said Christopher Nicholas, a Republican political consultant at Eagle Consulting Group Inc. in Pennsylvania. “There are members of both parties on both sides of this issue.”

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Pushing Down Power Bills

Republicans have pitched a few proposals to prevent price increases from data centers but are split over how much oversight the federal government should have in this area.

Sen. Josh Hawley (R-Mo.) earlier this year introduced a bill that would require data centers to use power sources separate from the larger electric grid. Sen. Richard Blumenthal (D-Conn.) also signed on.

Sen. Tom Cotton (R-Ark.) and Rep. Nick Begich (R-Alaska) pitched similar proposals to exempt data center developers with off-grid power systems from federal regulations.

“American dominance in artificial intelligence and other crucial emerging industries should not come at the expense of Arkansans paying higher energy costs,” Cotton said in a statement.

But not all data center developers want to be off the grid. And it may be hinder AI progress—a Trump administration priority—to prevent grid connections, said Rob Gramlich, president of Grid Strategies LLC.

“We find a lot of value being a part of the grid, and we also see a lot of benefits that we’re providing to the grid,” said Cy McNeill, senior director of federal affairs at the Data Center Coalition, which advocates for data centers.

States are starting to create regulatory tariffs on data center energy usage, which the coalition supports as a solution, McNeill said.

The House Energy and Commerce Committee earlier this year considered a draft proposal, known as the Ratepayer Protection Act, which would acknowledge that states govern electricity rates and data center regulations and creates a framework for how states can prevent consumer price increases.

The panel’s chair, Rep. Brett Guthrie (R-Ky.) expressed concern for giving the federal government too much power, though acknowledged in an April hearing on the issue that data centers should pay for their own power.

Some Democrats say the technology industry’s influence in Congress complicates passing legislation. They’ve pitched other solutions, including enhancing transparency around data center energy use and creating different electricity rate classes for the large loads.

“The main obstacle is that private interests in the industry want total freedom from any sort of clear oversight, and they want to be able to shift some of the cost burden to consumers,” Blumenthal said.

On the Campaign Trail

Data center regulations haven’t fallen neatly along partisan lines. For example, in Pennsylvania, Republican gubernatorial challenger Stacy Garrity is campaigning on a data center moratorium. Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) pitched a nationwide moratorium.

“The issue really does mix up and complicate those partisan divides that define so many issues in Pennsylvania and beyond,” said Christopher Borick, a Muhlenberg College political science professor, who noted he hasn’t seen another issue become so intense with voters so quickly.

Having data centers pay for their own power is a popular take. But there’s a difference in how candidates and lawmakers talk about data centers—as a partner for growth or negative for the community, Borick said.

One of the reasons it’s become such a hot issue is because it touches so many different concerns for voters: land and water use, energy affordability, and AI development, Nicholas said. Residents react to data centers differently if they replace abandoned industrial buildings rather than farmland.

“People may not understand AI, but they understand a big square box replacing green farmland,” Nicholas said.

Rep. Greg Landsman (D-Ohio), who’s sponsored two bills to address data center price hikes, said data centers come up with constituents at every town hall he does.

“You’re seeing Republicans and Democrats say, ‘Whoa, whoa, whoa, we need rules here, guys,’” Landsman said. “Sometimes members of Congress are lagging indicators of where the community is, but they’ll get there.”