Bipartisan Legislation Targets Data Center Power Usage to Protect Consumers

On Wednesday, Senators Josh Hawley and Richard Blumenthal unveiled the first bipartisan proposal in Congress aimed at preventing data center power usage from impacting consumers’ electric bills. Known as the “Guaranteeing Rate Insulation” or “GRID” Act, this legislation has two primary objectives: ensuring that data center-related costs do not translate to increased utility bills for consumers and prioritizing grid access for regular electric users over commercial data centers. The proposal also requires new data center developers to rely on off-grid power sources, with a 10-year transition period for existing facilities.

Additionally, under the proposed legislation, data center operators would be required to publicly disclose both current and projected energy consumption. Senator Hawley, a Republican from Missouri, emphasized, “American families should not have to shoulder the burden of the rising electricity costs produced by data centers in Missouri and across the country.” Senator Blumenthal, a Democrat from Connecticut, added that the legislation is designed to prevent major technology companies from imposing what he described as an “AI-driven drain on families’ pocketbooks,” by making sure family resources are not diverted to support Big Tech’s energy and infrastructure expenses.

This bipartisan measure follows several Democratic-led initiatives that also seek to mitigate the impact of data center operations on Americans’ utility bills. These include Senator Chris Van Hollen’s “Power for the People” Act and initiatives by Representatives Mike Levin, Kathy Castor, and Rob Menendez, such as the “SHIELD Act” and the “PRICE Act.” In December, Representative Greg Landsman also introduced legislation named the “Protecting Families from AI Data Center Energy Costs Act.”

Families should not be forced to bankroll Big Tech’s electricity and infrastructure costs,” Senator Blumenthal stated.

Hawley and Blumenthal’s initiative emerges shortly after former President Donald Trump expressed a commitment to prevent utility bill increases tied to data center expansion. Trump emphasized his administration’s efforts in ensuring that Americans are not financially burdened by these developments, stating that while data centers are crucial for growth in AI, the companies building them must finance their own energy needs.

The proposal has gained attention at the state level as well. For instance, Pennsylvania Governor Josh Shapiro recently introduced a set of guidelines for state data centers, advocating for legislative backing to make them law.

Within the tech sector, opinions differ regarding the financial responsibilities for power consumption. Some companies, like Microsoft, have shown willingness to invest more in energy costs and develop independent power sources, while others argue they already cover their fair share.

The issue of powering data centers, crucial for AI advancements, is becoming central to political discussions as leaders prepare for upcoming midterms and the next presidential election. At the community level, there are concerns about the potential rise in utility costs and other challenges associated with data center electricity usage, prompting some residents to question the need for extensive data center growth.

Allan Smith is a political reporter for NBC News.