Data centers of 100 MW or more would pay full grid upgrade costs under House-passed bill

What does this do?

HR 9340 asks that electricity rates for very large data centers be designed so the customer pays the full extra cost of new power plants, lines, or equipment needed to serve it, including if it later cancels or stops buying power. Utilities would have to require money or other financial guarantees before building the upgrades. It works through a 1978 law asking state regulators and non-state-regulated utilities to consider the standard, with one year to begin and two years to decide.

Who does it affect?

It covers business customers whose facilities mainly run computer equipment for data storage and computing, with combined peak demand of 100 megawatts or more at one site or campus, who ask for or sign contracts after the bill becomes law. Data center operators, electric utilities, state regulators, and other utility customers would be most directly affected.

Why does it matter?

Utilities would no longer be left with upgrade costs if a large customer cancels or stops buying power, which affects how costs are recovered from other customers. States and utilities with a similar rule already in place, a hearing held, or a legislative vote would not have to start over.

What does it cost, and who pays?

• Customer pays full upgrade cost
• Covers later contract cancellation
• Financial guarantee required before building