House subcommittee advances Ratepayer Protection Act as consumer groups call it inadequate

Critics say voluntary rules let data centers shift costs onto ratepayers

The Ratepayer Protection Act, co-sponsored by the bill’s House co-sponsor, U.S. Rep. Kathy Castor, was touted by its supporters as a way to prevent wealthy corporations from shifting their growing energy costs onto residential customers. Castor said in a statement that “ratepayers should not have to subsidize wealthy corporations’ growing energy demands, especially from AI datacenters.”

But consumer advocates said the bill’s provisions fall short of its stated purpose. Jim Walsh, policy director at Food and Water Watch, which opposes the package, said the bill “is posing as a consumer protection measure when in reality it will increase costs on consumers across the board.”

The legislation includes measures that are largely voluntary, meaning state utility commissions that set electric rates can ignore them altogether, Walsh said. At the same time, the package contains benefits for large technology companies that would speed data center construction, prioritize their connection to the electric grid, and open loopholes that would allow companies to claim they are paying for their own power, he said.

The bill’s supporters have cited the rising cost of electricity in areas with data center concentrations. About 200 new data centers have been built over the past three years to house infrastructure for artificial intelligence, and the centers can consume as much power as the largest U.S. cities. In regions with higher numbers of data centers, electricity costs have risen 267% over the past five years. The Federal Reserve found as much as a 6% average increase in wholesale electricity prices related to data centers, with increases as high as 50% in some areas.

The bill’s sponsors assume rapid AI data center growth is inevitable, said Camden Weber, an energy policy specialist at the Center for Biological Diversity, which has also pushed for a moratorium. “Congress is treating datacenter buildout like it’s inevitable, when lawmakers actually have the power to slow it down and prioritize protecting our communities, air, water and wallets,” she said.

One provision in the bill would reduce environmental reviews under the National Environmental Policy Act for transmission lines and other infrastructure needed to connect data centers to the grid. The Trump administration and industry groups have targeted NEPA for adding months to the review process for large federally funded projects. Opponents said the change would accelerate data center development rather than slow it down to allow for proper oversight.

Connecting to the nation’s energy grid can delay data center projects by as much as 12 years, according to the Guardian. Technology companies are increasingly building their own natural gas plants or clean energy infrastructure to bypass grid delays, but those facilities still use natural gas pipelines and large quantities of fuel, driving up costs for individual consumers, Walsh said.

Walsh pointed to Georgia, where some regulators initially did not charge a data center for 30 million gallons of water use. Most new data centers use PFAS “forever chemicals” for cooling, which almost certainly pollute the surrounding area and pose a greenhouse gas threat, but no emission standards exist for the facilities, Walsh said.

“We don’t have the regulatory regime to regulate datacenters, but we’re fast-tracking the projects,” Walsh said.

The bill’s provisions that do rein in costs are mere suggestions for state regulators, who are already broadly accused of putting data center needs first and failing to protect residential ratepayers, opponents said. “They’re misleading the public and making it sound like they’re doing more than they are,” Walsh said.