Data Center Legislation

Summary

• The Senate may consider data center legislation before departing Washington for midterm campaigns.
• The Ratepayer Protection Act (RPA) passed the House earlier this year & would establish a new federal ratemaking standard for state utility commissions to consider.
• State commissions would be required to consider specific factors under the RPA but would not be mandated to act in a specific way.
• The RPA targets large-load customers defined as non-residential electric users primarily operating IT infrastructure for data storage & computational services with a peak demand of 100 megawatts or more at a single site.
• Republicans seek a vote before the midterms to demonstrate concern about affordability, while Democrats may attempt to block the bill on grounds that it fails to sufficiently contain data center costs.
• If the Senate blocks the RPA, the bill could reemerge during the lame duck session following the midterm elections.
• The lame duck session may lack productivity due to a crowded agenda & a political environment potentially hostile to passing contentious legislation.
• If Democrats win the House, they may pursue stronger legislation in 2027 when they possess more leverage.
• Responsibility for data center regulation is expected to ultimately fall within the purview of states rather than the federal government.