A federal proposal intended to protect electricity customers from infrastructure costs created by large data centers is advancing as Minnesota communities debate the energy and water demands of proposed technology developments.
The U.S. House approved the Ratepayer Protection Act by a vote of 417 to 3. The legislation calls on state utility regulators to consider requiring large electricity users, including data centers, to bear the additional infrastructure costs created by their operations.
President Donald Trump said Friday that he was discussing the legislation with Senate Majority Leader John Thune.
The bill’s central principle is that households and existing businesses should not be required to subsidize new power plants, substations, transmission lines and other infrastructure built primarily to serve exceptionally large electricity customers.
The proposal is directly relevant to Minnesota, where communities including Pine Island and Hermantown have confronted questions about data center energy use, water demand, tax incentives and the extent of public participation before projects advance.
Utilities must often make major investments before a large data center begins operating. If a project is delayed, reduced or abandoned after infrastructure is built, other customers can be left carrying some of the resulting costs unless regulators and utility contracts provide adequate protections.
Supporters of stronger ratepayer safeguards argue that data center operators should provide financial guarantees, pay for dedicated infrastructure and accept electricity rates reflecting the actual cost of serving them.
Critics of the House legislation say its language may not be strong enough because it largely directs regulators to consider protective measures instead of imposing a uniform national requirement. An attempt to move the measure quickly through the Senate was blocked by Sen. Martin Heinrich, who argued that the proposal relied too heavily on voluntary action.
