House Committee Advances Bill to Shield Ratepayers from Data Center Costs
H.R. 9340 would require state regulators to ensure hyperscale facilities pay for their own grid upgrades.
A bipartisan federal bill preventing residential and small business utility customers from subsidizing hyperscale data center infrastructure costs cleared a key House committee this week with unanimous support.
The Ratepayer Protection Act (H.R. 9340) advanced from the House Committee on Energy and Commerce by a 52-0 vote on July 21, 2026. The committee is chaired by Kentucky Republican Rep. Brett Guthrie (KY-02).
Targeting Cost Allocation
The legislation amends Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (PURPA) to establish cost-allocation rules for electrical generation, transmission, and distribution infrastructure serving large-load customers. Data centers with 100 megawatts or more of peak demand would be required to pay the full incremental costs of grid upgrades needed to serve them.
Rather than imposing a blanket federal mandate, the bill requires each state regulatory authority to consider adopting the federal standard for cost recovery. States that have already implemented comparable standards or conducted relevant proceedings are exempt.
Bipartisan Introduction
The bill was introduced on June 18, 2026, by Rep. Gabe Evans (R-CO-08) and Rep. Kathy Castor (D-FL-14), signaling cross-party concern over how the AI boom's infrastructure demands are funded.
The rapid expansion of artificial intelligence and cloud computing has triggered what industry observers call a "data center rush," particularly in states like Kentucky. These facilities require enormous amounts of electricity, forcing utilities to make significant capital investments in grid infrastructure.
Why It Matters
Without specific cost-allocation rules, utilities typically recover these capital expenditures through general rate increases spread across all customers. The legislation shifts the financial risk of grid modernization from the general public to the tech companies benefiting directly from the infrastructure upgrades.
If enacted, the bill could alter how data centers are sited and funded across the United States, potentially affecting the economics of the AI industry's explosive growth.
State and Federal Parallel Efforts
Kentucky State Representative Adam Moore (District 45) has sponsored a separate Kentucky Ratepayer Protection Act at the state level. Moore is a state lawmaker, not a U.S. Representative, and did not sponsor the federal bill, though both measures share similar consumer protection objectives.
The federal legislation addresses electrical infrastructure only. Water-related provisions for data centers appear in separate state-level legislation, not in H.R. 9340.
The bill now moves to the House floor for further consideration.