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The House Energy and Commerce Committee advanced new legislation that could require data center operators to pay massive electricity bills amid a growing backlash to the construction of AI data centers across the country.
The committee unanimously advanced the Ratepayer Protection Act, a bipartisan bill introduced by Colorado Republican Representative Gabe Evans that would establish federal standards for state regulators when reviewing proposals for new customers if they have an electricity demand of 100 megawatts or more—which would include the large AI data centers popping up across the country.
The growth of artificial intelligence (AI)-powered data centers, which require large amounts of electricity and water to cool servers, has set off a national debate. Critics have raised numerous concerns about the centers—including their impact on the environment, the amount of water they use, their potential to drive up electricity bills and the noise they generate in communities.
Supporters of these data centers, however, have warned that too much regulation could cost the United States economic growth at the benefit of competitors like China.
Ratepayer Protection Act: What It Means for Data Centers and Consumers
According to Evans’ office, the Ratepayer Protection Act would recommend requiring financial assurances that large-load customers will pay for the generation, transmission and other infrastructure to serve their demand, rather than have existing ratepayers take on that financial burden.
It would also recommend charging large electricity customers for extra grid update costs through “special rate structures or other agreements.” This is to ensure that utilities and existing ratepayers are not left paying for infrastructure if they scale back operations or leave the system, Evans’ office said.
“America must build the energy infrastructure necessary to win the global AI race and outcompete adversaries like Communist China—but hardworking families should never be forced to subsidize that growth through higher electric bills,” Evans wrote in a statement after the bill advanced through committee.
Representative Jennifer McClellan, a Virginia Democrat, said in committee remarks that she supports the bill.
“What Virginia’s experience makes clear is that as we build the infrastructure necessary to support unprecedented electricity demand, we must also ensure that the costs of serving that new demand are borne by those who create it,” she said.
Ratepayer Protection Act Faces Criticism
Not everyone is on board with the Ratepayer Protection Act, which has drawn criticism from the data center industry and activists opposing its rapid expansion.
Data Center Coalition President Josh Levi told Newsweek that the group supports the original version of the bill, but that the committee’s changes “narrow its scope to single out the data center industry, leaving everyday Americans vulnerable to the costs associated with large load growth from other industries as they continue to expand operations in the U.S.”
“Our members are actively investing hundreds of billions of dollars in the U.S., driving manufacturing and supply chain growth, creating millions of high-wage jobs, and generating tax revenue that helps fund schools, transportation, public safety, tax relief and other local priorities,” Levi said. “As the data center industry builds the nation’s digital infrastructure, we are committed to paying the full cost of the energy we use.”
Food & Water Watch, an environmental group that has opposed the rapid expansion of data centers, wrote in a June 23 statement that it also takes issue with the bill. Food & Water Watch Managing Director of Policy and Litigation Mitch Jones described it as the “greatest use of a sly misnomer since the Vikings named Greenland.”
“This legislation is an egregious handout to Big Tech that would do nothing to protect people and communities from the skyrocketing electricity rates, alarming water consumption and fossil fuel pollution that hyperscale data centers bring wherever they land,” he said.
Data Center Industry Faces Regulation Push
Several lawmakers have introduced new bills aimed at regulating data centers.
Representative Byron Donalds, a Florida Republican who has faced criticism over his support for data centers amid his run for governor, introduced the Protecting Ratepayers Act, which his office said would require “entities that build, own, or operate data centers derive all of their energy and water from alternative sources.”
Senator Jon Husted, an Ohio Republican, introduced the Ratepayer Protection Act, a companion to Evans’ bill for the upper chamber of Congress, on July 20.
Several gubernatorial candidates have voiced support for data center moratoriums. New York is the only state that has enacted one, with Governor Kathy Hochul, a Democrat, this month signing into law a one-year pause on the building of new large-scale data facilities.
“As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul said, according to Reuters.
More than 3,000 data centers are already operating throughout the United States, with more than 1,500 new facilities in various stages of construction, according to the Pew Research Center.
Opposition to Data Centers Grows Across America
The bill’s advancement comes as opposition to large-scale data center construction continues to grow across the United States.
Recent polling suggests that most Americans do not want to see data centers constructed in their communities. A Gallup poll, taken March 2-18, found that 27 percent of Americans would favor the local construction of data centers, compared to 71 percent who would oppose it.
A recently updated Data Center Opposition Report documented the rapid rise in grassroots opposition to AI data centers across the U.S., identifying 430 local data center opposition groups organizing through Facebook, compared with 268 in April. It found that more than 525,000 Americans have joined groups to resist the construction of the facilities in at least 40 states.
Total opposition membership has increased almost sevenfold since December 2025, according to the findings.
On July 18, HumansFirst, a grassroots activist organization led by Tea Party veteran Amy Kremer that has emerged as a leading opponent of the rapid expansion of AI-related data centers, organized 142 protests in 42 states in what has been described as the first coordinated nationwide effort to channel public anger over the AI infrastructure boom. Protesters cited concerns over electricity costs, water consumption, land use, transparency and local community impacts.
Environmental activist Erin Brockovich has been at the forefront of data center activism. She explained on comedian Theo Von’s podcast This Past Weekend on Sunday that her activism on the issue began after hearing questions from a community concerned about data centers.
“I woke up one morning and I had 30 emails…from the same community regarding the same issues—data centers,” Brockovich said.
Contact Newsweek editors on this story: Jenni Fink and Dave Siminoff.
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