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A new Republican-backed bill would require large data centers and other major electricity users to pay for the power infrastructure needed to support their operations, rather than allowing those costs to be passed onto households and small businesses through higher utility bills.
Senator Jon Husted of Ohio introduced the Ratepayer Protection Act on July 20, arguing that the United States can expand AI infrastructure without saddling consumers with the associated energy costs.
“If America wants to lead the world in AI and strengthen our national security, we have to build the energy infrastructure to support it. But we must do that without passing the costs on to working families and small businesses,” Husted said in a statement. “The Ratepayer Protection Act would keep America globally competitive while protecting Ohioans and Americans from higher electricity bills.”
What the Bill Would Do
The legislation would encourage states and public utility commissions to adopt standards governing how large electricity users connect to the grid.
The proposal specifically targets facilities with demand of 100 megawatts or more, a category that includes many of the hyperscale data centers being built to support the demand for AI.
Under the bill, these large-scale data center operators would be expected to:
- Pay the full cost of any power-grid improvements needed to connect and serve their facilities, such as upgrading transmission lines.
- Cover the costs of building the power generation and transmission infrastructure needed to support their project.
- Provide financial guarantees to make sure utilities and electricity customers aren’t left covering costs if a project is delayed, reduced in scope, or abandoned.
- Bear responsibility for fixed infrastructure costs rather than passing them on through higher residential electric bills.
The measure has bipartisan support in the House, where companion legislation was introduced by Representative Gabe Evans, a Colorado Republican, who said, “The Ratepayer Protection Act is a bipartisan, commonsense solution that protects everyday Americans and ensures our nation can continue to win the AI race,” and Representative Kathy Castor, a Florida Democrat, who added that “Ratepayers should not have to subsidize wealthy corporations’ growing energy demands, especially from AI data centers.”
Newsweek has contacted the offices of Senator Jon Husted and Representative Kathy Castor via LinkedIn and email for comment on the proposed legislation, including what evidence they have that data-center-related costs are currently being shifted to ratepayers, whether the bill has support from utilities and grid operators, and how much consumers could save if it is enacted.
Connection to Trump’s Data Center Energy Pledge
The bill would turn major provisions of the Ratepayer Protection Pledge—which was unveiled at a White House event in March—into law.
Under this pledge, major technology companies including Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI agreed to pay for the energy infrastructure required for new data centers rather than shifting those expenses onto American consumers.
The pledge called on companies to:
- Build, buy or bring online the power required for their data centers.
- Pay for grid and transmission upgrades.
- Continue paying agreed electricity rates even if facilities use less power than anticipated.
- Invest in local jobs and workforce development.
Supporters argue these measures could help prevent electricity price spikes as AI-driven energy demand accelerates nationwide.
Growing Backlash Against Data Centers
The introduction of the Ratepayer Protection Act comes as opposition to large-scale data center construction continues to grow across the United States.
On Saturday, 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 across 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.
Signs at rallies included slogans such as “We thrive on water not data” and “Georgia never voted for hyperscale AI data centers.”
The organizers of the protests said residents are becoming increasingly concerned that communities are bearing the costs while technology companies receive the benefits.
Opposition to the Ratepayer Protection Act
Not everyone is convinced the legislation would adequately protect consumers.
Critics, including consumer advocacy group Food & Water Watch, have argued that the bill doesn’t go far enough and could still leave loopholes that benefit utilities and data center developers.
Jim Walsh, policy director at Food & Water Watch, told The Guardian that the legislation largely addresses the needs of data centers and utilities rather than ratepayers, saying that “the bill is posing as a consumer protection measure when in reality it will increase costs on consumers across the board.” Walsh argued that requiring state regulators to consider certain standards does not guarantee those protections will ultimately be adopted or implemented in a way that shields consumers from higher costs.
Newsweek has contacted Josh Levi, president of the Data Center Coalition, via LinkedIn for comment on the proposed legislation and its potential impact on the data center industry.
Growing Public Opposition to AI Data Centers
A report by Axis Intelligence cites Gallup polling showing 71 percent of Americans oppose the construction of AI data centers in their local area, including 48 percent who are strongly opposed. By comparison, 53 percent opposed building a nuclear power plant nearby, suggesting opposition to data centers now exceeds resistance to some other major infrastructure projects.
Concerns are largely driven by the facilities’ significant electricity and water demands. Gallup found that 46 percent of Americans worry “a great deal” about the environmental impact of AI data centers, while another 24 percent worry “a fair amount.” Among opponents, half cited data centers’ extensive use of resources, including water and energy consumption, as a key concern.
Why It Matters
The fight over who should pay for America’s AI infrastructure is quickly becoming one of the biggest policy debates surrounding the data center boom.
Utilities across the country are forecasting rising electricity demand as technology companies race to build facilities capable of powering AI models, cloud computing platforms and other digital services.
Husted’s Ratepayer Protection Act seeks to address one of the central concerns driving public backlash: Whether ordinary consumers will end up paying for the massive investments required to support the next generation of AI infrastructure.
As opposition to data center construction grows and lawmakers face increasing pressure from constituents, the issue is likely to remain at the center of national energy and technology debates in the months ahead.
The House version, H.R. 9340, has been referred to the House Energy and Commerce Committee for consideration, but has not yet received a committee vote. It must first advance through committee review, pass the House and Senate, and be signed by the president before becoming law.
Contact Newsweek editors on this story: Ben Kelly and Trevor Davies.
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