On Sept. 16, the House overwhelmingly backed a federal rule requiring America’s largest data centers to pay for the electrical infrastructure built to serve them, advancing an approach already emerging in state utility regulation.
HR 9340, known as the Taxpayer Protection Act, passed 417-3 but stalled in the Senate the next day amid disagreement over whether states should only consider the proposed standard or whether high-load customers should face a direct federal requirement to pay certain grid costs.
Covering data center campuses with a peak demand of at least 100 MW, the bill says the rates should recover from those customers the “full and incremental cost” of generation, transmission and distribution upgrades needed to serve them, including remaining costs if they stop buying power. Customers would also provide financial guarantees or contributions before the utilities make the upgrades.
The House approach leaves the final rate decision to state regulators. House Energy and Commerce Committee Chairman Brett Guthrie (R-Ky.) said in prepared remarks that the bill aims to protect customers from infrastructure costs needed for the development of artificial intelligence “while protecting existing state authorities.”
Sen. Martin Heinrich (DN.M.) blocked Sen. Jon Husted’s (R-Ohio) unanimous consent request to advance HR 9340 on September 17. “It’s not enough to tell states to consider making data centers pay for network upgrades,” Heinrich said on the Senate floor. Instead, Heinrich sought passage of his GRID Savings Act, which would directly require high-load customers to cover certain grid connection costs. Sen. Bernie Moreno (R-Ohio) opposed Heinrich’s request.
Utilities can face generation and grid investments years before they know if huge new loads will arrive as forecasted.
Utilities put larger loads at greater risk
A Lawrence Berkeley National Laboratory study from August found that utilities and regulators are developing large-load rates and special contracts to manage risks, including insufficient power supply and underutilized infrastructure.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new intelligent AI search tool.
Ask ENR →
Minimum demand provisions are increasingly common among the tariffs Berkeley Lab reviewed, with an average requirement equal to 80% of contracted demand, regardless of actual usage. Dominion Energy Virginia’s GS-5 schedule sets minimum billing at 85% of contracted transmission and distribution demand and 60% of generation demand.
Other approaches tie customers directly to infrastructure costs. Pennsylvania regulators recommended recouping all interconnection costs, including network transmission upgrades that would otherwise not be built. A proposed settlement from Minnesota Power would make Google responsible for the initial development costs associated with the new generation and related infrastructure, along with necessary transmission upgrades for its data center.
A rendering shows the planned 1,383 MW data center in Saline Township, Michigan, where DTE Electric’s contracts include long-term payment protections and customer-funded energy storage.
Rendering courtesy of Related Digital
A project that ENR has been tracking shows how these protections can translate into real infrastructure commitments. In December 2025, the Michigan Public Service Commission conditionally approved DTE Electric Co.’s contracts. to service a planned 1,383 MW data center in Saline Township for Green Chile Ventures LLC, an Oracle Corp. subsidiary.
The main agreement has a duration of 19 years and requires the payment of at least 80% of the contracted demand. If the facility goes out of business early, Chile Verd could owe up to 10 years of minimum billing demand.
MPSC Chairman Dan Scripps said in a statement at the time that the provisions provided “strong protections for taxpayers against the risk of stranded costs and cost subsidies.”
The project’s construction commitment goes beyond its electricity purchases. Green Chile would bear the costs over 15 years for DTE to develop, own and operate 1,383 MW of energy storage to match the contracted data center demand. The storage agreement also includes early termination, credit and collateral requirements.
Courts are evaluating whether these safeguards adequately protect other customers. Michigan Attorney General Dana Nessel argued in an August appeal brief that DTE sought approval for billions of dollars in infrastructure investment without adequately establishing that the resulting costs would not flow to other customers. He also contested the commission’s decision to approve the contracts without a contested procedure.
The MPSC had conditioned approval on DTE’s representations that Chile Verd’s payments would cover service costs so that those costs would not be borne by other customers. DTE subsequently agreed to the terms.
From Financial Commitment to Construction
ENR’s recent reports on the energy construction pipeline found that data centers were the main driver of MSI Economics’ electricity demand growth forecast and its greatest uncertainty.
Interconnection queues show a wide gap between proposed and completed power projects in US regions. MSI Economics uses the status of the queue as a criterion to distinguish the announced capacity of projects positioned to reach construction. Click on the image to enlarge it.
Courtesy of MSI Economics/MOCA Systems Inc.
Of the 12 GW to 16 GW of data center-related capacity projected for delivery in 2026, MSI found only about 5 GW under construction. Their model sought an advanced interconnection position, an executed interconnection agreement, reserved long-term equipment and committed funding to distinguish executable projects from announcements.
“You can build the whole project and then put it at risk until those transformers, until those switches are available,” MSI Chief Economist Brandon Michalski said in a Sept. 14 interview with ENR.
Associated General Contractors of America chief economist Ken Simonson separately told ENR that he saw “significant constraints in the supply of natural gas turbines and custom transformers,” citing limited production capacity and supplies of grain-oriented electrical steel, as well as “fierce competition for qualified electricians” among data centers, semiconductor plants, LNG facilities and power projects.
