Senate data-center costs bill ignites debate over consequences
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A new Senate bill that would ensure the cost of data centers' energy use isn't passed on to consumers is stirring up plenty of debate — pro and con — among AI and energy interests.
Why it matters: The bill from Sens. Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.) is one of the first bipartisan pieces of legislation on an issue that's drawn plenty of attention from Congress.
The big picture: The measure — which Axios reported on exclusively before its introduction last week — would guarantee that consumers won't face any rate hikes driven by data centers.
- It also would ensure that new data centers use energy from generation sources that are separate from the grid.
Driving the news: Ari Peskoe, who directs Harvard Law's Electricity Law Initiative, touched off a mini-debate on X after he posted about the bill. He said it achieves the sponsors' goals.
- "The bill's merit is its simplicity. It bans all new grid-connected industrial computing facilities," Peskoe said in an email.
- "That's easy to implement, would generally force data centers to pay for their full energy costs, and would prevent utilities from shifting any costs to the public, since utilities would not be allowed to connect new data centers."
The other side: One of the respondents to Peskoe's post — Craig Lawrence, a partner at Energy Transition Ventures in Austin, Texas — questioned whether the bill has a "constitutional rationale," given states' regulation of utilities.
- "I think it's a politically popular stance that would get overturned by the courts," Lawrence said on X. He later declined to comment further.
Joseph Hoefer, chief AI officer and principal at Monument Advocacy in D.C., said in an email that the legislation "risks creating a whole set of consequences that ripple far beyond utility bills."
- "I worry that the immediate effect would be to stall a significant portion of projects that are already in development, because once you inject that level of power access uncertainty into the equation, financing tightens up very quickly," Hoefer said.
- "And at a moment when AI infrastructure is increasingly viewed as strategic, not just commercial, that slowdown has broader implications for US competitiveness."
Zoom in: There's major political pressure on both sides of the aisle to make tech companies pay for surging power costs rather than passing them on to customers.
- Hawley has been outspoken about AI dangers and consumer costs. He wants to codify President Trump's pledge last month to not let the proliferation of AI data centers increase electricity bills.
The bottom line: The bill faces long odds of becoming law in an election year.
- Analysts at Capstone said a nationwide mandate would be positive for independent power producers bringing new assets online. But they predicted that hyperscalers and others owning existing assets will "staunchly oppose" the bill.
- Still, it's an early marker in what promises to be a much wider battle.
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