Schiff bill makes AI centers pay

Sen. Adam Schiff introduced legislation on May 18 that would require large data centers and other energy-intensive users to pay for the grid upgrades their electricity demand requires, rather than shifting those costs to other customers. The bill, called the Energy Cost Fairness and Reliability Act, comes as utilities, regulators and lawmakers confront a sharp increase in power demand tied to artificial intelligence infrastructure. Schiff said the measure is meant to protect households from higher electricity bills and reduce blackout risks as new facilities connect to the grid. (schiff.senate.gov) His office said the proposal would give the Federal Energy Regulatory Commission and transmission providers new tools to manage those large loads. (investor.nexteraenergy.com) ### What exactly would Schiff’s bill require from AI data centers? Schiff’s proposal would require energy-intensive facilities such as data centers to “bring their own power” and agree to flexible demand as conditions for connecting to the transmission grid. It would also require large-load facilities to pay 100% of the network upgrade costs needed to serve them, according to Schiff’s office. Bloomberg Government reported the bill would apply to data centers over 50 megawatts. That is roughly the scale Schiff’s office and outside coverage have identified as the target for the proposal’s new requirements. (schiff.senate.gov) ### Why is Congress looking at this now? The U.S. Department of Energy said in December 2024 that data centers consumed about 4.4% of total U.S. electricity in 2023 and could reach about 6.7% to 12% by 2028. DOE said total data-center electricity use rose to 176 terawatt-hours in 2023 from 58 terawatt-hours in 2014 and could climb to 325 to 580 terawatt-hours by 2028. (schiff.senate.gov) Schiff said in his May 18 statement that “hard-working Americans should not be left to foot the tab for rising energy costs.” His office said the bill is designed to keep private companies from passing along the cost of new infrastructure needed to serve AI-related load growth. (news.bgov.com) ### Are rising power bills really being blamed on data centers alone? E3, an energy consulting firm, said in a May 18 white paper that electricity-rate pressure reflects several factors, including generation, transmission, distribution, market design, inflation and fuel prices, with data-center load growth being one factor among several. (energy.gov) E3 said its review of 11 recent studies found the relationship between load growth and retail rates was more complex than public debate often suggests. E3 also said that in PJM capacity auctions, about half of the recent price increase it analyzed was tied to load growth, with the rest linked to market design changes, plant retirements and other supply-side factors. (schiff.senate.gov) That paper was funded by the Data Center Coalition, a fact E3 disclosed in the report summary. ### How does the utility industry fit into this fight? NextEra Energy and Dominion Energy said on May 18 they had agreed to combine in an all-stock transaction that would create what they called the world’s largest regulated electric utility business by market capitalization. The companies said the combined business would serve about 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina and own 110 gigawatts of generation. (ethree.com) The merger would place NextEra more directly into Virginia, where Dominion supplies the Northern Virginia market that has become the country’s biggest concentration of data centers, according to widespread coverage of the deal and the companies’ own description of the transaction’s growth rationale. (ethree.com) NextEra and Dominion said the combined company expects 11% annual growth in regulatory capital employed and projected more than 9% adjusted earnings-per-share growth through 2032. ### What happens next in Washington and in the market? Schiff’s bill has been introduced in the Senate, and Bloomberg Government reported it did not yet have Republican co-sponsors as of May 18, though Schiff’s office said it was in talks with other lawmakers. (investor.nexteraenergy.com) The measure would also direct national labs to study the issue and report back to Congress, according to Schiff’s office. The NextEra-Dominion deal now heads toward shareholder and regulatory review, while Schiff’s proposal moves into the congressional process and possible FERC action if lawmakers advance it. Those two tracks — utility consolidation and federal ratepayer protections — are likely to remain central as new AI-related electricity demand comes onto the grid. (investor.nexteraenergy.com) (news.bgov.com)