Sponsors (2)
This bill trades clearer federal authority, infrastructure planning, consumer protections, and transparency around large data centers for substantial new compliance costs, heavy penalties, potential preemption of local control, and risks to public health and commercial confidentiality.
State and local governments, utilities, and regulators gain a clear federal legal basis to treat data centers and their power supplies as interstate commerce, enabling coordinated federal action and enforcement across state lines.
Data center owners and operators get a clearer regulatory definition and framework, reducing planning and compliance uncertainty for projects.
Mechanisms (Rate Effect Credit and Zero Rate Effect Certificate) aim to limit upward pressure on residential electricity rates, protecting taxpayers and residential communities from some grid-impact costs of new large data centers.
Covered entities and utilities face significant new compliance, permitting, and capital costs (on-site power systems, credits, reporting) that are likely to be passed on to customers or reduce local investment and could deter data center investment.
A $1,000,000-per-day minimum civil penalty creates extreme legal and financial risk for operators, potentially prompting litigation, closures, or deterrence of future investment.
Expanding federal jurisdiction over data center siting and power could preempt state and local control over siting and environmental rules, reducing local authority and flexibility.
Based on analysis of 5 sections of legislative text.
Prohibits new grid‑connected large data centers after 180 days, requires existing ones to get annual federal certificates or pay offsets to ensure no rate increases, and mandates public disclosures.
Bans private data centers that draw any energy from the electric grid starting 180 days after enactment unless they qualify for a limited exemption; new centers must be fully off‑grid (on‑site or captive power). Existing grid‑connected centers can operate up to 10 years only if the Secretary of Energy issues an annual Zero Rate Effect Certificate showing they will not raise utility rates (prioritizing residential ratepayers), or if the data center pays Rate Effect Credits or other financial offsets. The bill also requires detailed public disclosure by covered entities and utilities about energy use, property acquisitions, utility agreements, and incentives, and imposes large civil penalties for violations.
Introduced February 11, 2026 by Joshua David Hawley · Last progress February 11, 2026