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Requires large private data centers to source all energy off‑grid (or obtain Secretary‑issued certificates offsetting rate impacts) and demands public disclosure of usage and financial arrangements.
Official title: Impose certain requirements on data centers to ensure the prioritization of residential ratepayers, and for other purposes.
Introduced February 11, 2026 by Joshua David Hawley · Last progress February 11, 2026
The bill strengthens federal authority, transparency, and ratepayer protections to improve grid planning and resilience for large data centers, but does so at the cost of significant compliance burdens, potential preemption of local control, environmental and planning risks from off-grid requirements, and steep penalties that could deter investment.
Utilities, energy companies, data centers, and state/local planners gain clearer federal authority and coordination treating data-center construction and power supply as interstate commerce, enabling stronger federal standards and cross-state grid resilience efforts that support reliable services.
Residential and small-business ratepayers are protected through a clearer regulatory framework (≥20 MW threshold), Secretary-issued Zero Rate Effect Certificates, and a Rate Effect Credit mechanism that require offsets for electricity-rate impacts, improving predictability for grid planning and limiting bill increases.
Local and state governments, utilities, and ratepayers get greater visibility into planned data-center utility demand, subsidies, and acquisitions, improving grid planning, public accountability, and reducing the chance of undisclosed favorable deals.
Covered entities face large new compliance costs, required Rate Effect Credits/payments, potential obligations to go fully off-grid, and steep penalties (at least $1,000,000/day), creating major financial risk that could raise consumer prices, slow or deter investment, or force closures.
The bill expands federal regulatory reach and could preempt state and local land-use and permitting authority over data-center siting and energy use, reducing local control and complicating economic development decisions.
Requiring or incentivizing off-grid generation for major data-center loads risks increasing local pollution and health harms if fossil fuels are used, imposing burdens on nearby communities.
Based on analysis of 5 sections of legislative text.
Requires most private data centers to obtain all energy (including backup) from off‑grid sources and imposes strict disclosure and mitigation rules for rate impacts on utilities and customers. Existing grid‑connected data centers get up to a 10‑year transition if the Department of Energy issues annual Zero Rate Effect Certificates after finding no net rate increases to ratepayers, and large civil penalties apply for violations. Also creates mandatory public disclosure rules for covered entities and utilities about estimated and historical utility usage, acquisitions, and any financial arrangements (subsidies, credits, discounts, tax benefits, or cost‑sharing) meant to offset rate impacts from data centers.