Warner Backs Bill to Shift Data Center Costs Away from Ratepayers

U.S. Sen. Mark Warner (D-Va.) has co-sponsored legislation intended to address rising electricity costs associated with the rapid expansion of data centers in Virginia and across the nation.

The proposed Power for the People Act seeks to ensure that data center operators, rather than residential utility customers, bear more of the costs associated with the significant energy demands and infrastructure upgrades required to support the industry.

The legislation is particularly relevant to Virginia, which is home to the largest concentration of data centers in the world, with Loudoun County serving as the center of what is commonly known as “Data Center Alley.”

Loudoun County remains the world’s largest concentration of data centers and continues to receive proposals for additional facilities. The industry’s growing electricity demands have become a frequent topic of discussion among local residents, utility regulators and elected officials as energy consumption and infrastructure needs continue to expand.

Amid the growing use of artificial intelligence, corporations and technology companies continue to expand data center operations, increasing electricity demand and placing additional pressure on the power grid. Supporters of the legislation argue that the costs associated with connecting new data centers to the grid are too often borne by consumers through higher utility bills.

“Virginia is the data center capital of the world, and new data center proposals are popping up all the time across the Commonwealth. If corporations are going to run data centers in Virginia, they should cover the cost of them. I’m proud to support the Power for the People Act to ensure that huge corporations are not pawning off costs to working Americans,” Warner said.
According to information released by Warner’s office, consumers served by the PJM Interconnection electric grid, which includes Virginia and portions of 12 other states and the District of Columbia, have paid or are expected to pay more than $21 billion in capacity costs in the last three capacity auctions because of projected data center demand.

The release further states that by 2028, the average household in the PJM region could see energy bills increase by approximately $70 per month due to rising capacity costs associated with growing electricity demand.

There are currently 603 data centers in Virginia and more than 3,700 nationwide, according to figures cited by Warner’s office.

Supporters of the bill contend that data centers increase consumer costs in two primary ways—by increasing overall electricity demand, which can drive up prices, and by requiring expansions to the electric grid, the costs of which are often distributed among all electricity customers.

The legislation would direct states to evaluate the creation of utility rate classes specifically for data centers, require greater accountability for transmission upgrades associated with data center development, encourage data centers to bring additional power generation and battery storage resources online, and improve forecasting of future energy demand.

The bill has attracted support from a coalition of consumer advocacy and utility watchdog organizations.

“It’s unconscionable that people’s utility rates are rising because of data centers being built by billion dollar companies to fuel their AI products,” said Ben Winters, Director of AI and Privacy at the Consumer Federation of America. “This bill is a critical step in remedying this injustice that brings the very real issues of affordability and Big Tech abuse to the forefront.”

“The Power for the People Act helps shield families from unfair and unaffordable data center subsidization on their electric bills,” said Olivia Wein, Senior Attorney at the National Consumer Law Center. “It is outrageous that households are stuck paying billions of dollars to energy companies for costs that should be borne by data centers. The added expense is particularly harmful for low-income households who already face impossible choices between paying the monthly electric bill and paying for food, medicine, and rent.”

“The way we currently regulate electricity doesn’t work for the city-sized power demands of data centers. The Power for the People Act modernizes regulation to protect residential customers from subsidizing wealthy data centers, saving residential customers in Maryland and across the country from paying billions of dollars in electricity costs to support data center growth,” said Maryland People’s Counsel David S. Lapp.

“Across the country, the rapid growth of data centers is the number one threat to affordable electricity—energy costs will continue to hit record highs if we don’t act now. The Power for the People Act would hold data centers accountable for their impact on the grid, helping ensure reliability and affordability for everyone,” said Sarah Moskowitz, Executive Director at the Citizens Utility Board of Illinois. “These companies are among the wealthiest in the world, and it is simply unacceptable for everyday consumers to foot the bill for their energy guzzling. The Power for the People Act would rein these companies in and help restore balance to our energy system.”

The legislation is sponsored by Sen. Chris Van Hollen (D-Md.) and co-sponsored by Warner and several other Democratic senators, including Dick Durbin of Illinois, Richard Blumenthal of Connecticut, Cory Booker of New Jersey, Tammy Duckworth of Illinois, Tina Smith of Minnesota, Peter Welch of Vermont and Angela Alsobrooks of Maryland.

The Power for the People Act has been endorsed by the Consumer Federation of America, National Consumer Law Center, Public Citizen, Natural Resources Defense Council, Union of Concerned Scientists and several state consumer advocacy organizations.