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Data Centers Must Fund Grid Interconnections

Full Title:
Power for the People Act of 2026

Summary#

This bill directs federal and state energy authorities to treat large data centers as a distinct class of electricity customers. It requires grid operators to create “data center load queues” that can delay or deny new interconnections unless data centers meet specified requirements. It also pushes states to consider data center–specific electricity rates and makes data centers pay certain local transmission and interconnection costs.

  • Main change: The Federal Energy Regulatory Commission (FERC) must require covered grid operators to create data center load queues and rules that prioritize data centers that bring their own low- or no‑carbon generation, batteries, or agreed load flexibility.
  • Rate changes: Public utilities must file tariffs to allocate local transmission upgrade costs to the interconnecting data center, and states must consider creating data center–specific rate classes with options like minimum demand charges, longer contract terms, higher study deposits, and contribution-in-aid-of-construction (CIAC).
  • Labor and clean-energy conditions: Data centers that get priority must meet labor standards (prevailing wages, registered apprentices) and agree to labor peace or project labor agreements for new energy resources.
  • Deadlines and requirements: FERC rule within 180 days, state consideration and determinations within 1–2 years, and the Secretary of Energy to provide forecasting help and transparency rules within 180 days.
  • Interconnection bar: After the final FERC rule takes effect, new data centers cannot interconnect unless they have fully moved through the new data center load queue.

What it means for you#

  • Data center owners and operators

    • Must pass through a new data center load queue to interconnect. This could include delays or denial if the grid operator finds risks to reliability or affordability.
    • To get priority, they likely must bring and pay for new, deliverable, low- or no‑carbon generation or qualifying battery storage sized to serve their load (or use approved load‑flexibility agreements).
    • Must meet labor-related requirements for construction and new supply resources (prevailing wages, use of registered apprentices) and use labor peace agreements for operation and maintenance.
    • Will be responsible for local transmission upgrade costs that would not be needed but for their project. States may require higher upfront interconnection study costs, deposits, and minimum demand charges.

  • Utilities, ISOs, RTOs, and transmitting utilities

    • Must create and manage data center–specific load queues and implement FERC’s standards and transparency rules.
    • Must file tariff amendments to charge data centers for local transmission upgrades and adjust rate classes as appropriate.
    • Will need to track and share more information about data center interconnection requests to improve forecasting.

  • State public utility commissions

    • Must consider establishing data center–specific rate classes and complete the consideration within set timeframes (start within 1 year, decide within 2 years unless the State already acted).
    • Can adopt features such as minimum demand charges, longer contract lengths, ramping limits, clean transition tariffs, or CIAC requirements.

  • Residential and business electricity customers (ratepayers)

    • The bill is aimed at preventing ratepayers from subsidizing local grid upgrades or extra capacity needed to serve data centers. This could reduce the chance that broader customer bills cover those specific costs.
    • Practical effects on retail bills are not specified and would depend on state and utility decisions.

  • Labor and construction workers

    • Construction and operation of new data-center energy resources would be subject to prevailing wage rules and apprenticeship requirements, potentially creating more unionized and registered-apprenticeship jobs on covered projects.

  • Entities that mine cryptocurrencies

    • The bill defines such facilities separately and excludes them from the “organic load growth” category, but it does not clearly state how many of the data center–specific rules apply to them. This is unclear.

Expenses#

No public dollar estimates are attached to the bill text.

  • Government costs: The bill authorizes the Secretary of Energy to provide grants and technical assistance and authorizes “such sums as are necessary” for some programs. No specific budget amounts or fiscal notes are provided.
    No publicly available information.
  • Costs to data centers and developers: The bill requires data centers to pay for local transmission upgrades assigned to them, to contract for dedicated generation or storage if they want priority, and to make larger interconnection deposits or CIAC payments if states adopt those options. These are private costs for the project owners.
  • Costs to utilities and grid operators: Likely increased administrative and planning costs to create and run specialized load queues, to implement transparency and forecasting requirements, and to file new tariffs.
  • Potential ratepayer savings: The bill aims to avoid ratepayer-funded local upgrade costs, but the exact savings are not estimated.

Proponents' View#

The bill appears intended to address several concerns stated in its findings and provisions:

  • It appears intended to prevent households and small businesses from subsidizing the grid costs driven by very large data centers.
  • It seeks to protect grid reliability by giving grid operators the tools to delay or deny interconnection when data center load would threaten reliability or affordability for others.
  • It encourages data centers to bring dedicated low- or no‑carbon generation, batteries, or flexible demand to reduce strain on the grid and lower emissions.
  • It promotes job and wage standards (prevailing wages, apprenticeships, labor peace agreements) tied to new energy supply for data centers.
  • It aims to improve forecasting and transparency about data center interconnection requests so planners can make better long-term decisions.

Opponents' View#

The bill’s text raises several possible concerns and trade-offs:

  • One concern is that requiring data centers to secure and pay for dedicated generation, batteries, or higher interconnection costs could raise project costs, slow new data center development, or shift investment decisions away from some locations.
  • The bill allows grid operators to delay or deny interconnection; this could create uncertainty and longer timelines for projects if queue rules are strict or unclear.
  • Implementation details are left to FERC, states, and utilities (for example, how to measure carbon intensity, how to size required generation or storage, and how to run qualifying load flexibility agreements), so there may be legal and administrative complexity and inconsistent application across regions.
  • The bill requires states to “consider” but not to adopt rate classes; this could produce varied outcomes and a patchwork of rules across states.
  • Labor and apprenticeship requirements increase project labor costs, which proponents see as benefits but developers may see as added expense and complexity.
  • It is unclear how the bill treats cryptocurrency-mining facilities in practice; the bill defines them but does not fully specify how the load-queue and rate-class rules apply, leaving uncertainty for those operators.