Summary#
H.R. 10809, the Make Data Centers Pay Act, would amend the Federal Power Act by adding rules for electric service to certain large data centers and high-density computing facilities. Its stated goal is to protect other customers from costs tied to those facilities; it has been introduced and referred to committee, so it is not law.
- The rules would cover a facility or commonly owned or controlled group using at least 20 megawatts of electricity, including phased projects expected to reach that level. Certain computing equipment that is secondary to another commercial or industrial activity is excluded.
- Electric utilities would have to set rates or service agreements to recover the full incremental cost of serving a covered load. That includes associated generation, storage, transmission, and distribution costs, as estimated by the utility around when the load becomes operational and subject to approval by the Federal Energy Regulatory Commission (FERC) or a state authority, as appropriate.
- Utilities would have to require financial assurances or contributions sufficient to cover a necessary new facility or upgrade before building it. Payments or assurances already provided for that same work would count toward this requirement.
- Covered loads would remain responsible for unrecovered incremental costs even if they stop buying electricity or end their service contract early.
- Other customers could not be charged for any portion of a covered load’s incremental costs. FERC or a state authority could still allow charges above those costs, with the extra credited to other customers.
- The rules would apply to covered loads that connect on or after the bill becomes law. Arrangements approved before then would remain in effect.
What it means for you#
- Large data centers and computing facilities: If covered, they would have to bear the incremental costs of serving their electricity load and provide financial assurances or contributions for necessary facilities or upgrades. The bill does not require every covered load to build its own power supply.
- Electric utilities: They would have to require the financial assurances or contributions and design service rates or agreements for full recovery of incremental costs, including after a covered load leaves.
- Other electricity customers: Their rates could not include a covered load’s incremental costs. The bill permits, but does not require, regulators to charge covered loads more than those costs and pass the excess benefit to other customers.
- Customers with existing arrangements: An arrangement approved by FERC or a state before enactment would remain in effect. The bill does not directly change those approved arrangements.
Money#
No publicly available information gives an estimate of public spending or the bill’s effect on electricity bills.
- The bill requires utilities to seek financial assurances or contributions for necessary facilities and upgrades, but does not estimate their amount.
- It does not set a fee, tax, fine, or appropriation.
- Any surplus collected from covered loads may be credited to other customers; the bill does not require a surplus charge.
What is unclear#
- The bill does not set a detailed method for deciding which costs are incremental or how costs should be shared when facilities serve more than one purpose or customer.
- It does not spell out how FERC or state approval would work, or set timelines, appeals, reporting, or enforcement procedures.
- It does not say how much assurance a utility must require in different circumstances, or how an assurance would be handled if the project changes or does not proceed.
- The bill uses “electric utility.” The supplied material does not include the rest of the Federal Power Act, so it is not possible to verify whether that term is defined there or how the amendment would interact with current law.
Case for#
- A possible argument for the bill is that other customers should not pay for power-system costs caused by a very large new electricity load.
- Requiring financial assurances before construction could reduce the risk that customers are left with costs for facilities built to serve a covered load.
- Keeping responsibility for unrecovered costs after a covered load exits could protect customers from paying for infrastructure that remains after the customer leaves.
- Allowing regulators to credit surplus payments to other customers could provide an additional way to reduce customer costs.
Case against#
- One concern is that “incremental cost” and the bill’s timing for estimating it may leave room for disagreement about which costs a covered load must pay.
- The bill does not provide detailed rules for setting financial assurances or resolving disputes, which could make outcomes less predictable for utilities and covered facilities.
- Requiring large assurances or full cost recovery could raise the cost of building or operating covered facilities. The bill provides no estimate of that effect.
- Existing arrangements approved before enactment are exempt from the new rules, so the protections would not apply equally to all covered loads.