US House Approves Bill Shifting Grid Upgrade Costs to Large AI Data Centers

The U.S. House of Representatives passed H.R. 9340, the Ratepayer Protection Act, which would require data centers with at least 100 megawatts of capacity to cover the full incremental cost of electricity grid upgrades needed to serve them. The bill amends the 1978 Public Utility Regulatory Policies Act and directs state regulators and non-regulated utilities to consider adopting the federal standard within two years if it becomes law. The measure aligns with a pledge previously sought from AI hyperscalers and utilities to prevent residential rate hikes.

The Ratepayer Protection Act amends the 1978 Public Utility Regulatory Policies Act, establishing a federal standard that large-load customers—defined as data centers drawing 100 megawatts or more—must absorb the complete incremental expense of generation, transmission, or distribution upgrades required to serve them. This obligation persists even if the customer terminates its utility agreement. State regulators and non-regulated utilities would have two years to decide whether to adopt the standard once the bill becomes law.

Oregon has already enacted stricter measures through its 2025 POWER Act, applying a 20-megawatt threshold that produced a 30% increase in data center electricity costs while residential rates dropped 1.3%. Virginia similarly moved after its governor signed the Ratepayer Protection Pledge in July 2026, with its State Corporation Commission now requiring data centers to fund all necessary transmission infrastructure. The bill now awaits Senate consideration and presidential approval.