Van Hollen Leads New Bill to Ensure Americans Aren’t Footing the Bill for Big Data Centers

Today, U.S. Senator Chris Van Hollen (D-Md.) announced his introduction of the Power for the People Act, legislation to rein in the rising electricity costs Americans are facing by addressing the huge amounts of energy required by data centers.

Amid the growing use of artificial intelligence (AI), corporations and big technology companies' build out of data centers has exploded in the past decade and is projected to continue to rapidly increase. As more and more data centers aim to connect to the power grid, consumers are footing the bill for the infrastructure required to bring them online. Because data centers use so much power, they are also increasing energy demand which is further driving up electricity prices and placing a heavy burden on our electric grid - raising the risk of reliability issues such as blackouts. The Power to the People Act holds data center operators accountable for their role in driving up energy prices through reforms that would prevent consumers from subsidizing data center development through their utility bills. It also ensures that data centers connecting to the grid do not overwhelm it, preventing grid reliability issues that result in power outages, and ensuring that all of this work is done with strong labor standards in place, creating good-paying jobs.

Joining Senator Van Hollen as cosponsors of this legislation are Senators Dick Durbin (D-Ill.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Tammy Duckworth (D-Ill.), Tina Smith (D-Minn.), Peter Welch (D-Vt.), and Angela Alsobrooks (D-Md.).

"Americans are already struggling to make ends meet - they shouldn't have to foot the bill for big corporations' massive expansion of data centers. But right now, the richest corporations on the planet are constructing new data centers at working families' expense - driving up monthly electricity bills for consumers. The principle behind this legislation is simple: the huge corporations building and running data centers should cover the costs of the energy they need - not push those costs onto the backs of consumers," said Senator Van Hollen.

In the mid-Atlantic grid region (PJM), the nation's largest electric grid serving 67 million Americans in 13 states - including Maryland - and Washington, D.C., because of data centers, consumers have paid or will pay:

• As least $4.6 billion in 2024 and $3.1 billion in 2025 for local transmission upgrades, or $7.7 billion total for local transmission upgrades over two years according to Union of Concerned Scientists.
• Over $21 billion in capacity costs in the last three capacity auctions (July 2024, July 2025, and December 2025) alone (which are the costs to secure available energy supply for future years) due to projected data center demand. These costs were to secure supply for the period of June 2025 - May 2028, according to PJM's Independent Market Monitor.
• By 2028, the average household in PJM will see their energy bills increase by $70 per month because of data centers - that's $840 per year - and that's just due to rising capacity costs (not even taking into account all the other factors impacting energy bills like the price of wholesale energy and transmission costs). Capacity costs alone could balloon to $163 billion through 2033 if no action is taken to address the imbalance of supply and demand in PJM's capacity market, according to NRDC.

The Power for the People Act is supported by: The Consumer Federation of America, National Consumer Law Center, Public Citizen, Maryland People's Counsel, Illinois Citizens Utility Board, New Jersey Division of the Rate Counsel, Oregon Citizens Utility Board, Delaware Division of the Public Advocate, NRDC, and Union of Concerned Scientists.

Additional background on the Power for the People Act

Data centers are huge energy consumers. In 2024, the average size of a proposed data center in the US was 300 megawatts, which is as much energy as it takes to power around 240,000 homes. There are currently over 3,700 data centers in the U.S. with new facilities being proposed every day. Although they are not the only factor causing electricity prices to rise, it is clear that new data center energy demand is having a significant and growing impact on Americans' utility bills.

The enormous energy needs of data centers push costs for consumers higher in two ways: 1) they increase overall electricity demand, outpacing available electricity supply - resulting in higher utility bills across the grid and windfall profits for power generators; and 2) they require expansions of the electric grid and the cost of these infrastructure upgrades are passed onto all electricity customers - not just the new data centers.

What's more, the rapid influx of data center energy demand combined with power supply constraints is pushing electric grids across the country dangerously close to their limits, which increases the risk of blackouts.

To address these affordability and reliability issues, the Power for the People Act:

• Ensures data centers are paying for the energy costs they cause by:
  • Directing states to evaluate the need for new rate classes specifically for data centers to more effectively assign costs caused by that customer class, while providing technical support to states to support this process.
  • Directing the Federal Energy Regulatory Commission (FERC) to issue a rule to ensure data centers are paying for the local transmission upgrades that would not be needed if the new data center did not exist - increasing accountability in local transmission projects which often lack oversight.

• Creates a system to manage data center interconnection to the grid that would protect affordability and grid reliability by incentivizing data centers to:
  • Offset their impact on the electric grid by bringing their own new and additional power generation and battery storage systems to the grid, as well as by agreeing to certain flexibility requirements.
  • Mitigate pollution by using clean energy resources.
  • Create good paying jobs with strong labor standards by paying locally prevailing wage, and using registered apprenticeship programs.

• Provides resources to improve data center load forecasting, including weeding out duplicative or speculative requests, as accurate data center energy demand projections are key to ensuring proper investment in the grid and preventing overly inflated energy bills.

The text of the Power for the People Act is available here.

"As data centers continue to grow and burden our electrical grids, consumers are forced to bankroll skyrocketing electricity costs, leaving them with soaring utility prices. This bill represents an important opportunity to hold data centers accountable for increased energy prices," said Senator Blumenthal.

"For the United States to lead responsibly in AI, the benefits must be broadly shared, and the costs-especially higher electricity prices-must not be shifted onto working families in places like New Jersey that are seeing spiking utility bills," said Senator Booker. "The Power for the People Act is about fairness and shared progress: it ensures data centers pay for the costs of their own development, prioritizes the clean energy critical to protecting our public health, protects consumers from rising electricity bills, strengthens grid reliability, and keeps America at the cutting edge of innovation."

"The American people are already struggling to keep up with the rising costs of groceries, housing, health care and more-the last thing they need is to foot the bill for data center energy costs," said Senator Duckworth. "This commonsense bill would help ensure that data centers don't pass along their operating costs to Americans' monthly energy bills or jeopardize the grid-while also supporting the development and improvement of data centers across the country."

"The data centers behind the AI boom are consuming more energy than ever before-that demand is only expected to grow. At the same time, energy prices are spiking across the country, saddling working families with higher utility bills and threatening the reliability of the grid. Data centers must be held accountable for the costs of their connection," said Senator Welch. "We cannot force everyday Americans to subsidize profits of the multi-billion dollar AI industry."

"Marylanders are struggling to get by - the costs of groceries, rent, and health care are skyrocketing. That's why it is absolutely essential that data centers cover the costs of increased energy prices they are creating: not hardworking American families. Data centers are critical to our national security, job creation, and economic development, but we cannot subsidize the costs of these data centers with our energy bills - which are already way too high," said Senator Alsobrooks.

"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 Power for the People Act takes a balanced approach. It holds data centers accountable for their impact on the grid while providing them with tools to manage their energy needs," said Brian Lipman, Director for the New Jersey Division of Rate Counsel. "Without this legislation, residential customers will be unprotected from higher rates and potential blackouts and brownouts at peak times - during the hottest summer days and coldest winter nights. We must protect customers from these risks, while enabling data centers to plan responsibly. This bill is an important first step toward that goal."

"Oregon is becoming a top destination for data center growth in the country and we have seen that growth in home power bills rising by more than 50% in five years," said Bob Jenks, Executive Director of Oregon Citizens' Utility Board. "This federal legislation would allow us to go further than state policy allows, supporting more affordable energy bills for American families."

"Data centers are transforming the energy sector at a speed and a scale unlike anything in decades, increasing electricity costs for worse reliability at a time when families can least afford spiking costs. Individual data centers can have the energy needs of cities, impacting the energy system and the communities around them. Collectively, the explosive growth in data centers is worsening the reliability of our energy system and imposing enormous costs - expensive transmission upgrades, rapidly increasing capacity prices, increasing energy prices - that will be paid by electricity customers. We must ensure that the economic opportunities that data centers provide for some does not come at the expense of everyone else," said Jameson Tweedie, Public Advocate for the State of Delaware. "The Power for the People Act helps do just that, protecting the reliability of our energy system by ensuring new power generation is built to match the power demands of data centers, while requiring data centers to pay for the costs they impose on the system to protect existing customers."

"Congress needs to step in and make sure utility customers don't get stuck with the bill for the data center construction boom, or the increased pollution that boom will cause if those companies don't bring their own new, clean energy. This commonsense legislation will hold data centers accountable and make sure they are paying the real costs for all the power they are using. Power for the People is an important step in the right direction, and Congress should act on it pronto," said Jackson Morris, Director, State Power Sector at the Natural Resources Defense Council.

"We applaud Senator Van Hollen for stepping forward to address the critical grid reliability and consumer cost issues associated with the build-out of data centers. The Power for the People Act pushes direct fixes to the regulatory shortcomings that leave consumers on the hook for data centers' transmission upgrade costs, emphasizes the need to ensure reliable service, and prioritizes clean energy solutions to meet growing data center demand. UCS encourages Congress to move swiftly to consider the Power for the People Act and ensure the data center boom does not threaten electricity reliability or affordability," said Mike Jacobs, Senior Energy Manager at Union of Concerned Scientists.

"This legislation answers an urgent challenge: how to grow the economy while insulating mom & pop retail customers from rising electric bills caused by data centers. It modernizes our electric sector's approach to this new part of the economy, creating an orderly process for connecting data centers and ensuring that data centers are flexible and clean. These are necessary steps to address rapidly rising bills and ensure that data centers pay their fair share," said Abe Silverman, Assistant Research Scholar at the Ralph O'Connor Sustainable Energy Institute, Johns Hopkins University.

"This timely and comprehensive legislation provides a clear path for data center development, securing new economic growth while implementing crucial safeguards that protect the affordability and reliability of electricity for average residential and small customers," said Suzanne Glatz, Principal Consultant at Glatz Energy Consulting and previously Director, Strategic Initiatives & Interregional Planning at PJM Interconnection.