Data Centers and the Electricity Grid: Frequently Asked Questions
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Data Centers and the Electricity Grid:
Frequently Asked Questions
September 1, 2026
Congressional Research Service
https://crsreports.congress.gov
R49326
SUMMARY
Data Centers and the Electricity Grid:
Frequently Asked Questions
A data center is a physical facility that houses computer systems for managing and transmitting
data. The federal government has been pursuing policies to promote data center development,
particularly as a primary component of artificial intelligence (AI), a “critical and emerging
technology” with enormous data storage and processing requirements. Data centers require large
quantities of electrical power. To date, data centers have generally secured power from their local
electric utilities, utilizing existing transmission and distribution infrastructure (i.e., the grid).
Many observers anticipate a need for new power plants and grid infrastructure to meet the needs
of data centers in addition to other growing sources of electricity demand. The anticipated pace
of U.S. electricity demand growth exceeds that of the last 20 years, raising questions of whether
existing regulatory requirements and processes are suited for such development.
R49326
September 1, 2026
Ashley J. Lawson
Specialist in Energy Policy
Paul W. Parfomak
Specialist in Energy Policy
Martin C. Offutt
Analyst in Energy Policy
Congress has an ongoing interest in the development of data centers, generally, and their impacts
on the electricity grid, specifically. Hearings in the 119th Congress have examined data center and grid-related issues.
Ensuring data centers do not raise costs or affect grid reliability for other electricity consumers, especially residential
consumers, has been a focus of legislative activity in the 119th Congress. This report discusses frequently asked questions
about data center electricity use, the potential impacts of data center growth on the electric grid, and government actions
related to data center development. This report is intended as an introduction to data center electricity issues and does not
provide in-depth coverage of all data-center- and electric-grid-related issues. CRS has several other published products that
may be helpful in further examining specific data-center-related energy policy issues.
Congressional Research Service
Data Centers and the Electricity Grid: Frequently Asked Questions
Contents
Introduction ..................................................................................................................................... 1
Frequently Asked Questions ............................................................................................................ 1
What are data centers and how do they use electric power? ..................................................... 1
What is the electricity grid and how is it regulated? ................................................................. 2
How do data centers get their electric power? .......................................................................... 4
How much electric power will data centers need? .................................................................... 5
What types of electricity generation are preferred for data centers? ......................................... 6
What is the federal role in permitting electricity infrastructure for data centers? ..................... 7
What are the requirements for interconnecting power plants to the grid? ................................ 7
What is data center flexibility and how does it affect the grid? ................................................ 8
Can data centers provide benefits to the grid? .......................................................................... 9
How have data centers affected electricity prices? ................................................................. 10
Where is data center growth happening? ................................................................................. 11
Can data centers cause blackouts? .......................................................................................... 12
What has the federal government been doing about data centers and the grid?...................... 13
What have states been doing about data centers and the grid? ............................................... 14
What has Congress been doing about data centers and the grid? ............................................ 15
Additional Resources .................................................................................................................... 16
Figures
Figure 1. Regional Transmission Organizations and Independent System Operators ..................... 3
Figure 2. Standalone Data Center Electricity Use by State in 2024 ............................................... 11
Figure 3. Projected Standalone Data Center Electricity Use by State in 2030 .............................. 12
Contacts
Author Information........................................................................................................................ 17
Congressional Research Service
Data Centers and the Electricity Grid: Frequently Asked Questions
Introduction
A data center is a physical facility that houses computer systems for managing and transmitting
data. The federal government has been pursuing policies to promote data center development,
particularly as a primary component of artificial intelligence (AI), a “critical and emerging
technology” with enormous data storage and processing requirements.1 Data centers require large
quantities of electrical power. To date, data centers have generally secured power from their local
electric utilities. Reportedly, some utilities are experiencing infrastructure constraints and cannot
accommodate new data center requests until new grid infrastructure—power plants, transmission
facilities, and distribution facilities—is built. Typically, building grid infrastructure takes several
years longer than building data centers. Many observers in the technology industry and their
supporters, including the Trump Administration, see grid infrastructure constraints as a hurdle to
U.S. competitiveness in new technologies like AI.2
Opposition has been growing, especially at the local level, to construction of new data centers. A
key point of debate is the need for new grid infrastructure and whether this buildout might lead to
higher electricity prices for other customers. This report addresses frequently asked questions
about data center electricity use, the potential impacts of data center growth on electricity prices
and grid reliability, and government actions related to data center development.
Frequently Asked Questions
What are data centers and how do they use electric power?
A data center is a physical facility housing computer servers, data storage devices, and network
equipment that can provide information technology (IT) infrastructure services for storing,
managing, processing, and transmitting large amounts of data.3 Different types of data centers are
based on their ownership or intended purposes. For example, a large company may choose to
build an on-premises data center to house and manage its own IT infrastructure.4 Other, typically
smaller, organizations often choose to rent space, equipment, or services within a colocation data
center owned and operated by another company.5
The increasing demand for data storage and processing capacities, especially for computational
tasks such as AI deployment, has led to the development of “hyperscale” data centers notable for
their size.6 Hyperscale data centers contain at least 5,000 computer servers and occupy at least
1 National Science and Technology Council, Critical and Emerging Technologies List Update, February 2024,
https://www.govinfo.gov/content/pkg/CMR-PREX23-00185928/pdf/CMR-PREX23-00185928.pdf. The report states
that “[c]ritical and emerging technologies (CETs) are a subset of advanced technologies that are potentially significant
to U.S. national security” and lists artificial intelligence (AI) among CETs. See pages 1-2.
2 See, for example, remarks of Secretary of Energy Chris Wright to attendees of the Special Competitive Studies
Project’s AI Expo, at C-SPAN, “Energy Secy. Wright Warns Failure to Overhaul Electric Grid System Could Slow
Down AI,” May 7, 2026, https://www.c-span.org/clip/public-affairs-event/energy-secy-wright-warns-failure-tooverhaul-electric-grid-system-could-slow-down-ai/5199999.
3 For more discussion on data centers and their role in AI development and deployment, see CRS In Focus IF12899,
Data Centers and Cloud Computing: Information Technology Infrastructure for Artificial Intelligence, by Ling Zhu.
4 Equinix, “What Is a Data Center? What Are Different Types of Data Centers?,” August 1, 2024,
https://blog.equinix.com/blog/2022/10/13/what-is-a-data-center-what-are-different-types-of-data-centers/.
5 Stephanie Susnjara and Ian Smalley, “What Is a Data Center?,” IBM, https://www.ibm.com/think/topics/data-centers.
6 Phill Powell and Ian Smalley, “What Is a Hyperscale Data Center?,” IBM, https://www.ibm.com/think/topics/
hyperscale-data-center.
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Data Centers and the Electricity Grid: Frequently Asked Questions
10,000 square feet of physical space, although they can be much larger—some occupying a
million square feet or more.7
Data centers use electricity to run their computers and the systems that cool them. Roughly half
of data center electricity demand stems directly from operating electronic IT equipment.8 Because
IT equipment generates heat as it operates, data centers require extensive cooling systems to
maintain IT system stability and performance. These cooling systems typically account for
another 40% of electricity consumption in a data center.9 Lighting, security systems, power
distribution losses, and other facility systems account for the rest of data center electricity
demand.
What is the electricity grid and how is it regulated?
Electricity grid is a term commonly used to refer to the U.S. electricity system. The grid is made
up of three distinct but interrelated systems for generation, transmission, and distribution of
electricity.10 The generation system consists of the power plants that generate electricity using a
variety of energy sources across the country. The transmission system consists of high-voltage
(rated above 100 kilovolts) power lines and associated equipment that move power across long
distances. The distribution system consists of low-voltage power lines and associated equipment
that makes final delivery of electricity to most homes and businesses.
In the early 1900s, the states passed laws granting monopoly franchises to electric utilities such
that only a single utility could sell electricity in a defined service territory. Under this regulatory
compact, the utilities must have their rates approved by a state regulator and they must provide
universal service.
Originally, most utilities were vertically integrated—that is, they owned and operated all the
generation, transmission, and distribution infrastructure required to serve their customers. Due to
state and federal policy changes late in the 20th century, in many parts of the United States, the
electricity industry has transitioned (restructured) to a business model in which power generation
is competitive. Even when companies compete for generation, the transmission and distribution
functions remain primarily operated by monopoly utilities regulated by state or local regulators.
In regions with restructured electricity industries, competitive markets largely set the wholesale
price of power.
The U.S. electricity market regions are shown in Figure 1. The markets are composed of regional
transmission organization (RTO) and independent system operator (ISO) areas, each serving
multiple, interconnected utility service territories. PJM is the nation’s largest electric grid
operator, managing the electricity transmission system for more than 65 million people in all or
7 Powell and Smalley, “What Is a Hyperscale Data Center?”; VIAVI Solutions, “What Is a Hyperscaler?,”
https://www.viavisolutions.com/en-us/what-hyperscaler.
8 A. Shehabi et al., 2024 United States Data Center Energy Usage Report, Lawrence Berkeley National Laboratory
(LBNL), LBNL-2001637, December 2024, p. 47.
9 Karthik Ramachandran et al., “As Generative AI Asks for More Power, Data Centers Seek More Reliable, Cleaner
Energy Solution,” Deloitte, November 9, 2024, https://www.deloitte.com/us/en/insights/industry/technology/
technology-media-and-telecom-predictions/2025/genai-power-consumption-creates-need-for-more-sustainable-datacenters.html.
10 For additional discussion, see CRS Report R47521, Electricity: Overview and Issues for Congress, by Ashley J.
Lawson.
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Data Centers and the Electricity Grid: Frequently Asked Questions
part of 13 states and the District of Columbia.11 What consumers ultimately pay for electricity is
based on auctions among competing generators bidding to provide electricity in these markets.
Figure 1. Regional Transmission Organizations and Independent System Operators
Source: Federal Energy Regulatory Commission (FERC), “RTOs and ISOs,” https://www.ferc.gov/power-salesand-markets/rtos-and-isos.
Notes: FERC does not regulate the electricity industry in Alaska, Hawaii, or U.S. territories. CAISO = California
Independent System Operator; SPP = Southwest Power Pool; ERCOT = Electric Reliability Council of Texas;
MISO = Midcontinent Independent System Operator; PJM = PJM Interconnection; NYISO = New York
Independent System Operator; ISO-NE = ISO New England. Regional transmission organizations and
independent system operators do not operate electricity systems in the Northwest, Southwest, or Southeast.
RTO and ISO rules are under Federal Energy Regulatory Commission (FERC) jurisdiction,
except for the Electric Reliability Council of Texas (ERCOT).12 Wholesale rates for electricity
transmission are set by FERC and are generally directly passed through into retail rates. The retail
rate consumers pay is the sum of wholesale generation costs plus transmission and distribution
costs, and any other costs approved by the state or local utility regulator (e.g., costs associated
with low-income bill assistance or environmental programs). While FERC is largely responsible
for regulation of the interstate transmission system and wholesale power markets, regulation of
the distribution function of the electric power business is still largely carried out by state or local
authorities.
11 For more details about PJM, see CRS Report R48553, PJM’s Electric Capacity Market: Background and Current
Issues, by Ashley J. Lawson. The PJM states are Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New
Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia, plus the District of Columbia.
12 Pursuant to the Federal Power Act, the Federal Energy Regulatory Commission (FERC) has authority over wholesale
electricity transactions in interstate commerce. The transmission system throughout most of Texas does not exchange
electricity with neighboring states, so FERC’s authority does not extend to that region. For additional discussion on
FERC’s authority over electricity rates, see CRS In Focus IF11411, The Legal Framework of the Federal Power Act,
by Adam Vann, and CRS Report R48349, The Federal Energy Regulatory Commission (FERC): Authorities and
Membership, by Paul W. Parfomak.
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How do data centers get their electric power?
Data centers have three main options for getting electric power. First, they can buy electricity
directly from the local utility; this is the most common scenario. A data center that purchases
from the local utility receives the same electricity as other retail customers, sourced from the
same mix of power plants and carried on the local utility’s power lines. Buying electricity from
the local utility is the preferred option for most data center developers and is expected to remain
so for the foreseeable future.13 Data center owners who prefer this option typically choose to
locate their facilities in areas with more readily available existing utility electricity supply.
A second option for a data center developer is to enter into a power purchase agreement (PPA)
with a specific power plant. The power plant may be located near the data center or far from it. In
either case, the power plant delivers electricity onto the grid, and (in a separate transaction) the
data center receives electricity from the grid. PPAs can also include terms for the acquisition of
the renewable attributes of the power plant, where applicable.14 Some data center owners or users
procure these renewable attributes as part of their corporate sustainability goals.15
A third option for data center developers is to self-supply electricity by buying or building
behind-the-meter power plants, also referred to as behind-the-meter generation.16 This
arrangement is sometimes called “bring your own power” (BYOP) or “bring your own
generation” (BYOG). In this case, the electricity generated by the power plant is delivered
directly to the data center without using the utility’s electric grid.17 Such power plants may be
colocated with the data center on the same site, or they may be offsite adjacent to the data center,
connecting to them via dedicated power lines. Some behind-the-meter power plants can be
configured in such a way that allows electricity to flow back to the grid. This configuration could
allow data centers to sell electricity to the local utility when the electricity is not needed for data
center operations; to support utility grid reliability; or to supply electricity in the event of a utility
electricity shortage. Behind-the-meter power plants may be owned and operated by the data
center itself or by a third party.
Which electricity supply option best meets the electricity needs of an individual data center
depends on several considerations, including the availability of grid power from the local utility,
whether the data center developer prefers a specific energy source to make the electricity, and
13 Michael Thomas, “Bypassing the Grid: How Data Center Developers Are Building Their Own Power Plants,”
Cleanview, https://cleanview.co/reports/behind-the-meter-data-centers. Based on a proprietary database of announced
data centers, the analysis found that only 25% of the planned data center capacity intended to use behind-the-meter
power sources. The analysis found that 2 gigawatts (GW) or 2.2% of the announced behind-the-meter power was
operational as of mid-2026.
14
An energy attribute conveys information about a unit of energy, including the resource used (e.g., solar power) to
create it and its associated emissions. For more details, see U.S. Environmental Protection Agency, “Energy Attribute
Certificates (EACs),” updated October 20, 2025, https://www.epa.gov/green-power-markets/energy-attributecertificates-eacs.
15 See, for example, Google, Environmental Report 2025, June 2025, p. 79, https://www.gstatic.com/gumdrop/
sustainability/google-2025-environmental-report.pdf. Google announced an “aim to run on 24/7 carbon-free energy on
every grid where we operate by 2030.”
16 Behind-the-meter is sometimes abbreviated in the industry as BTM.
17 Ian Fischer, “Behind-the-Meter Power Solutions: The Data Center Industry’s New Reality,” datacenterHawk,
February 19, 2026, https://datacenterhawk.com/resources/market-insights/behind-the-meter-power-solutions-the-datacenter-industry-s-new-reality.
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utility-specific requirements regarding behind-the-meter options. Reportedly, many data center
developers prefer to secure their electricity supplies in whatever way is fastest.18
The above discussion applies to the primary power source for data center operations. Data centers
also typically have backup generators on-site designed to operate in case of a grid outage. As is
the case for other electricity customers, any backup option is at the full expense of the data center
and is not operated by the utility. Whereas the primary power source for a data center might be
expected to run for most hours of the year, backup generation is expected to run a minimal
number of hours and primarily during emergency events.
How much electric power will data centers need?
Estimates of existing data center power demand vary, in part because comprehensive
consumption statistics are not available.19 Likewise, projections of future demand vary and are
uncertain, in large part due to uncertainty about future technology changes—both the adoption of
AI technology in the broader United States and the hardware and software used for AI and other
computational applications.
A 2026 Department of Energy (DOE) study examined the nationwide energy consumption of data
centers in response to direction by Congress in the Energy Act of 2020 (P.L. 116-260, Division Z,
Section 1003).20 The study found that U.S. data center annual electricity consumption in 2024
was approximately 4.7% of total U.S. consumption—192 terawatt-hours (TWh)—and was
projected to rise to 9.5%-15.3% of U.S. consumption by 2030, between 521 TWh and 843 TWh.21
A 2026 study by the Electric Power Research Institute (EPRI) projected data center electricity use
to rise to 9% to 17% of U.S. total electricity consumption in 2030, roughly 380 TWh to 790 TWh
according to their model.22 Other studies have projected similarly large growth in data sector
electricity demand.23
Some studies have suggested that current projections of future data center demand may be
overstated. One study, prepared for an environmental advocacy group, found “that data center
electricity demand projections remain highly uncertain and currently reflect a bias to
overestimating growth in the number of data centers that will be built, and therefore also
overestimating future electricity demand.”24 A May 2026 analysis from an investment bank found
18 Drew Robb, “Data Centers Bypassing the Grid to Obtain the Power They Need,” Data Center Knowledge, May 1,
2025, https://www.datacenterknowledge.com/energy-power-supply/data-centers-bypassing-the-grid-to-obtain-thepower-they-need.
19 See the section “Are there reports on the actual energy use of U.S. data centers?” in CRS Report R48646, Data
Centers and Their Energy Consumption: Frequently Asked Questions, by Martin C. Offutt et al.
20 Sarah Smith et al., United States Data Center Energy Usage Report: 2025 Update, LBNL, Energy Analysis Division,
June 2026, https://escholarship.org/content/qt33m6w3x0/qt33m6w3x0.pdf.
21 Smith et al., United States Data Center Energy Usage Report: 2025 Update, pp. 8-9. These estimates did not account
for cryptocurrency.
22 Electric Power Research Institute (EPRI), Powering Intelligence 2026: Updated Scenarios of U.S. Data Center
Electricity Use and Power Strategies, February 25, 2026, pp. 5-6, https://powering-intelligence.epri.com.
23 See, for example, International Energy Agency, Energy and AI, April 10, 2025, https://iea.blob.core.windows.net/
assets/de9dea13-b07d-42c5-a398-d1b3ae17d866/EnergyandAI.pdf; Alastair Green et al., “How Data Centers and the
Energy Sector Can Sate AI’s Hunger for Power,” McKinsey & Company, September 17, 2024,
https://www.mckinsey.com/industries/private-capital/our-insights/how-data-centers-and-the-energy-sector-can-sate-aishunger-for-power.
24 London Economics International LLC, Uncertainty and Upward Bias Are Inherent in Data Center Electricity
Demand Projections, prepared for Southern Environmental Law Center, July 7, 2025, p. 8, https://www.selc.org/wpcontent/uploads/2025/07/LEI-Data-Center-Final-Report-07072025-2.pdf.
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Data Centers and the Electricity Grid: Frequently Asked Questions
that “only about 50-60% of data center capacity scheduled for the next one to two years is
expected to come online on time amid delays and cancellations.”25 Other studies have projected
that even lower percentages of announced new data center capacity will be built.26 In May 2026,
the North American Electric Reliability Corporation (NERC) observed that grid operators in
many parts of the country revised their projections for electricity demand in the summer of 2026
downward, “to account for the observed rate of completion for large load interconnections and
the slower-than-expected pace at which some of those loads are coming on-line.”27 Despite these
lowered projections, NERC expected electricity demand at peak times to be 11 gigawatts (GW)
higher in 2026 than in 2025, largely due to data center demand growth.
What types of electricity generation are preferred for data centers?
Generation technologies being deployed for data centers via PPAs or behind-the-meter electricity
generation span fossil fuel-fired thermal power plants (e.g., natural gas turbines), renewable
generation (e.g., wind, solar, geothermal), nuclear power, fuel cells, and other types of energy
technology.28 There is no comprehensive, publicly available analysis of all generation projects for
existing and proposed data centers. However, an industry analysis based on limited data center
announcements and regulatory filings suggests that, where new on-site generation has been
proposed for data center projects, natural gas-fired turbines or engines have been the preferred
option, by far, followed by nuclear power and fuel cells.29 The extent to which these proposed
power plants will become operational remains to be seen.
In its 2026 Annual Energy Outlook, the U.S. Energy Information Administration (EIA) states that
“natural gas use for electric power generation by 2050 increases more than it does in any other
end-use sector,” largely due to data center expansion.30 Natural gas generation is reportedly
preferred because it is dispatchable and can be constructed relatively quickly—in one to three
years—depending on local permitting requirements and the availability of the required
equipment.31 Dispatchable generation can be turned on and off or otherwise adjusted whenever it
is needed to meet demand. Choosing natural gas for generation also depends on the availability of
adequate natural gas supplies through regional pipeline infrastructure or, in some cases, proximity
to natural gas production fields (e.g., the Permian Basin in Texas).32
25 Goldman Sachs, “US Data Center Power Demand Projected to Double by 2027,” May 20, 2026,
https://www.goldmansachs.com/insights/articles/us-data-center-power-demand-projected-to-double-by-2027.
26 See, for example, Gabriel Levin and Emily Forgash, “Most Power Sought for US Data Centers Will Never
Materialize, Analysts Say,” Bloomberg, August 12, 2026, https://www.bloomberg.com/news/articles/2026-08-12/mostelectricity-sought-for-ai-data-centers-in-us-will-never-materialize.
27 North American Electric Reliability Corporation (NERC), 2026 Summer Reliability Assessment, p. 1,
https://www.nerc.com/globalassets/our-work/assessments/nerc_sra_2026.pdf.
28 For examples of projects, see Table 1 in CRS Report R48762, Data Center Energy Infrastructure: Federal Permit
Requirements, by Paul W. Parfomak et al.
29
Data reported in Amy Harder, “The AI Boom Is Making Natural Gas Great Again,” Axios, February 4, 2026,
https://www.axios.com/2026/02/04/ai-natural-gas-power-data-centers, based on analysis (not publicly available) in
Michael Thomas, Bypassing the Grid: How Data Center Developers Are Building Their Own Power Plants,
Cleanview; an executive summary of Bypassing the Grid is available at https://cleanview.co/reports/behind-the-meterdata-centers.
30 U.S. Energy Information Administration (EIA), Annual Energy Outlook 2026, April 2026, p. 25,
https://www.eia.gov/outlooks/aeo/pdf/AEO_Narrative.pdf.
31 Will Gruver, “Gas Turbine Power Plant for Data Center in Texas: How Fast Can It Go Live?,” USP&E, October 2,
2025, https://uspeglobal.com/articles/gas-turbine-power-plant-for-data-center-in-texas/.
32 Bedrock, “How Is Natural Gas Powering Data Centers in the Permian Basin?,” June 23, 2026,
https://www.bedrockpcl.com/news/how-is-natural-gas-powering-data-centers-in-the-permian-basin/.
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What is the federal role in permitting electricity infrastructure for
data centers?33
Numerous federal, state, and local laws and regulations affect the permitting for grid
infrastructure, data center interconnection to the grid, and backup electricity facilities. As a result,
data centers in different states might face different sets of permitting requirements associated with
their access to power and environmental requirements.
Because an individual data center has a discrete footprint, permits for on-site energy
infrastructure typically fall under state and local jurisdiction. Power plants developed off-site to
serve data centers face the same permitting requirements as any other power plant. The permit
requirements are largely specific to individual projects and depend, among other things, on
location, the type of generation involved, and whether the power plant is grid-connected or
behind-the-meter.
The Federal Power Act (16 U.S.C. §§791 et seq.) reserves most authority for permitting and siting
of power plants to the states. Specific types of generation may require federal agency
authorizations from the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory
Commission, or the U.S. Army Corps of Engineers. Power plants developed on federal lands
typically require approval from the relevant land management agency or other executive agency
controlling those lands (e.g., Bureau of Land Management). In addition, energy infrastructure for
data center projects may require permits, approvals, or reviews under delegated federal authority
from state, tribal, and local agencies. Relevant requirements may fall under the Clean Air Act, the
Clean Water Act, the Safe Drinking Water Act, and the Coastal Zone Management Act. State
requirements under these statutes may apply more broadly to data center energy infrastructure
than federal agency requirements.
What are the requirements for interconnecting power plants to the
grid?
Since 2003, FERC has set requirements for the terms and conditions under which power plants
interconnect to the grid.34 A key aspect of this requirement is a technical study, known as an
interconnection study, that grid operators must conduct to determine whether a proposed new
power plant would pose reliability risks to the system. Power plant developers requesting to
interconnect to the grid are placed in an interconnection queue to wait their turn for an
interconnection study to be completed.
In 2023, FERC began implementing reforms to the interconnection study process aimed at
reducing the time to complete the process. Key aspects of the reforms, specified in Order No.
2023, are increased “readiness requirements” aimed at reducing speculative generation
interconnection requests and the use of “cluster studies” so that multiple proposed power plants
can be studied together. 35 Many observers believe that the Order No. 2023 reforms will accelerate
33 For details, see CRS Report R48762, Data Center Energy Infrastructure: Federal Permit Requirements, by Paul W.
Parfomak et al.
34 FERC, Standardization of Generator Interconnection Agreements and Procedures (Order No. 2003), July 24, 2003,
https://www.ferc.gov/sites/default/files/2020-06/order-2003.pdf. FERC’s regulations apply only to utilities subject to
its jurisdiction. Many utilities outside FERC’s jurisdiction nonetheless maintain similar procedures for interconnecting
new power plants.
35 FERC, Improvements to Generator Interconnection Procedures and Agreements, Order No. 2023, Docket No.
RM22-14-000, 184 FERC ¶ 61,054, July 28, 2023, https://www.ferc.gov/media/order-no-2023.
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Data Centers and the Electricity Grid: Frequently Asked Questions
the pace of power plant development, though other factors (e.g., permitting, financing) remain
important in determining how many new power plants become operational.
Separate from the Order No. 2023 reforms, FERC has approved “fast-track” interconnection
study processes for several other grid operators. These processes are aimed at addressing
concerns that growth in electricity demand—largely from data centers—will outpace supply in
the next few years. Under the fast-track processes, grid operators select a limited number of
power plant projects for accelerated interconnection study, regardless of when they were
announced (typically, projects are studied in order of announcement). Selected projects must meet
certain criteria, such as being “advanced projects of significant size” and being dispatchable (i.e.,
controllable by a grid operator).36
What is data center flexibility and how does it affect the grid?
For most hours of the year, the existing U.S. electricity system has sufficient electricity supply
and transmission capacity to accommodate new load growth. Load refers to electricity demand
and can be used to refer to either a volume of electricity sales or a number of electricity
customers. Utility planners design the system around the relatively few hours of the year with
peak electricity demand when the system is constrained—typically the hottest summer afternoons
and the coldest winter nights. New demand from data centers could potentially overwhelm the
grid’s capacity during these hours. Utilities review applications to interconnect new load to
identify potential reliability risks during peak hours. If a utility finds a risk, the new customer
must wait until new grid infrastructure is in place to reduce the reliability risk.
Some data centers have the technical potential to decrease their demand during peak demand
hours, either by pausing or slowing computational tasks or by switching to backup power
supplies. This behavior is known as flexibility, and electricity consumers that have flexibility are
known as flexible loads. Flexibility has multiple advantages to electricity customers. If data
centers were to implement this kind of flexible behavior, either through voluntary demand
response programs or mandatory requirements, they could potentially be connected to the grid
faster because they might not have to wait for grid infrastructure to be built.37 Also, avoiding the
need for new infrastructure could reduce the risk of electricity prices increases. Additionally, data
centers—or more specifically, their backup generators—could be utilized during peak demand
times to reduce blackout risks for other customers. Secretary of Energy Chris Wright has
encouraged grid operators to direct consumers like data centers to shift to backup power sources
“as a last resort” during grid emergencies.38
Because of these perceived advantages, increased flexibility has been identified as one potential
solution to the mismatch between electricity supply and demand growth.39 When data centers
agree to be flexible loads, demand during peak times is lower, reducing the need for new power
plants. For example, NERC found after accounting for flexibility that summer 2026 peak demand
36 FERC, Order Accepting Tariff Revisions, 95 FERC ¶ 61,197, June 9, 2026, https://www.pjm.com/-/media/DotCom/
documents/ferc/orders/2026/20260609-er26-1563-000.PDF.
37 Demand response programs typically compensate electricity customers for reducing their electricity demand when
their utility requests it, usually when utility electricity supplies are constrained.
38 Letter from Chris Wright, Secretary of Energy, to Reliability Coordinators and Balancing Authorities, January 22,
2026, https://www.energy.gov/documents/leveraging-backup-generation-facilities-during-energy-emergencies.
39 T. H. Norris et al., Rethinking Load Growth: Assessing the Potential for Integration of Large Flexible Loads in US
Power Systems, NI R 25-01, Nicholas Institute for Energy, Environment & Sustainability, Duke University, 2025,
https://nicholasinstitute.duke.edu/publications/rethinking-load-growth-assessing-potential-integration-large-flexibleloads-us-power.
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forecast in the ERCOT area40 is 3.7 GW (4.6%) lower than summer 2025 peak demand “because
more data centers can be curtailed by grid operators when needed to prevent grid emergencies.”41
Some data centers may have flexibility limitations, however. Google has stated that “[t]here are
limits to how flexible a given data center can be, since high levels of reliability are critical for
services like Search and Maps, as well as Cloud customers in essential industries like
healthcare.”42 Data centers may also be constrained for technical and operational reasons, such as
legacy software, limited grid analytic capability, and a lack of real-time markets for demand-side
energy resources.43
Can data centers provide benefits to the grid?
There are several ways data center development could potentially provide benefits to the electric
grid. Data centers with behind-the-meter generation could (subject to any local utility limitation)
export power to the grid to supply other customers, temporarily relieving utility generation
constraints.44 Groups of data centers in different electricity markets could also coordinate to shift
computational tasks to other regions when local electricity demand is higher.
Being able to shift workloads and their associated electricity demands in this way (spatial
flexibility), together with flexibility in the scheduling of peak workloads (as described in the
previous question), can potentially lower electricity costs for all customers by smoothing out
demand and avoiding the costliest peak generation supplies across markets.45 Data centers with
on-site energy storage systems could charge storage systems using “excess” electricity from the
grid, when available (e.g., midday when solar generation peaks), or using any electricity from
behind-the-meter generation that is in excess of what is needed to meet a data center’s current
demand. These energy storage systems could then discharge electricity to the grid when overall
demand is higher, increasing and improving the utilization of renewable generation in the
regional generation portfolio.46 Some advocates also see data center demand growth as an
opportunity to invest in modernizing and expanding the transmission grid.47
40 The Electric Reliability Council of Texas (ERCOT) manages approximately 90% of Texas’s electrical load and
serves 24 million customers.
41 NERC, 2026 Summer Reliability Assessment, May 2026, p. 8, https://www.nerc.com/globalassets/our-work/
assessments/nerc_sra_2026.pdf.
42 Michael Terrell, “How We’re Making Data Centers More Flexible to Benefit Power Grids,” Google blog, August 4,
2025, https://blog.google/innovation-and-ai/infrastructure-and-cloud/global-network/how-were-making-data-centersmore-flexible-to-benefit-power-grids/.
43 Thomas W. Kirchstetter et al., “DOE Data Center Load Flexibility Workshop Summary,” LBNL, January 2025,
https://eta-publications.lbl.gov/sites/default/files/2025-03/
final_doe_data_center_load_flexibility_workshop_summary.v0307.pdf.
44 Christopher Tozzi, “How Grid-Safe Data Centers Can Help Ease the Power Crisis,” Data Center Knowledge, March
5, 2026, https://www.datacenterknowledge.com/energy-power-supply/how-grid-safe-data-centers-can-help-ease-thepower-crisis.
45 Evan Lerner, “How Data Center Flexibility Can Relieve Stress on the Western Grid,” University of Utah, June 16,
2026, https://attheu.utah.edu/science-technology/how-data-center-flexibility-can-relieve-stress-on-the-western-grid/.
46 Patrick Donovan, “The Rise of BESS: Powering the Future of Data Centers,” Schneider Electric Blog, May 1, 2024,
https://blog.se.com/datacenter/2024/05/01/the-rise-of-bess-powering-the-future-of-data-centers/.
47 See, for example, Jane Flegal, Seizing the Data Center Buildout for Grid Modernization, Searchlight Institute, March
9, 2026, https://www.searchlightinstitute.org/research/seizing-the-data-center-buildout-for-grid-modernization/.
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How have data centers affected electricity prices?
The price (rate) that retail customers pay for electricity is determined primarily by two factors:
the cost of generating electricity and the cost of delivering electricity to customers through the
grid.48 Utility regulators at the state or local level approve rates that reflect a utility’s cost for
these components. Rates typically change every few years in response to shifts in utility costs
over time. For example, if a utility invests in a new power plant or in upgrades to the grid, rates
might need to change to reflect those capital investments. Utility sales also affect rates. When
sales increase, a utility earns more revenue; conversely, when sales decrease, a utility earns less
revenue. If a utility’s revenue is less than its costs, rates might need to increase to compensate.
Conversely, if a utility’s revenue exceeds its costs, regulators might lower rates.
Researchers at Lawrence Berkeley National Laboratory (LBNL) have studied the extent to which
data centers and other drivers have affected retail electricity prices.49 Their most recent analysis,
which covered the years 2019 through 2025, found that the main driver behind increases in
electricity prices during this period was utility investments in grid infrastructure, mostly in
response to aging infrastructure and resilience needs. Other key drivers included natural gas
prices (natural gas is a key fuel for power generation); recovery from natural disasters (e.g.,
storms, wildfires); and state energy and environmental policies. LBNL found that states with the
largest data center demand growth generally saw electricity price decreases during the period
from 2019 through 2025, although some states with relatively large data center growth saw prices
increase or stay the same.50 One explanation for this finding may be that increased demand in
some states allowed utility costs to be spread over a larger sales volume, putting downward
pressure on rates.51 Other studies have reached similar conclusions about rates during this
period.52
Although the studies discussed above found only a limited effect of data centers on electricity
prices in the past, data centers could have a greater impact on prices as the industry continues to
grow and demand more electricity. In electricity markets with little spare generation capacity, the
added demand of data centers may increase the future price of electricity for all customers. This
appears to be one of several contributing factors to electricity price increases in 2025 and 2026 in
the PJM region, a part of the country that includes “Data Center Alley” in northern Virginia (see
Figure 1).53 A recent modeling study led by North Carolina State University found that data
centers (and cryptocurrency mining facilities) could cause national average electricity costs to
increase by 6% to 29%, across different modeling scenarios, with increases up to 57% in some
48 EIA, “Electricity Explained: Factors Affecting Electricity Prices,” https://www.eia.gov/energyexplained/electricity/
prices-and-factors-affecting-prices.php.
49 Ryan Wiser et al., “Retail Electricity Price Trends and Drivers: Data Update—2026 Edition,” LBNL and the Brattle
Group, April 2026, https://emp.lbl.gov/sites/default/files/2026-03/Retail%20Price%20Trends_2026%20edition.pdf.
50
Wiser et al., “Retail Electricity Price Trends and Drivers: Data Update—2026 Edition,” p. 47.
51 Keaton Peters, “Utilities Are Now Pitching Data Centers as a Way to Cut Electric Costs,” Straight Arrow News,
August 9, 2026, https://san.com/cc/utilities-are-now-pitching-data-centers-as-a-way-to-cut-electric-costs/.
52 Energy and Environmental Economics (E3), Understanding the Drivers of Rising Electricity Rates and the Role of
Data Centers, May 2026, https://www.ethree.com/wp-content/uploads/2026/05/Understanding-the-Drivers-of-RisingElectricity-Rates-and-the-Role-of-Data-Centers_E3-2026.pdf; and Angela Ryu and Shon R. Hiatt, Data Center Entry
and U.S. Electricity Prices: From the Wholesale Market to the Power Bill, University of Southern California Marshall
School of Business, Zage Business of Energy Initiative, May 22, 2026, https://drive.google.com/file/d/
1IWolyGYxOv5ENI3frcRU8U0Mge_fbWUr/view.
53 For additional discussion of PJM electricity price increases, see CRS Report R48553, PJM’s Electric Capacity
Market: Background and Current Issues, by Ashley J. Lawson.
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regions.54 Another modeling study led by Carnegie Mellon University found that “data center and
cryptocurrency mining growth through 2030 could increase average U.S. electricity generation
costs by 8%.”55 Whether electricity costs rise due to data centers, and by how much, would vary
by region and depend on assumptions about market response. The potential price impacts on
electricity customers in any market area remain uncertain.
Where is data center growth happening?
Data center growth has been affecting the electricity grid more in some regions than others.
Information from 2024 shows that data centers in 15 states together consumed 80% of electricity
nationwide used by such facilities.56 On an individual basis, Virginia was the only state with
greater than 20% of total electricity consumed by data centers (Figure 2).
Figure 2. Standalone Data Center Electricity Use by State in 2024
Source: CRS using data provided by Electric Power Research Institute, Powering Intelligence 2026: Updated
Scenarios of U.S. Data Center Electricity Use and Power Strategies, February 25, 2026, https://poweringintelligence.epri.com/.
Note: Includes cryptocurrency facilities.
Developers anticipate future data center buildouts to occur more in new geographic regions, with
some analysis expecting these to be in rural areas as time-to-power exceeds developers’
requirement in traditional areas.57 One analysis projects that by 2030 a greater range of states will
have large shares of electricity consumption attributable to data centers (Figure 3).
54 Jeremiah X. Johnson et al., “Power System Costs and Emissions from Data Center and Cryptocurrency Mining
Expansion in the United States,” Environmental Research Letters, Vol. 21, June 4, 2026, https://iopscience.iop.org/
article/10.1088/1748-9326/ae6c3d.
55 Michael Blackhurst et al., “Data Center Growth Could Increase Electricity Bills 8% Nationally and as Much as 25%
in Some Regional Markets,” white paper, Carnegie Mellon University, July 16, 2025, https://www.cmu.edu/work-thatmatters/energy-innovation/data-center-growth-could-increase-electricity-bills.
56 EPRI, Powering Intelligence: Analyzing Artificial Intelligence and Data Center Energy Consumption, May 28, 2024,
p. 5. The top six were, in decreasing order, Virginia, Texas, California, Illinois, Oregon, and Arizona.
57 Bloom Energy, 2026 Data Center Power Report, January 2026, p. 4, https://www.bloomenergy.com/wp-content/
(continued...)
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Figure 3. Projected Standalone Data Center Electricity Use by State in 2030
Source: CRS using data provided by Electric Power Research Institute, Powering Intelligence 2026: Updated
Scenarios of U.S. Data Center Electricity Use and Power Strategies, February 25, 2026, https://poweringintelligence.epri.com/.
Note: Includes cryptocurrency facilities.
Can data centers cause blackouts?
Data centers do not appear to have caused blackouts to date. Electric reliability in the United
States remains generally high, barring local or regional outages associated with natural disasters
or weather events.58 Nonetheless, generation capacity constraints have raised concerns in some
electricity markets that the added electricity demand of data centers on peak demand days (e.g.,
during heat waves) could lead to electricity blackouts or brownouts (in which utilities are forced
to reduce grid voltage system-wide to avoid full blackouts).59 Although such events are possible,
electric utilities generally have processes in place to avoid supply disruptions. In addition, the
Secretary of Energy may issue emergency orders under the Federal Power Act temporarily
authorizing grid operators to take additional actions to ensure grid reliability.60 For example, at
the request of the PJM grid operator (which serves the Mid-Atlantic and parts of the Midwest),
DOE issued an emergency order on May 18, 2026, authorizing PJM “to direct backup generation
resources at data centers (including, but not limited to, hyperscaler facilities), and at other large
uploads/2026-power-report.pdf; and Skyler Seets and Kaitlyn Radde, “Most New Data Centers in the U.S. Are Coming
to Rural Areas,” Pew Research Center, April 13, 2026, https://www.pewresearch.org/short-reads/2026/04/13/mostnew-data-centers-in-the-us-are-coming-to-rural-areas/.
58 See, for example, EIA, “Hurricanes in 2024 Led to the Most Hours Without Power in the United States in 10 Years,”
December 1, 2025, https://www.eia.gov/todayinenergy/detail.php?id=66744. U.S. islands and remote areas may
experience relatively more electricity disruptions. See, for example, EIA, “Even Without Hurricanes, Customers in
Puerto Rico Lose About 27 Hours of Power per Year,” Today in Energy, August 13, 2025, https://www.eia.gov/
todayinenergy/detail.php?id=65925.
59 Scott Gelman, “Could Extreme Heat, Data Center Demand Prompt Brownouts Across DC Region?,” WTOP News,
July 15, 2026, https://wtop.com/local/2026/07/is-extreme-heat-data-center-demand-enough-to-prompt-brownoutsacross-dc-region/.
60 16 U.S.C. §824a(c). For more details, see CRS Report R48568, Federal Power Act: The Department of Energy’s
Emergency Authority, by Ashley J. Lawson.
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load industrial and commercial customer sites … to operate as a last resort” to prevent
blackouts.61
An emerging concern is the risk that large loads such as data centers will unexpectedly go offline,
causing voltage and frequency levels on the grid to increase. Events like this have occurred in
recent years in Virginia and Texas, prompting NERC to issue an alert in May 2026 directing grid
operators to take certain precautionary actions to prevent equipment damage from such events.62
Additionally, NERC is developing new reliability requirements for large load customers,
including large data centers, and expects to file proposed requirements with FERC by December
31, 2026, for approval.63
What has the federal government been doing about data centers
and the grid?
The Trump Administration has taken several actions related to data centers and the grid. President
Trump issued Executive Order 14318 of July 23, 2025, “Accelerating Federal Permitting of Data
Center Infrastructure,” intended “to facilitate the rapid and efficient buildout” of data center
infrastructure.64 In October 2025, the Secretary of Energy directed FERC to initiate a rulemaking
to ensure that “large loads, including AI data centers, served by public utilities [will] be able to
connect to the transmission system in a timely, orderly, and non-discriminatory manner.”65 In
response, FERC initiated a proceeding on June 18, 2026, requiring FERC-jurisdictional regional
transmission organizations and independent system operators (shown in Figure 1) to either
demonstrate that their existing rules appropriately address large load interconnections or propose
rules changes that would do so.66 On July 16, 2026, FERC directed NERC to develop new or
modified reliability standards to address reliability risks associated with integrating
“computational loads” (e.g., data centers) into the grid.67
On March 4, 2026, President Trump announced a “Ratepayer Protection Pledge,” which called on
“the leading United States hyperscalers and AI companies to build, bring, or buy all of the energy
61 Department of Energy, Order No. 202-26-23, May 18, 2026, https://www.energy.gov/documents/doe-emergency-
order-no-202-26-23pdf.
62 NERC, “NERC Issues Level 3 Alert, Reliability Guideline Focused on Large Load Challenges,” press release, May
4, 2026, https://www.nerc.com/newsroom/nerc-issues-level-3-alert-reliability-guideline-focused-on-large-loadchallenges.
63 NERC, Large Loads Action Plan Q1 2026 Update: Addressing an Emerging Reliability Issue, April 2026,
https://www.nerc.com/globalassets/initiatives/large-loads-action-plan/llap-quarterly-update-q1-2026.pdf.
64 Executive Order 14318 of July 23, 2025, “Accelerating Federal Permitting of Data Center Infrastructure,” 90 Federal
Register 35385, July 28, 2025, https://www.federalregister.gov/documents/2025/07/28/2025-14212/acceleratingfederal-permitting-of-data-center-infrastructure.
65 Letter from Chris Wright, Secretary of Energy, to FERC Commissioners, October 23, 2025, p. 1,
https://www.energy.gov/sites/default/files/2025-10/403%20Large%20Loads%20Letter.pdf. Although FERC generally
acts independently of the Secretary, the Department of Energy Organization Act (P.L. 95-91) authorizes the Secretary
of Energy “to propose rules, regulations, and statements of policy of general applicability with respect to any function
within the jurisdiction of [FERC].” 42 U.S.C. §7173.
66 FERC staff, RTO/ISO Show Cause Orders, presentation, June 18, 2026, p. 4, https://ferc.gov/news-events/news/
presentation-items-e-7-through-e-12-rtoiso-show-cause-orders. Regional transmission organizations (RTOs) and
independent system operators (ISOs) are entities that operate regional transmission systems independently of wholesale
electricity market participants (e.g., generators). For more information, see FERC, “Electric Power Markets,” updated
March 27, 2025, https://www.ferc.gov/electric-power-markets.
67 FERC, “Order Directing the North American Electric Reliability Corporation to File Reliability Standard(s)
Pertaining to Computational Load Integration,” 196 FERC ¶ 61,031, July 16, 2026, https://www.ferc.gov/media/e-1rd26-7-000.
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needed for building and operating data centers, paying the full cost of their energy and
infrastructure.”68 Reportedly, several major technology companies—including Google, Microsoft,
Meta, Oracle, xAI, OpenAI, and Amazon—voluntarily agreed to abide by the pledge.69 On July
23, 2026, President Trump announced “a historic expansion of the Ratepayer Protection Pledge,
bringing more than 200 additional utilities, data center developers, cooperatives, and states into
this growing national commitment.”70 As of the date of this publication, over 300 organizations
have committed to the pledge, according to the Trump Administration.71 The pledge does not
have an enforcement mechanism. Some observers contend that while the pledge creates a
framework that could shield non-data-center consumers, its long-term success will depend on
various implementation measures.
What have states been doing about data centers and the grid?
Most regulation of electricity generation and electric utilities falls under state jurisdiction. States
have been pursuing various independent policies to address concerns about data centers and the
grid. Many state legislatures have considered or passed “affordability” legislation intended to
ensure that data centers cover the full costs of their electricity demand and not shift their
electricity costs onto other electricity customers.72
Some states have proposed legislation requiring data centers to build new generation plants, an
approach often referred to as “bring your own power” (BYOP) or “bring your own generation”
(BYOG), as noted in “How do data centers get their electric power?” above. Others have
proposed requiring data centers to participate in electricity demand response programs or agree to
be disconnected first in case of a shortage of electricity supplies. Texas, for example, legislated
both requirements in 2025.73 Some states have considered legislation requiring data centers to
procure some or all of their electricity from energy sources that do not emit greenhouse gases.74
States have also pursued transparency legislation requiring data centers to report certain
information about their energy use to inform regulators and legislators about their impacts to the
grid.75
Absent new legislation, state utility regulators have considered or imposed various policies under
their existing statutory authorities to address concerns about data center grid impacts by
68 Executive Office of the President, “Ratepayer Protection Pledge,” 91 Federal Register 11439, March 9, 2026.
69 Katherine Long and Peter Behr, “What to Know About Trump’s AI Deal,” Politico Pro, March 4, 2026,
https://subscriber.politicopro.com/article/2026/03/what-to-know-about-trumps-ai-deal-00811909.
70 White House, “President Trump’s Ratepayer Protection Pledge Secures American AI Dominance, Protects
Consumers,” press release, July 23, 2026, https://www.whitehouse.gov/releases/2026/07/president-trumps-ratepayerprotection-pledge-secures-american-ai-dominance-protects-consumers/.
71 White House, “Ratepayer Protection Pledge,” accessed August 17, 2026, https://www.whitehouse.gov/ratepayerprotection-pledge/.
72 North Carolina Clean Energy Technology Center, 50 States of Energy Affordability: Quarterly Report, June 2026,
https://www.dsireinsight.com/publications?_sp=ad9b8524-e005-421e-80a5-64cf979f30df.1784042352567; Morgan
Scarboro, “How States Are Requiring Data Centers to Pay for Grid Expansion (Comparing Ratepayer Protection Bills
Across Five States),” MultiState, June 4, 2026, https://www.multistate.us/insider/2026/6/4/how-states-are-requiringdata-centers-to-pay-for-grid-expansion-comparing-ratepayer-protection-bills-across-five-states.
73 For a discussion of the 2025 Texas data center law, see Brian Martucci, “Texas Law Gives Grid Operators Power to
Disconnect Data Centers During Crisis,” Utility Dive, June 25, 2025, https://www.utilitydive.com/news/texas-lawgives-grid-operator-power-to-disconnect-data-centers-during-crisi/751587/.
74 See, for example, New Jersey Senate Bill S4143, Session 2024-2025, https://www.njleg.state.nj.us/bill-search/2024/
S4143. The bill was not enacted.
75 See, for example, Pennsylvania Senate Act No. 21, PA SB146, July 12, 2026, https://legiscan.com/PA/bill/SB146/
2025.
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establishing new large load rate classes, demand response requirements, and other measures to
avoid cost shifts and ensure reliability, especially for residential customers.76 Some states have
pursued voluntary commitments from data center developers to protect electricity consumers
from electricity cost increases associated with growing data center electricity demand. For
example, on July 15, 2026, the governor of Michigan announced a Michigan Affordable and
Responsible Growth Action Plan seeking voluntary commitments from data center developers “to
protect Michigan consumers from higher energy bills,” among other provisions.77
Additionally, some states have considered imposing moratoria on new data center development to
allow time to more thoroughly evaluate their effects on communities and the grid, and to
implement associated policies and regulations.78 On July 14, 2026, New York became the first
state to impose such a moratorium, “temporarily pausing State environmental permits for up to
one year in order to build a nation-leading regulatory framework that protects ratepayers, the
environment, the energy grid and communities across the state.”79 On August 3, 2026, the
governor of Texas, in order to “keep the grid stable and reliable,” ordered a pause on data center
development until the completion of “a comprehensive verification and audit of all data centers
advancing through ERCOT’s interconnection process.”80
What has Congress been doing about data centers and the grid?
Congress has an ongoing interest in the development of data centers, generally, and their impacts
on the electricity grid and electricity customers, specifically. Hearings in the 119th Congress have
examined data-center- and grid-related issues.81 Ensuring data centers do not raise costs for
residential customers or reduce grid reliability has been a focus of legislative activity.
As of the date of this publication, at least a dozen bills have been introduced in the 119th Congress
with the primary intention being to ensure that data centers (or, more generally, any large load
customer) cover the full costs of their electricity demand or do not shift their electricity costs onto
76 See, for example, Diana DiGangi, “Virginia SCC Weighs Dominion Data Center Transmission Cost Allocation,”
Utility Dive, July 15, 2026, https://www.utilitydive.com/news/virginia-scc-dominion-data-center-transmission-costallocation/825300/.
77 Michigan Governor Gretchen Whitmer, “Gov. Whitmer Launches Michigan Affordable and Responsible Growth
Action Plan, Calls on Data Center Companies to Sign Pledge,” press release, July 15, 2026, https://www.michigan.gov/
whitmer/news/press-releases/2026/07/15/gov-whitmer-data.
78 National Conference of State Legislatures, “Which States Are Banning Data Centers?” July 1, 2026,
https://www.ncsl.org/fiscal/which-states-are-banning-data-centers.
79 New York Governor Kathy Hochul, “First Statewide Moratorium on New Hyperscale Data Centers Launched by
Governor Kathy Hochul,” press release, July 14, 2026, https://www.governor.ny.gov/news/first-statewide-moratoriumnew-hyperscale-data-centers-launched-governor-kathy-hochul. Prior to this, in 2022, New York passed a two-year
moratorium that blocked issuance of permits and approval of new cryptocurrency mines while the state evaluated their
environmental effects. See NY Laws of 2022, Chapter 628.
80 Letter from Greg Abbott, Governor of Texas, to Thomas Gleeson, Chairman, Public Utility Commission of Texas,
and Pablo Vegas, President and Chief Executive Officer, ERCOT, August 3, 2026, https://gov.texas.gov/uploads/files/
press/Thomas_Gleeson_Pablo_Vegas_Data_Centers_Directive_Letter_to_PUCT_ERCOT_August_2026_.pdf.
81 See, for example, U.S. Congress, House Committee on Energy and Commerce, Subcommittee on Energy, AI and the
Grid: Meeting Growing Power Demand While Protecting Ratepayers, hearing, 119th Cong., 2nd sess., April 29, 2026,
https://energycommerce.house.gov/events/energy-hearing-ai-and-the-grid-meeting-growing-power-demand-whileprotecting-ratepayers; U.S. Congress, House Committee on Science, Space, and Technology, Subcommittee on
Investigations and Oversight, Powering America’s AI Future: Assessing Policy Options to Increase Data Center
Infrastructure, hearing, 119th Cong., 2nd sess., February 24, 2026, https://science.house.gov/hearings?ID=17369F69BFD6-4F4A-A499-C38B73CCD1A6.
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Data Centers and the Electricity Grid: Frequently Asked Questions
other electricity customers.82 One such bill, the Ratepayer Protection Act (H.R. 9340), was
ordered to be reported by the House Energy and Commerce Committee on July 21, 2026. A
related bill (S. 5028) was introduced in the Senate. In addition, two bills (S. 4214 and H.R. 9442)
would impose a nationwide data center construction moratorium until “laws are enacted to ensure
that” data centers do not increase electricity costs for other consumers, among other provisions.
Some Members have introduced bills in the 119th Congress that focus on other aspects of data
centers and the grid. Two bills (S. 5199 and S. 4806) would clarify that FERC has regulatory
authority over the interconnection of large loads (e.g., data centers) to the grid. Two bills (S. 1475
and H.R. 6179) would require collection of data center electricity consumption information and
establish emissions standards and an associated fee system for data center electricity
consumption. One bill (H.R. 6983) would require data centers to generate their own electricity
and that certain fractions be from clean energy sources as defined in the bill. Finally, one bill
(H.R. 5927) would amend the Defense Production Act to accelerate the development of critical AI
projects, including electricity infrastructure projects.
In addition to the bills cited above, other proposed legislation may address data centers’
electricity issues. The set of bills discussed above should not be considered comprehensive.
Additional Resources
CRS has several other published products which may be helpful in further examining specific
data-center-related energy policy issues:
•
•
•
•
•
CRS Report R49057, Data Centers and Water: Frequently Asked Questions,
coordinated by Peter Folger and Elena H. Humphreys
CRS Report R48914, Cryptocurrency Mining and the Electricity Sector, by
Corrie E. Clark
CRS Report R48762, Data Center Energy Infrastructure: Federal Permit
Requirements, by Paul W. Parfomak et al.
CRS Report R48646, Data Centers and Their Energy Consumption: Frequently
Asked Questions, by Martin C. Offutt et al.
CRS Report R48583, Energy Tax Benefits for Data Centers: In Brief, by
Nicholas E. Buffie
For additional information, congressional clients may also contact the CRS policy experts and
legal points of contact listed in CRS Report R48920, Data Centers: CRS Experts, coordinated by
Paul W. Parfomak.
82 See, for example, H.R. 9777, H.R. 9655, H.R. 9419, H.R. 8033, H.R. 7977, H.R. 7066, H.R. 6529, S. 4559, S. 3852,
and H.R. 8241/S. 3682.
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Author Information
Ashley J. Lawson
Specialist in Energy Policy
Martin C. Offutt
Analyst in Energy Policy
Paul W. Parfomak
Specialist in Energy Policy
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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Congressional Research Service
R49326 · VERSION 1 · NEW
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