Congress taxes data centers to fund low-income energy aid—but costs may ripple to consumers.

What it does

This bill creates a federal fee on electricity consumed by large data centers (those with over 50 megawatts of computing capacity). Starting in 2027, data center operators pay $0.01 per kilowatt-hour consumed. Beginning in 2028, facilities using electricity from high-carbon sources pay an additional $0.05 per kilogram of carbon emissions. Revenue collected goes to states and tribes for low-income energy assistance, energy efficiency, and grid improvements.

Why we flagged it

The bill functions as a sector-specific excise tax on data center electricity consumption, with a secondary carbon-intensity surcharge. It is not a general environmental regulation but a revenue-raising mechanism targeting a specific industry.

What the text implies

• The $0.01/kWh base charge may incentivize data centers to relocate to states with cheaper renewable energy or lower-carbon grids, potentially concentrating infrastructure in specific regions and creating uneven state-level economic impacts.
• The carbon-intensity surcharge (subsection b) uses a 0.10 threshold and applies a $0.05/kg CO2e rate, but the bill grants EPA broad discretion to set monitoring methods and carbon accounting rules—creating regulatory uncertainty that could shift compliance costs unpredictably.
• Section (b)(3)(A)(ii) allows data centers to claim renewable energy credits from power purchase agreements placed into service within 2 years of the facility—this may create a secondary market for PPAs and incentivize rapid renewable deployment, but also creates a loophole for facilities to minimize their carbon intensity charge.
• The bill does not cap total charges or include phase-in periods, meaning large hyperscale data centers (Google, Amazon, Microsoft) could face hundreds of millions in annual charges immediately in 2027, potentially accelerating cost pass-through to cloud customers and affecting small businesses reliant on cloud services.
• Revenue allocation to states uses the Energy Policy and Conservation Act formula, which may not align with where data centers are concentrated, creating a geographic mismatch between where charges are collected and where funds are deployed.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Data center operators face new operating costs that may be passed to consumers through higher cloud service prices, offsetting some public benefit. However, revenue explicitly funds low-income energy assistance and grid efficiency, creating a direct public benefit that partially offsets the cost increase. The net effect depends on pass-through rates and program effectiveness.

Who stands to gain

• State and tribal governments (direct recipients of collected revenue)
• Low-income households (via Low-Income Home Energy Assistance Act programs)
• Renewable energy developers (via incentives for power purchase agreements)
• Energy efficiency contractors and grid infrastructure vendors (eligible uses of state/tribal funds)

Named in the bill

Environmental Protection Agency (EPA), Data center operators (Google, Amazon, Microsoft, Meta, Apple, etc.), State governments, Indian Tribes, Department of Energy, Intergovernmental Panel on Climate Change (IPCC)

Where it stands

• Sep 16, 2026 — Introduced · Congress.gov: “Introduced in House”
• Sep 16, 2026 — Referred to House Committee on Energy and Commerce · Congress.gov: “Referred to the House Committee on Energy and Commerce”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.