Congress mandates data centers pay grid costs—and hire union labor

What it does

This bill requires the Federal Energy Regulatory Commission (FERC) to create a new interconnection queue and rules for large power-consuming facilities (primarily data centers) seeking to connect to the electrical grid. Large load customers must pay 100% of interconnection study costs and network upgrades, demonstrate demand flexibility (ability to reduce power use on request), and either build their own power generation or arrange for it. The bill prioritizes facilities that use union labor, offer battery backup, or sign labor peace agreements, and requires FERC to study data center energy use and establish an AI testbed at a national laboratory.

Why we flagged it

The bill's core mechanism is a new regulatory framework for large load facilities (data centers) interconnecting to the grid, with mandatory cost-bearing by the facilities themselves, demand-flexibility requirements, and labor-standard incentives. It is not primarily a deregulation or subsidy bill; it is a cost-allocation and grid-management rule.

• Section (j) requires DOE to establish a data-center-scale AI testbed at a National Laboratory, unrelated to interconnection rules or grid management.
• Section (i) grants DOE broad authority to collect data center energy and water performance data, with FOIA exemptions, beyond FERC's interconnection mandate.

What the text implies

• Labor peace agreement requirement (section 224(a)(8)) and prevailing wage mandate (section 224(b)(5)(A)(ii)) may significantly increase data center construction costs, potentially slowing AI infrastructure deployment and raising electricity prices if supply lags demand.
• Demand flexibility and curtailability requirements (section 224(b)(4)(A)(i)) give transmission providers broad power to interrupt data center operations during grid stress, creating operational risk for AI companies and potentially affecting service reliability for their customers.
• Non-firm transmission access for colocated facilities (section 224(b)(6)) and non-firm injection rights without deliverability studies (section 224(b)(7)) create a two-tier system where colocated data centers receive preferential but less reliable grid access, potentially disadvantaging new entrants.
• DOE data collection authority (section 224(i)) with FOIA exemptions allows confidential business information (energy use, AI workload details) to be collected and withheld from public disclosure, creating an information asymmetry between government and competitors.
• Prioritization within load interconnection queues (section 224(b)(5)) for facilities meeting labor and battery-backup criteria may favor large, well-capitalized data center operators over smaller or newer entrants, concentrating market power.

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

Who it affects

The bill protects ordinary ratepayers by requiring data centers to pay their own interconnection and network upgrade costs (preventing cost-shifting to residential consumers) and mandates demand flexibility to protect grid reliability during peak demand. However, the labor and apprenticeship requirements, while pro-worker, may increase data center costs and could slow AI infrastructure buildout, potentially raising electricity prices long-term if supply constraints persist. The net effect on ord

Who stands to gain

• Large data center operators (especially those with existing union relationships or capital for batte
• Construction and apprenticeship programs (prevailing wage and registered apprenticeship requirements
• Battery energy storage manufacturers (prioritization incentive for battery backup systems)
• Transmission providers (ability to impose study deposits, readiness payments, and withdrawal penalti

Named in the bill

Federal Energy Regulatory Commission (FERC), Department of Energy (DOE), National Laboratories, Transmission providers (ISOs, RTOs, public utilities), Data centers, Large load facilities (>50 MW peak demand), Labor organizations, Secretary of Labor, Secretary of Energy

Where it stands

1 cosponsor: 1 Democrats.

• Sep 24, 2026 — Introduced · Congress.gov: “Introduced in House”
• Sep 24, 2026 — Referred to House Committee on Science, Space, and Technology and House Committee on Energy and Commerce · Congress.gov: “Referred to the Committee on Energy and Commerce, and in addition to the Committee on Science, Space, and…”

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