Congress shields ratepayers from data center costs—but funds it with tax credits
H.R. 9419 — Power and Water for Families Act of 2026 · Filed by Michael Baumgartner (R-WA) · Introduced Jun 24, 2026 · Referred to committee
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What it does
This bill requires large data centers and computing facilities (100+ megawatts) to pay the full cost of power and water infrastructure upgrades needed to serve them, rather than spreading those costs to existing residential and small-business customers. It also creates two 30% federal tax credits: one for data centers that build extra power generation to share with other customers, and one for water-recycling projects at industrial facilities and municipal systems. The stated goal is to enable AI infrastructure growth while protecting ordinary ratepayers from cost-shifting.
Why we flagged it
The bill's core mechanism is a cost-allocation standard (large-load customers bear full incremental infrastructure costs) paired with federal tax incentives (30% credits for additive generation and water reuse). It is not primarily a deregulation or a pure subsidy, but a hybrid that shifts costs to large facilities while offering tax-funded offsets for certain investments.
What the text implies
- The 30% tax credit for 'additive generation' may incentivize data centers to build excess power capacity nominally for other customers, but the credit recapture rules are complex and may not fully prevent cost-shifting if the facility later increases its own demand or terminates the power-sharing agreement.
- Water-reuse tax credits apply to industrial and data-center facilities, but the bill does not mandate that utilities pass savings from water conservation to residential ratepayers, creating a subsidy that may not translate to consumer benefit.
The full analysis lists 5 implications of this text.
Who stands to gain
data center operators and large computing facilities; renewable energy developers (via additive generation credit); water treatment and recycling companies