Congress quietly exempts new power companies from safety rules
S. 3585 — DATA Act of 2026 · Filed by Tom Cotton (R-AR) · Introduced Jan 7, 2026 · Referred to committee
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What it does
This bill creates a new category of electric utility called a 'consumer-regulated electric utility' (CREU) that can generate and sell electricity to customers but is exempt from nearly all federal regulation—including reliability standards, rate oversight, and interconnection requirements—as long as it remains physically isolated from the main power grid. The bill allows these utilities to operate independently without FERC oversight, PURPA obligations, or holding-company regulations, while still being able to use public rights-of-way for construction.
Why we flagged it
The bill's core function is to carve out a new class of electric utilities from federal oversight and reliability standards. While framed as enabling 'decentralized' alternatives, it mechanically exempts operators from the regulatory framework that protects grid stability and consumer interests.
What the text implies
- CREUs can operate in 'islands' serving specific customers (e.g., industrial parks, wealthy enclaves) without reliability obligations, potentially creating a two-tier electricity system where some customers have lower standards of service.
- The exemption from PURPA (Public Utility Regulatory Policies Act) means CREUs have no obligation to interconnect or purchase power from renewable or small-scale generators, potentially blocking distributed renewable energy integration.
- If a CREU fails or abandons service, stranded customers have no regulatory recourse—no rate protection, no service-continuity obligation, no FERC oversight to enforce standards.
- The bill allows CREUs to use public rights-of-way (streets, easements) for infrastructure but limits local review to only 'right-of-way restoration' and 'storm-response planning'—excluding safety, environmental, or community-impact review.
- Exemption from holding-company regulation (PUHCA) allows complex corporate structures to own CREUs without transparency or financial oversight, creating potential for cross-subsidization or financial instability hidden from regulators.
Who it affects
Ordinary citizens lose critical consumer protections and grid reliability safeguards. Exempting new utilities from federal reliability standards, rate regulation, and interconnection oversight creates risks of service disruptions, price gouging, and stranded customers if a CREU fails. The bill prioritizes private operators' freedom over public safety and consumer protection.
Who stands to gain
- private electricity operators / microgrids
- industrial and commercial real-estate developers
- technology companies operating private power systems
- private equity / infrastructure investors
Named in the bill
Federal Energy Regulatory Commission (FERC), Department of Energy (DOE), Electric Reliability Organization (ERO), Federal Power Act (FPA), Public Utility Regulatory Policies Act (PURPA), Public Utility Holding Company Act (PUHCA), Bulk Electric System (BES), consumer-regulated electric utility (CREU)
Where it stands
- Jan 7, 2026 — Introduced · Congress.gov: “Introduced in Senate”
- Jan 7, 2026 — Referred to Senate Committee on Energy and Natural Resources · Congress.gov: “Read twice and referred to the Committee on Energy and Natural Resources”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
10 lobbying clients named this bill on 11 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $9,928,610 in lobbying spend. A filing names 39 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 91% of bills with at least one filing.
Tom Cotton, the sponsor, reported $1,292,206 in PAC receipts in the 2026 cycle. $15,000 of that came from 2 PACs tied to these lobbying clients.
- Edison Electric Institute — $4,248,610 on 2 filings
- Duke Energy Corporation — $2,280,000 on 1 filing
- Honeywell International — $1,610,000 on 1 filing
- Entergy Services LLC — $610,000 on 1 filing
- American Electric Power Company, Inc. and Affiliated Corporations — $380,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the full bill text on Jun 8, 2026; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Mar 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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