Congress mandates data centers go off-grid—or pay $1M daily

What it does

This bill requires large data centers (20+ megawatts) to generate their own power or face a $1 million-per-day penalty, with a 10-year grace period for existing facilities if they can prove they won't raise residential electricity rates. New data centers must be completely off-grid immediately. The bill also mandates public disclosure of data center power usage, real estate deals, and utility agreements, with the Department of Energy studying whether existing data centers can stay grid-connected without harming residential ratepayers.

Why we flagged it

The bill's core mechanism is a mandatory off-grid power requirement for data centers paired with a residential ratepayer protection standard. While framed as consumer protection, it functions as a structural constraint on data center operations that may have unintended consequences for the very ratepayers it aims to shield.

What the text implies

• Off-grid mandate may incentivize data center relocation to regions with cheaper on-site power generation (fossil fuels, nuclear), potentially concentrating environmental externalities in rural or less-regulated areas rather than distributing them across the grid.
• The 10-year grace period for existing data centers creates a cliff: after 2036, all grid-connected facilities must immediately transition to captive power or shut down, potentially causing sudden supply shocks and stranded infrastructure.
• Rate Effect Credit mechanism allows data centers to 'buy' grid access by paying utilities, effectively creating a new revenue stream for utilities that may be passed through to all ratepayers, not just residential ones, undermining the stated residential-prioritization goal.
• Mandatory project labor agreements for power plant construction will increase capital costs for on-site generation, making off-grid compliance more expensive and potentially accelerating relocation to states with lower labor standards.
• Public disclosure of utility agreements and subsidies may expose state/local tax incentives and utility cost-sharing arrangements, potentially triggering legal challenges or political backlash that destabilizes existing data center investments.

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

Who it affects

Residential ratepayers gain explicit legal protection against cost-shifting from data center power demands, and transparency requirements expose previously hidden utility deals. However, the off-grid mandate may accelerate data center relocation away from regions with cheaper grid power, potentially raising electricity costs in affected areas and reducing economic development—effects that could ultimately harm the same residential ratepayers the bill aims to protect.

Who stands to gain

• On-site power generation companies (solar, wind, battery, nuclear vendors)
• Project labor unions (construction labor agreements mandated)
• Utilities (new Rate Effect Credit revenue stream)
• Data centers relocating to regions with cheaper captive power

Named in the bill

Department of Energy (DOE), Data centers (20+ megawatt facilities), Electric utilities, Residential ratepayers, Covered entities (private data center operators), Public Utility Regulatory Policies Act (PURPA), Energy Independence and Security Act of 2007, Carl Levin and Howard P. Buck McKeon National Defense Authorization Act

Where it stands

2 cosponsors: 1 Democrats, 1 Republicans.

• Feb 11, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Feb 11, 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

8 lobbying clients named this bill on 9 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $6,068,610 in lobbying spend. A filing names 50 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 88% of bills with at least one filing.

Josh Hawley, the sponsor, reported $68,000 in PAC receipts in the 2026 cycle.

• Edison Electric Institute — $4,248,610 on 2 filings
• Entergy Services LLC — $610,000 on 1 filing
• American Electric Power Company, Inc. and Affiliated Corporations — $380,000 on 1 filing
• Puget Sound Energy — $350,000 on 1 filing
• Pinnacle West Capital Corporation — $270,000 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.