Data centers must now pay full grid costs—and prove they can cut power on demand

What it does

This bill requires the Federal Energy Regulatory Commission (FERC) to create a new interconnection queue system specifically 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 and the ability to curtail operations, and either construct new power generation or arrange for it. The bill prioritizes applicants who commit to prevailing wages, apprenticeships, labor peace agreements, or battery backup systems. It also directs the Department of Energy to collect data on data centers and establish an AI testbed to study energy-efficient computing.

Why we flagged it

The bill's operative mechanism is a cost-allocation rule that shifts 100% of interconnection and network-upgrade costs to large load customers (data centers) while imposing operational constraints (demand flexibility, new generation requirements). Labor standards and prevailing-wage requirements are secondary prioritization criteria, not the primary mechanism. The bill is fundamentally about who pays for grid infrastructure expansion driven by AI and data-center growth.

• Section (i) requires data-center owners to submit energy, water, and AI-workload data to DOE; unrelated to interconnection procedures or cost allocation.
• Section (j) directs DOE to establish a data-center-scale AI testbed at a National Laboratory; research infrastructure unrelated to FERC interconnection rules.

What the text implies

• Demand-flexibility and curtailability requirements may force data centers to reduce operations during peak demand, potentially degrading service quality for cloud customers and AI inference users during grid stress events.
• The 100% cost-shifting to large loads may accelerate data-center siting decisions toward regions with lower baseline infrastructure costs, concentrating grid stress in specific areas rather than distributing it.
• Labor-peace-agreement prioritization (Section 5(iii)) may deter non-union data-center operators from seeking interconnection, effectively favoring unionized or union-friendly operators—a labor-policy outcome embedded in grid regulation.
• The bill's requirement that large loads construct or arrange new generation (Section 4(A)(ii)) may incentivize data centers to build or contract for fossil-fuel generation if renewable capacity is unavailable, potentially locking in carbon-intensive infrastructure.
• DOE data collection on data-center energy use and AI workloads (Section (i)) creates a federal surveillance mechanism for proprietary AI training and inference operations, with FOIA exemptions protecting confidentiality but centralizing sensitive competitive data at DOE.

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

Who it affects

Ordinary citizens benefit from cost-shifting that prevents data-center infrastructure expenses from being spread to residential ratepayers, and from labor standards that protect construction wages. However, the bill may increase electricity costs for data centers, which could be passed through to consumers of AI services and cloud computing, and the demand-flexibility requirements may reduce grid stability if not carefully implemented. The net effect on typical households is unclear without know

Who stands to gain

• Transmission providers and regional transmission organizations (RTOs/ISOs) — gain authority to set i
• Renewable energy developers and battery storage manufacturers — prioritization for colocated facilit
• Labor unions and apprenticeship programs — prevailing-wage and apprenticeship requirements increase
• Existing electricity customers (residential, small commercial) — protected from cost-shifting via 10

Named in the bill

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

Where it stands

1 cosponsor: 1 Democrats.

• May 18, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• May 18, 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

6 lobbying clients named this bill on 6 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $2,849,193 in lobbying spend. A filing names 58 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 82% of bills with at least one filing.

Adam Schiff, the sponsor, reported $54,400 in PAC receipts in the 2026 cycle.

• Edison Electric Institute — $1,689,193 on 1 filing
• American Electric Power Company, Inc. and Affiliated Corporations — $380,000 on 1 filing
• Puget Sound Energy — $350,000 on 1 filing
• Firstenergy Corp — $290,000 on 1 filing
• Portland General Electric — $90,000 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.