Data Center Fair Share Act
- Sponsor
- Rep. Subramanyam, Suhas [D-VA-10]
- Committees
- Transportation and Infrastructure Committee (primary)
- Last action
- Sep 8, 2026
Bottom line
This bill shifts the financial burden of significant grid upgrades for large energy consumers, primarily data centers, from the general ratepayer base to the large-load customers themselves, with a strong federal enforcement mechanism.
What it actually does
This bill amends the Public Utility Regulatory Policies Act of 1978 (PURPA) to establish federal standards requiring electric utilities to recover the full, incremental costs of infrastructure upgrades necessary to serve "large-load customers" directly from those customers. It defines large-load customers as non-residential consumers with a peak electric demand of 100 megawatts or more at a single site or campus. Furthermore, the bill mandates that states adopt these standards within two years or face a 100% withholding of federal highway funds.
Proponents argue
Proponents argue this bill ensures fairness by preventing general ratepayers from subsidizing the substantial infrastructure costs driven by rapidly growing, high-demand industries like data centers. They contend it promotes economic efficiency by internalizing costs to those who generate them and encourages responsible energy consumption by large users, ultimately protecting residential and small business consumers from undue rate increases.
Opponents contend
Opponents might argue that this bill could deter economic development by significantly increasing the cost of establishing large industrial facilities, potentially driving data centers and other large-load customers to states or even countries without such stringent cost recovery mechanisms. They may also criticize the federal government's use of highway funds as a coercive measure, infringing on state regulatory authority over utilities and potentially harming critical transportation infrastructure.
The bill is short and relatively easy to read, allowing ample time for stakeholders to understand its provisions before state implementation deadlines.
Section 2(a), amending 16 U.S.C. 2621(d) by adding paragraph (22)(A)
Mandate Full Cost Recovery for Large-Load Upgrades
This provision requires that electric utilities charge "large-load customers" (non-residential consumers with 100 MW+ peak demand) rates designed to recover the full, incremental costs of any generation, transmission, or distribution upgrades necessary to serve their load. This cost recovery must occur even if the large-load customer later terminates their contract or ceases purchasing electricity, ensuring utilities are not left with stranded costs.
Supporters argue
Supporters contend this ensures that the entities driving the need for significant infrastructure investments bear the full financial responsibility, preventing other ratepayers from subsidizing their growth. This promotes fairness and economic efficiency in utility rate structures.
Critics contend
Critics might argue this could make states less attractive for large industrial and technological investments, as the upfront and ongoing costs for power infrastructure would be significantly higher. This could stifle economic growth and job creation in states that adopt the standard.
Tradeoffs
This provision balances the principle of cost causation (those who cause costs should pay) against potential impacts on economic development and competitiveness for attracting large energy consumers.
Section 2(a), amending 16 U.S.C. 2621(d) by adding paragraph (22)(B)
Require Upfront Payment or Class Assignment for Large-Load Upgrades
Before an electric utility undertakes any generation, transmission, or distribution upgrade for a large-load customer (or group of customers), it must either require the customer(s) to cover the full costs through a "contribution in aid of construction" (CIAC) or assign the full costs to a class of large-load customers. This ensures costs are covered before construction begins, mitigating financial risk for the utility.
Section 2(a), amending 16 U.S.C. 2621(d) by adding paragraph (22)(C)
Define "Large-Load Customer"
This section defines a "large-load customer" as a non-residential electric consumer that, on or after the bill's enactment date, requests or enters into an agreement for electric service for one or more facilities with an aggregate peak electric demand of 100 megawatts or more at a single site or campus. This threshold specifically targets very high-demand users, such as large data centers.
Section 2(b)(1), amending 16 U.S.C. 2622(b) by adding paragraph (9)
Mandate State Action on New Standards
This provision sets deadlines for State regulatory authorities (for regulated utilities) and nonregulated electric utilities to consider and make determinations regarding the new large-load customer standards. They must commence consideration within 1 year of the bill's enactment and complete the consideration and determination within 2 years.
Section 3(a), adding new Section 180 to Chapter 1 of Title 23, U.S. Code
Federal Highway Fund Withholding for Non-Adoption
This provision mandates that the Secretary of Transportation withhold 100% of federal highway funds apportioned to any state for each fiscal year after the first fiscal year beginning after the bill's enactment, if that state has not implemented the new large-load customer standards. This acts as a powerful incentive for state compliance.
This provision exempts states from the mandatory consideration and determination deadlines if, before the bill's enactment, they have already implemented a comparable standard for electric utilities or if their state legislature has voted on the implementation of such a standard.
Section 2(b)(3), amending 16 U.S.C. 2622 by adding subsection (i)
Why it matters:This is standard legislative practice for technical adjustments and exemptions related to new mandates. It's not necessarily evasive, but rather a practical way to integrate the new policy with existing state actions.
Case for: Supporters would argue this provision acknowledges and rewards states that have already taken proactive steps to address the issue, preventing redundant regulatory processes and respecting state sovereignty by not imposing unnecessary federal mandates.
Case against: Critics might argue that the definition of "comparable standard" could be open to interpretation, potentially leading to disputes between states and federal authorities, or allowing some states to avoid the spirit of the law with loosely defined existing policies.
Estimated impact: This provision reduces administrative burden for a subset of states that have already acted on similar utility cost recovery issues, potentially impacting a few states by exempting them from new federal deadlines.