Data Center Fairness Fee Act of 2026
- Sponsor
- Rep. Tonko, Paul [D-NY-20]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Sep 16, 2026
Bottom line
This bill imposes new fees on large data centers and cryptocurrency mining operations based on their electricity use and carbon intensity, with revenues directed towards energy assistance and efficiency programs.
What it actually does
This bill amends the Clean Air Act to establish two new charges on "applicable facilities," defined as large data centers and cryptocurrency mining operations. The first charge is a flat $0.01 per kilowatt-hour of electricity consumed annually, starting in 2027. The second is an additional $0.05 per kilogram of carbon dioxide equivalent emissions for facilities with an average carbon intensity greater than 0.10, starting in 2028. Funds collected are to be allocated to states and Indian Tribes for low-income energy assistance, energy efficiency, and demand reduction programs.
Proponents argue
Proponents argue the bill addresses the rapidly growing energy consumption and associated environmental impact of data centers, particularly those engaged in energy-intensive cryptocurrency mining. They contend it incentivizes cleaner energy sources for these facilities and provides much-needed funding for programs that help vulnerable populations with energy costs and promote broader energy efficiency.
Opponents contend
Opponents might argue that these charges could increase operational costs for data centers, potentially leading to higher prices for digital services or driving these facilities overseas, hindering technological innovation and job creation in the U.S. They may also contend that the charges could disproportionately affect certain regions or types of data centers, creating an uneven playing field.
The bill is relatively short and its core provisions are straightforward, allowing a reader to quickly grasp its main intent and mechanisms.
Section 2, adding new Clean Air Act Section 139(a)
Annual Electricity Consumption Charge
Starting in calendar year 2027, owners or operators of "applicable facilities" (large data centers and cryptocurrency mining operations) must pay a charge of $0.01 for every kilowatt-hour of electricity they consume annually. This charge applies to all electricity consumed, including that generated on-site behind the power meter.
Supporters argue
Supporters argue this charge creates a baseline incentive for energy efficiency and acknowledges the significant grid strain and environmental footprint of these facilities, ensuring they contribute to mitigating their impact.
Critics contend
Critics might contend this is a new tax on essential digital infrastructure, which could stifle innovation, increase the cost of digital services, and make the U.S. less competitive for data center investment.
Tradeoffs
This provision balances the desire to internalize the environmental costs of high energy consumption with concerns about economic competitiveness and the potential for increased costs for consumers.
Section 2, adding new Clean Air Act Section 139(b)
Carbon Intensity-Based Electricity Charge
Beginning in calendar year 2028, facilities with an average carbon intensity greater than 0.10 (meaning their electricity comes from relatively carbon-intensive sources) will pay an *additional* charge of $0.05 per kilogram of carbon dioxide equivalent emissions associated with their total electricity consumption. The EPA will define methods for calculating these emissions, including on-site generation and grid electricity, with specific rules for power purchase agreements.
Section 2, adding new Clean Air Act Section 139(c)
Data Center Reporting Program
Not later than one year after enactment, the EPA must issue regulations establishing a reporting program. This program will require owners and operators of applicable facilities to monitor, report, and keep records on their electricity consumption (including on-site generation), water consumption, greenhouse gas emissions, and other metrics deemed appropriate by the Administrator. The regulations must ensure data completeness, consistency, transparency, accuracy, precision, and reliability.
Section 2, adding new Clean Air Act Section 139(d)
Allocation and Eligible Uses of Collected Charges
Funds collected from the charges will be allocated by the EPA to States and Indian Tribes using a distribution formula similar to that for Part D of Title III of the Energy Policy and Conservation Act. These funds must be used for specific programs, including the Low-Income Home Energy Assistance Act (LIHEAP), Inflation Reduction Act energy efficiency programs (sections 50121(c) or 50122(c)), or the Energy Conservation and Production Act (Part A of Title IV). Funds can also be used for other Administrator-approved programs that reduce peak electricity demand, improve energy efficiency, or reduce residential utility bills.
If the Administrator is unable to verify reported data provided by an applicable facility regarding its electricity's carbon intensity, the Administrator *shall assume* that the carbon intensity of the electric generating unit supplying the facility is equal to the *highest* carbon intensity of any electric generating unit operating in the United States in the relevant calendar year.
Section 2, adding new Clean Air Act Section 139(b)(4)
Why it matters:It is standard legislative practice to include enforcement mechanisms and default assumptions for data integrity within regulatory frameworks, ensuring compliance and preventing intentional misreporting.
Case for: Proponents argue this provision is essential to ensure accurate reporting and prevent facilities from intentionally submitting incomplete or misleading data to avoid higher charges. It creates a strong incentive for robust monitoring and reporting.
Case against: Critics might contend that this "highest carbon intensity" assumption is an overly punitive measure that could unfairly penalize facilities for minor reporting errors or technical difficulties, leading to exorbitant and disproportionate charges.
Estimated impact: Could result in significantly higher charges for facilities with data reporting issues, potentially millions of dollars depending on electricity consumption and the highest carbon intensity value.
The term "applicable facility" is defined as any facility (or two or more facilities within 10 miles of each other, owned/operated by the same entity) that, in aggregate, has more than 50 megawatts of installed information technology nameplate capacity AND primarily contains electronic equipment for processing, storing, and transmitting digital information, OR is used to mine or create cryptocurrencies or other blockchain-based digital assets.
Section 2, adding new Clean Air Act Section 139(e)(1)
Why it matters:It is standard legislative practice to define terms at the end of a section or bill, but its placement can make it less immediately apparent to a casual reader who is subject to the new rules.
Case for: Proponents argue this definition is crucial for precisely targeting the intended facilities (large-scale data centers and crypto miners) that are significant electricity consumers, ensuring the charges apply where the environmental impact is greatest.
Case against: Critics might argue the 50 MW threshold could be arbitrary or that the inclusion of "facilities within 10 miles" could inadvertently capture or exclude certain operations, leading to uneven application. The specific inclusion of crypto mining might be seen as targeting a particular industry.
Estimated impact: This definition determines the universe of entities subject to the charges, potentially affecting hundreds of large data centers and cryptocurrency mining operations across the U.S.
The Administrator's requirements for calculating greenhouse gas emissions associated with electricity consumed by applicable facilities must specifically account for: (i) electricity produced at or directly provided to the facility; (ii) electricity from power purchase agreements (PPAs) or bilateral agreements if it is time-matched to consumption, located in the same region, and from an electric generating unit placed into service not more than two years before the applicable facility; and (iii) grid electricity, accounting for its time-matched, average carbon intensity in the region.
Section 2, adding new Clean Air Act Section 139(b)(3)(B)
Why it matters:These are technical details necessary for accurate and robust implementation of the carbon intensity charge, often placed in sub-clauses to avoid cluttering the main provisions.
Case for: Proponents argue these detailed requirements ensure a robust and accurate accounting of greenhouse gas emissions, preventing loopholes and ensuring that only truly clean and additionality-focused energy sources are credited towards reducing a facility's carbon intensity.
Case against: Critics might argue that the "time-matched" and "new generating unit" requirements for PPAs are overly restrictive, making it difficult for facilities to procure clean energy credits and potentially disincentivizing existing clean energy sources. The complexity could also lead to implementation challenges.
Estimated impact: Significantly influences how data centers procure and account for their electricity, potentially driving investment in new, regionally-located, time-matched renewable energy projects to avoid higher charges.