No Harm Data Centers Act
- Sponsor
- Rep. Landsman, Greg [D-OH-1]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Mar 20, 2026
Bottom line
The bill shifts the regulatory oversight of electricity rates for large data centers to FERC, aiming to ensure these energy-intensive facilities bear the full costs of their grid impact, while also promoting transparency in their development and assessing their broader environmental footprint.
What it actually does
This bill grants the Federal Energy Regulatory Commission (FERC) sole authority to approve retail rates for electricity sold by most electric utilities to large data centers, requiring these rates to include the full costs of grid infrastructure and generation needed to serve them. It prohibits shifting these costs to residential and small commercial customers. Additionally, it limits the enforceability of predispute nondisclosure clauses against public officials regarding data center construction and mandates an EPA assessment of data centers' environmental and public health impacts.
Proponents argue
Proponents argue that data centers impose significant, often hidden, costs on the electric grid, leading to higher electricity prices and necessary infrastructure investments that are currently subsidized by residential and small commercial customers. They contend this bill ensures fairness by making data centers pay their 'fair share,' thereby protecting ordinary consumers. Furthermore, supporters believe increasing transparency around data center construction and assessing their environmental impacts are crucial steps for responsible development.
Opponents contend
Opponents might argue that granting FERC retail rate authority over a specific customer class represents an overreach of federal power into traditionally state-regulated areas, potentially creating regulatory uncertainty and disincentivizing data center development in the U.S. They may also contend that the 'full cost' allocation could disproportionately burden a critical industry, hindering technological innovation and economic growth, and that existing state regulatory frameworks are sufficient to address cost allocation concerns.
The bill is relatively short and clearly structured, making it accessible for an informed reader to evaluate its core provisions within a reasonable timeframe.
Section 3(a), amending Section 3 of the Federal Power Act (16 U.S.C. 796)
New Definition of 'Data Center'
This provision adds a new definition for 'data center' to the Federal Power Act. It defines a data center as any facility or group of facilities behind a single point of interconnection that primarily contains electronic equipment for processing, storing, and transmitting digital information, and has a peak electricity demand greater than 50 megawatts. This threshold is critical for determining which entities fall under the bill's new regulatory scope.
Supporters argue
Supporters argue that a clear, high-threshold definition is necessary to target only the largest, most energy-intensive data centers that significantly impact the bulk-power system, ensuring the regulatory burden is focused where it is most needed to address cost-shifting.
Critics contend
Critics might argue that the 50-megawatt threshold is arbitrary or too low, potentially capturing facilities that do not exert a disproportionate burden, or that it could be easily circumvented by splitting facilities to stay below the threshold.
Tradeoffs
The tension lies in setting a threshold that effectively targets significant energy consumers without inadvertently capturing smaller, less impactful operations or creating loopholes for evasion.
Section 3(b), inserting new Section 224 into the Federal Power Act
FERC Authority Over Data Center Retail Rates
This provision grants the Federal Energy Regulatory Commission (FERC) the sole authority to approve retail rates and charges for electricity sold by most electric utilities to data centers, starting 90 days after enactment. This is a significant shift, as retail rates are typically regulated by state public utility commissions. FERC is mandated to ensure these rates are 'just and reasonable' and not unduly discriminatory.
Section 3(b), new Section 224(b) of the Federal Power Act
Full Allocation of Costs to Data Centers
Any retail rate approved by FERC for data centers must include the full costs associated with their impact on the electric grid. This includes the full costs of constructing, upgrading, and expanding transmission or distribution facilities for interconnection, ensuring reliability during peak demand, and constructing, upgrading, and expanding generating facilities for reliability during periods of increasing data center demand.
Section 3(b), new Section 224(c) of the Federal Power Act
Prohibition on Cost-Shifting
This subsection explicitly prohibits covered electric utilities from shifting the costs identified in Section 224(b) (related to data center interconnection, reliability, and generation) onto the retail rates or charges for any customer other than a data center. This reinforces the bill's primary goal of protecting residential and small commercial customers.
Section 4
Limitation on Judicial Enforceability of Predispute Nondisclosure Clauses
This section makes predispute nondisclosure clauses judicially unenforceable against public officials with respect to the construction of a data center. This means that public officials cannot be legally bound by such clauses, allowing them to disclose information related to data center construction, even if they had previously agreed to confidentiality. It also clarifies that state laws providing greater protections are not superseded.
Section 5
Assessment of Environmental and Public Health Effects of Data Centers
This section directs the Administrator of the Environmental Protection Agency (EPA) to seek an agreement with the National Academies to conduct a comprehensive assessment of data centers' impacts on the environment and public health. The assessment must cover noise and air pollution, water consumption and supply, carbon emissions, and electronic waste. The National Academies are also tasked with developing mitigation recommendations and submitting a report to Congress within 180 days of the Act's enactment.
This conforming amendment adds the new Section 224 (Ensuring Data Centers Pay Their Fair Share) to the list of sections that are not subject to the general limitation on FERC's jurisdiction over facilities used for local distribution or for the transmission of electric energy in intrastate commerce. This ensures FERC's new retail rate authority over data centers is not undermined by existing jurisdictional carve-outs.
Section 3(d), amending Section 201(e) of the Federal Power Act (16 U.S.C. 824(e))
Why it matters:This is standard legislative practice to ensure new provisions align with existing statutory frameworks, rather than an attempt to hide its impact.
Case for: Supporters would argue this amendment is essential to make the bill's core provisions effective, preventing legal challenges that could otherwise argue FERC's authority over data center retail rates is limited by other parts of the Federal Power Act.
Case against: No direct case against a conforming amendment itself, but critics of FERC's expanded retail rate authority would see this as solidifying that expansion.
Estimated impact: Ensures the enforceability and scope of FERC's new regulatory authority over data center retail rates, which is a high impact on the regulatory landscape.
This subsection specifies that the new FERC authority over data center retail rates 'shall not apply within the area referred to in section 212(k)(2)(A).' Section 212(k)(2)(A) refers to the Electric Reliability Council of Texas (ERCOT) region. This means data centers within the ERCOT footprint would not be subject to FERC's new retail rate approval authority.
Section 3(b), new Section 224(d) of the Federal Power Act
Why it matters:This is standard legislative drafting for referencing specific, previously defined regions or entities, but the use of a cross-reference requires familiarity with the Federal Power Act to immediately understand its significance.
Case for: Supporters of this carve-out would argue that ERCOT operates as an energy island largely outside of federal jurisdiction, and its unique regulatory structure should be preserved. They might contend that applying federal retail rate authority there would create unnecessary conflicts and disrupt a functioning market.
Case against: Critics might argue that exempting ERCOT creates an uneven playing field, potentially incentivizing data centers to locate in Texas to avoid federal oversight and cost allocation requirements, thereby shifting the problem rather than solving it nationally.
Estimated impact: Exempts a significant portion of the U.S. electricity market, including a state with substantial data center development, from the bill's core regulatory changes, leading to a high impact on the geographic scope of the bill.