Senate Sinks Data Center Energy Cost Bill Ahead of Midterms

The Senate sank a bill aimed at shielding homeowners from data center energy cost after Democrats argued it didn't do enough.

Senators blocked the Ratepayer Protection Act on Wednesday. The bill's quick passage in the House followed widespread backlash against data center buildouts, which has emerged as a major issue for the midterms.

Polls show broad discontent that the pace of data center construction could drive up power costs, raise land prices, and create environmental problems.

The bill "requires state utility regulators and nonregulated utilities to consider implementing a standard" for utilities to bill data centers and large electric users. That standard, the bill says, should require those users to completely pay for the extra infrastructure their demand creates, as well as the impacts if they stop using the power.

That way, the electric costs aren't passed down to the customer.

The House passed the bill 417-3 earlier this month. But in the Senate, it was hit with opposition from Democrats who don't believe it does enough with the voluntary standard. Democrats have put forth their own bill, the Guaranteeing Rate Insulation from Data Centers (GRID) Act, which carries requirements and penalties.

Ohio GOP Sen. Jon Husted's Ratepayer Protection Act bill "guarantees the large users of energy and electricity such as data centers, that they would end up paying the full cost of their electricity use, not the consumers," Majority Whip Sen. John Barrasso (R-WY) said on the Senate floor. "This will block costs going up for families."

Senate Minority Leader Chuck Schumer (D-NY) said on the Senate floor on Tuesday that the bill won't protect ratepayers because it's optional.

"Donald Trump is asleep at the wheel when it comes to reining in unchecked AI," Schumer said. "Americans are demanding real guardrails on AI and data centers, but all the Republicans offer is a toothless messaging bill. The bill is a fraud."

Trump and AI leaders meet

Meanwhile, Trump and House Speaker Mike Johnson (R-LA) met with AI business leaders, including Meta CEO Mark Zuckerberg, Elon Musk, and Nvidia CEO Jensen Huang at the White House on Tuesday.

After the meeting, Trump said executives discussed different ideas for incentives they can bring to the communities where they build. But he reiterated that he wanted data centers built in the U.S., not other countries.

"You're going to see data centers are going to be very popular," Trump said.

"This is a group that loves local communities, they love our country," Trump said. "And they're going to work with local communities for the data centers in particular, and they're going to work to make the community happy."

Among ideas he threw out during a brief Q&A, Trump suggested "supplying oil and gas, might be supplying education, it may be helping teachers along financially, it may be helping people along financially."

Trump has been a vocal critic of guardrails on the industry, which he calls "super intelligence."

He unveiled an AI-powered platform, America.gov, to help Americans navigate federal government websites. The White House said it has invested $5 billion in its efforts to use the technology to advance science, medicine, and business.

The White House also released an accord signed by those major companies committing to developing the technology safely. It includes internal controls, monitoring of the technology, and risk reviews, both internal and external. Zuckerberg called it a "start" with regulating the technology.

Asked later on if the measure was binding, Trump replied, "I think it's morally binding."

Regulatory questions

The Wednesday vote was a cloture motion, which requires a two-thirds vote of the Senate to pass. Ultimately the vote was 57-43, generally along party lines.

The Senate is racing against the clock to pass legislation ahead of the midterms. But even within the two parties, lawmakers have a wide range of opinions on how to regulate artificial intelligence and its physical infrastructure.

A CNN poll released last week found two-thirds of voters consider data centers an important issue in their coming votes. Public opinion polls this year have shown Americans turning sharply against data centers.

Congress has advanced a few ideas for how to regulate the industry, including a measure to establish a new select committee on artificial intelligence. Regulating data centers could be one of its edicts.

But Husted said on Wednesday that the bill is the only data center–related legislation that could come to Trump's desk before the midterms. He also emphasized its bipartisanship in the House. But Schumer said that data centers need required safety standards.

On the Senate floor, Sen. Mark Warner (D-VA) said a "comprehensive approach" should include stronger oversight of data centers. Both he and Sen. Ted Cruz (R-TX) debated the larger approach to regulating artificial intelligence and its economic benefits versus safety concerns. Both sides said there is room for working together on AI safety measures.

"I've not talked to a single member on either side of the aisle that doesn't think we need to move," Warner said. "I don't think the option of simply relying on the goodwill of these companies will be enough."