On Wednesday, September 16, the U.S. House passed H.R. 9340, the Ratepayer Protection Act, by a bipartisan vote of 417–3. The bill aims to prevent residential utility customers from absorbing the energy and infrastructure costs associated with large‑load AI data centers. Sponsored by Rep. Gabe Evans (R‑CO) and Rep. Kathy Castor (D‑FL), the legislation was introduced in June and would amend the Public Utility Regulatory Policies Act of 1978 (PURPA) to establish a new federal standard for customers with energy demands of 100 megawatts or more at a single site.
The bill directs state utility regulators to consider — though not require — a federal standard ensuring that large power users fully cover the costs of new electricity generation, transmission, and distribution upgrades needed to serve data center facilities.
If enacted, the legislation would create optional standards for state regulators evaluating new large‑load customers, including:
Recovery of full, incremental upgrade costs. Large-load customers would be responsible for all incremental infrastructure upgrade costs over an extended period, recovered through a special rate charge or another agreement. This is intended to protect utilities and ratepayers from absorbing upgrade costs, especially if a large-load customer later reduces operations or leaves the system.
Financial assurances. Large-load customers would be required to provide financial guarantees covering any generation, transmission, or other infrastructure needed to serve their demand. This ensures that the fixed costs of serving these customers are not passed on to residential or commercial ratepayers through higher electricity bills.
Legislative Outlook
A companion Senate bill, S. 5028, introduced in July by Sen. Jon Husted (R‑OH), remains stalled in committee. With roughly three weeks left before the Senate recess, the chamber faces a tight timeline to consider the legislation.
The House, meanwhile, adjourned for a seven‑week recess immediately after Wednesday’s vote, following Speaker Mike Johnson’s decision to cancel Thursday’s session to allow members to return home ahead of the midterm elections. The House is not expected to reconvene until the second week of November.
Why It Matters for Cities
Data center growth has become one of the most closely watched issues for city officials nationally, as residents increasingly worry about footing the bill for the electric infrastructure new AI facilities require. The Ratepayer Protection Act marks the first significant congressional response to that concern, and supporters see it as an important initial step in managing surging electricity demand driven by AI development, noting that it builds on the White House's Ratepayer Protection Pledge announced earlier this year.
Critics argue the bill falls short because its standards are voluntary rather than mandatory, and may duplicate policies already in place in some states. Supporters counter that a voluntary framework preserves state and local flexibility, allowing regulators to craft standards tailored to their specific needs while maintaining authority over retail electricity markets, rather than imposing a rigid federal mandate.