Senate bill would make AI data centers pay for power grid upgrades

Senator Adam Schiff (D-Calif.) has proposed the Energy Cost Fairness and Reliability Act of 2026, targeting the rising electricity demands of AI data centers and other high-power facilities. The bill aims to prevent residential customers from bearing the costs of grid upgrades by requiring large-load facilities—those consuming over 50 megawatts—to cover all transmission infrastructure expenses. Current regulations often shift these costs onto smaller consumers, contributing to rising utility bills. The legislation would establish federal interconnection requirements under the Federal Energy Regulatory Commission (FERC), creating a formal queue system for new large-load connections. Facilities would need to pay 100% of interconnection study costs and upgrade expenses, with no refunds allowed. The bill also prohibits utilities from spreading these costs through tariffs or future rate adjustments. Operators of these facilities would face additional operational demands, including demonstrating demand flexibility to reduce or shift electricity use during grid emergencies. They would also be required to arrange sufficient new power generation to meet their energy needs, ensuring grid reliability. The proposal comes as AI-driven data centers and other high-demand industries strain the power grid, driving up electricity prices in multiple regions. Utilities report increased infrastructure costs to accommodate new loads, and the bill argues these expenses should not be transferred to residential or small business customers. Tech companies like Microsoft, Amazon, and Google are already investing in dedicated power solutions, including nuclear and renewable energy projects, to support their AI operations. However, the legislation could impose stricter financial and operational standards on all large energy users, regardless of their existing power arrangements.