On Sept. 16, 2026, the House passed the bipartisan Ratepayer Protection Act, H.R. 9340, by a vote of 417-3. The bill, introduced by Rep. Gabe Evans, R-CO, and Rep. Kathy Castor, D-FL, intends to address concerns that the cost of serving new data center electricity demands could be shifted to existing utility customers. An effort to quickly advance the House-passed measure in the Senate on Sept. 17 was unsuccessful, and the bill remains pending in the Senate.

The bill would amend PURPA to establish a new federal standard for certain large-load customers that states and nonregulated utilities would be required to consider. Under the proposed standard, rates for qualifying customers would be designed to recover the full incremental cost of generation, transmission and distribution upgrades needed to serve their load. The standard would also require utilities to obtain financial assurances or contributions from the customer before undertaking those upgrades.

Importantly, the bill would not require states to adopt the standard or impose a uniform federal rate. State regulators would instead consider the standard and make their own determination, preserving their existing authority to adopt or reject federal ratemaking standards.

This marks one of Congress’s first major legislative efforts to address the costs associated with rapid data center and AI growth. The issue has become increasingly prominent ahead of the November elections as concerns over data center development and its potential effect on utility costs have gained attention among voters, particularly in competitive races. Lawmakers in both parties have faced pressure to respond, and the measure ultimately passed the House with overwhelming bipartisan support.

Key Provisions

The Ratepayer Protection Act would:

• Apply to non-residential customers that request or enter into electric-service agreements primarily to operate information technology infrastructure, data storage or computational services, with aggregate peak demand of at least 100 megawatts at a single site or campus.
• Establish a federal standard under PURPA providing that rates for these customers should recover the full incremental costs of generation, transmission, and distribution upgrades necessary to serve their load, including costs remaining if the customer terminates its contract or stops purchasing electricity.
• Under the standard, require utilities to obtain financial assurances or contributions from qualifying large-load customers before undertaking upgrades needed to serve them.
• Require state regulators and nonregulated utilities to begin consideration of the standard within one year of enactment and complete the process within two years.
• Exempt utilities from those procedural deadlines where a state has already implemented or considered a comparable standard, or the state legislature has already voted on one.

What This Means

For companies developing or operating large data centers, the legislation could increase scrutiny of how the costs associated with connecting new large loads to the grid are allocated. If states adopt the contemplated standard, qualifying projects could face more explicit requirements to fund generation and grid upgrades and provide financial assurances against costs that could remain if a project is discontinued or the customer otherwise stops purchasing electricity.

However, the practical impact would vary by state. H.R. 9340 would not create an immediate nationwide cost-allocation requirement. Implementation would instead depend on how individual states respond through utility commission proceedings, large load tariffs and utility service agreements. This makes existing and future state regulatory activity particularly important for developers, utilities, power providers and other companies involved in energy-intensive projects.

More broadly, the legislation reflects growing attention at both the federal and state levels to who pays for new generation and grid infrastructure, what financial assurances large load customers may be required to provide, and how utilities protect against stranded costs. These issues are likely to remain an important part of the policy and regulatory debate surrounding large load growth.

What Happens Next

H.R. 9340 remains pending in the Senate. Republican leadership sought expedited passage by unanimous consent on Sept. 17, but the effort was blocked by an objection from Sen. Martin Heinrich, D-NM. Heinrich has argued that the state-led approach does not go far enough to protect ratepayers and has instead backed his own Guarding Ratepayers from Increased Demand‑costs (GRID) Savings Act, which would impose stronger federal requirements on large electricity users.

The unsuccessful attempt to expedite the bill does not end its consideration, but further action is not likely until after the November midterm elections. The Senate is scheduled to return to regular session on Nov. 9, at which time the chamber could still take up the legislation through the regular legislative process or revisit an agreement to advance it by unanimous consent.

McGuireWoods Consulting will continue to monitor congressional action on the Ratepayer Protection Act and related federal and state developments.