The top Democrat on the Senate Energy and Natural Resources Committee is promising an aggressive legislative agenda to address rising electricity demand from data centers should his party regain power next year.
In the latest episode of the POLITICO Energy podcast, Sen. Martin Heinrich (D-N.M.) teased legislation he is releasing Monday designed to prevent data centers from shifting infrastructure costs onto utility customers, which he said would be a top priority should he become chair next year.
Heinrich said his GRID Savings Act, shared exclusively with POLITICO, would give “teeth” to voluntary commitments made by Big Tech companies and utilities through the White House’s Ratepayer Protection Pledge by requiring large power users to pay for the infrastructure needed to hook up to the grid.
“These hyperscalers need to get some sobriety and realize that they are not gonna be able to push their costs off on consumers and we should have the teeth to do that,” Heinrich said on the podcast. “Pledges are great, but show me the reality.”
Heinrich also signaled he would look to tackle data centers’ environmental and water use impacts and commitments to local community engagement.
“Water is going to be a giant issue in my state, but honestly, everywhere I look around the country, it’s becoming an issue,” Heinrich said. “So, they need to have the latest, most low water-use technologies. They need to be transparent about what they’re asking for, and they need to bring economic value to communities if they want to get things built.”
But he argued some Democrats are going too far in trying to stop data center development by imposing or threatening moratoriums, which he said could lead development to go to places with little to no rules governing their expansion.
That contrasts with the approach of Rep. Frank Pallone of New Jersey, the top Democrat on the House Energy and Commerce Committee, who recently told POLITICO he would consider pushing a data center moratorium if lawmakers are unable to pass federal guardrails.
“I’m not a fan of the moratorium approach because it will simply push them to the places with the lowest standards, and we don’t want to race to the bottom,” Heinrich said. “If we just put up a wall and say no new data centers, those data centers are gonna get built someplace. And they’re probably gonna get built in the communities with the least ability to push back.”
Heinrich is pushing legislation that he says would fit into Democrats’ agenda to address energy affordability, a top concern for voters in the midterms, by providing relief to consumers facing high utility bills.
“There is zero chance that does not resonate with voters,” Heinrich said of electricity prices that are rising for the first time in decades. “This administration has been intellectually immune to the reality that at every decision point they’re doing things that raise costs with respect to energy,” arguing Trump administration policies to limit solar and wind development are putting upward pressure on power prices.
His new bill would direct the Federal Energy Regulatory Commission to issue rules for large electricity customers connecting to the grid to pay for certain necessary grid upgrades, while incentivizing hyperscalers to voluntarily fund transmission-level upgrades in exchange for receiving transmission service.
The New Mexico Democrat said the bill would impose the same rules that apply to power plants by making companies seeking to get linked to the grid go through a detailed review process, pay for the upgrades needed to connect and put up financial commitments to do so.
“Not only can they not push those costs off on consumers, but they need to be bringing capital to the table for their connections, their transmission, the things that are gonna be necessary to build a stronger, more economically vibrant grid,” Heinrich said.
FERC in June ordered regional grid operators to fix connection rules for data centers or justify current ones — with a signal that protecting ratepayers is important — a move that Heinrich and other senators from both parties characterized as a good first step in addressing the surge of power-guzzling tech infrastructure.
The House Energy and Commerce Committee also recently approved legislation called the Ratepayer Protection Act, H.R. 9340, that would have states consider a federal standard to make sure data centers don’t add to power prices. It’s unclear whether Energy and Natural Resources Chair Mike Lee (R-Utah) will bring it up.
