The top Democrat on the powerful Energy and Commerce Committee is threatening a nationwide data center moratorium if his party regains the House next year, a cudgel he says he’ll wield to achieve an aggressive reining in of the power-guzzling tech infrastructure.
In an interview, Rep. Frank Pallone of New Jersey had a slightly more conciliatory tone compared to his surprise endorsement last month of a federal pause on data center construction, which made him the highest-ranking federal lawmaker with jurisdiction over energy and the environment to back the idea. He said he wants to go much further on regulating data centers than Republicans and some Democrats are currently willing.
Pallone plans to first pursue “federal guardrails” on data center development through pollution rules, siting standards and ratepayer protections should he once again become chair of the Energy and Commerce Committee next year.
“Fixing this data center crisis is a top priority of mine,” Pallone said. “What we’re really trying to say is that there needs to be guardrails, and that if we can’t achieve that, then the possibility of a moratorium out there is certainly real.”
He contrasted his preferred approach with New York, which under Democratic Gov. Kathy Hochul became the first state to pause new data center permits as her administration considers policies to address concerns about impacts on ratepayers and the environment.
“You could do it either way. You can do what I’m saying, which is that let’s see if we can develop something before we put a moratorium in place. We’re kind of both saying the same thing,” Pallone said.
Aggressive regulation of data centers is unlikely to become law even under a divided government next year. Democrats may have a tougher time retaking the Senate and the Trump administration remains bullish on AI despite steps to curb the impacts of data centers.
Pallone’s comments came days after the Energy and Commerce unanimously approved the Ratepayer Protection Act, H.R. 9340 (119), requiring states to consider adopting a federal standard directing data centers to pay the full cost of the electricity infrastructure needed to serve them.
The relatively modest bill pushed by Chair Brett Guthrie (R-Ky.) is the only major data center energy bill to gain traction on Capitol Hill. Democrats have characterized it as a good first step, while Republicans hope the bill would demonstrate responsiveness to voter backlash toward data centers.
Democrats divided
Pallone dismissed questions on whether his position is out of step with Democratic leaders in Congress, who have stopped short of endorsing a data center moratorium.
It may be problematic for a committee leader to pursue such a contentious policy that’s not in line with most members of their party.
“The bottom line is everyone is concerned about data centers, whether it’s the leadership or it’s rank-and-file members or it’s just everyday Americans,” Pallone said.
Senior Energy and Commerce Democrat Kathy Castor of Florida — who is co-sponsoring the Ratepayer Protection Act with Rep. Gabe Evans (R-Colo.) — said she was not supportive of the moratorium but understood Pallone’s position.
“I was talking to the ranking member, and he explained that back home he’s got local government sending him resolutions all the time opposing [artificial intelligence] data centers,” Castor said. “But I don’t think you can say, ‘We’re going to just stop everything now.’”
House Minority Leader Hakeem Jeffries (D-N.Y.) told POLITICO last month he hadn’t discussed the moratorium with Pallone and stressed, “That’s certainly not a position that I’ve articulated at this moment.”
Senate Minority Leader Chuck Schumer (D-N.Y.), addressing union leaders at an event on Capitol Hill on July 14, said the Democratic caucus “has taken a position that data centers must pay their fair share and promote healthy communities, but we have not said, ‘Don’t build data centers.'”
Probe of tech
Pallone said he came to his decision to call for a nationwide data center moratorium in response to community-level opposition in his central New Jersey district, where he said a half dozen towns have recently either imposed moratoriums or rejected major data center projects.
He pointed to action from New Jersey Gov. Mikie Sherrill, a former moderate House Democrat, who has announced a set of “guardrails” on data centers in an effort to control costs.
“We’re seeing electricity prices skyrocketing, the grid is strained, and there is also a lot of concern about clean air and water pollution, and most states don’t have anything on the books,” Pallone said.
Prompted by that pushback, Pallone directed his committee staff over the last four months to meet with data center companies including Google, Microsoft, Anthropic, Meta, Oracle, Amazon and SpaceXAI to inquire about their projects’ energy consumption, environmental impacts and commitments to local community engagement.
His conversations with companies are ongoing to assess what federal guardrails he would look to put into place to “ensure data centers are not causing harm to communities.”
“We’re trying to get information before we move ahead with any specific legislation,” Pallone said.
Focus on SpaceXAI
But he is already planning to put on notice one of the companies, Elon Musk’s SpaceXAI, whose data centers in the Memphis area have generated controversy for operating gas turbines before seeking air pollution permits.
Pallone sent a letter to Musk on Tuesday — shared first with POLITICO — demanding answers and seeking site visits to the company’s Colossus 1 and Colossus 2 data centers, including analyses and documentation related to the emissions, power consumption and water usage of the projects, and emissions and permitting application details for the turbines.
Pallone said he is not targeting Musk, a top Trump ally, for political reasons. He says SpaceXAI has been the least willing to answer questions compared to other companies his staff met with.
“Most of the companies have been providing a lot of information that’s important and that we’re looking for. But not SpaceXAI,” Pallone said. “It’s not a political exercise because he [Musk] is not being cooperative.”
SpaceXAI didn’t immediately return a request for comment.
Earlier this spring, EPA proposed allowing data centers to begin construction before they secured permits. It has also proposed to curtail federal requirements for public engagement during the permitting process. And this week EPA declared that power generators that don’t sell power to the grid aren’t beholden to Clean Air Act acid rain standards.
“When we talk to our own communities they feel that they’re not being consulted,” Pallone said. “A lot of these facilities are just being built without any real input from the community.”
