Sen. Adam Schiff (D-CA) has introduced legislation that would require large electricity users such as AI data centers to pay the full cost of power grid upgrades needed to support their operations, marking one of the most aggressive federal responses yet to growing public concerns over the impact of the AI infrastructure boom on energy prices and grid reliability.
The proposed “Energy Cost Fairness and Reliability Act of 2026” comes amid mounting backlash from communities, consumer advocates and state officials over the rapid expansion of hyperscale data centers and their enormous electricity demands. Critics increasingly argue that ordinary ratepayers are being forced to subsidize infrastructure built primarily to support artificial intelligence systems operated by some of the world’s largest technology companies.
In a press release announcing the bill, Schiff said the measure is intended to ensure that “hard-working Americans should not be left to foot the tab for rising energy costs” caused by the data center buildout.
“Our nation is witnessing a generational increase in energy demand with the buildout of data centers,” Schiff said in a statement. “My Energy Cost Fairness and Reliability Act would protect ratepayers from rising costs by ensuring that companies are paying their fair share for their energy use and implementing critical modernizations to ensure we can protect against blackouts.”
The legislation would apply to facilities with peak electricity demand exceeding 50 megawatts, a category that includes many hyperscale AI and cloud computing data centers. Under the proposal, such facilities would be required to cover 100% of the costs associated with transmission upgrades, interconnection studies and related network infrastructure needed to connect them to the grid. Utilities and transmission operators would be barred from passing those costs along to residential or business customers through future rate increases.
The bill would also direct the Federal Energy Regulatory Commission (FERC) to establish a formal “load interconnection queue” process modeled after the existing system used for new power plants seeking grid connections. Large-load customers would be required to pay all interconnection study expenses and network upgrade costs on a nonrefundable basis.
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The measure goes beyond cost allocation. It would require energy-intensive facilities to demonstrate “demand flexibility,” allowing grid operators to reduce or shift data center power consumption during periods of grid stress or high demand. The proposal also would encourage projects paired with battery storage and require operators to secure sufficient generating resources to meet their own energy needs.
Additional provisions would permit data centers to use non-firm transmission service, allowing operators to curtail electricity usage during peak demand periods and send excess self-generated power back to the grid. The bill would also prohibit large-load facilities from diverting electricity from existing power plants already serving consumers.
The legislation arrives as local and state resistance to large data center developments continues to intensify across the country. Communities in states including Michigan, New Jersey, Virginia and elsewhere have raised concerns over electricity demand, water usage, land consumption and rising utility bills tied to AI infrastructure expansion. Utilities in several regions have already sought major rate increases linked in part to anticipated grid investments needed to support new data center capacity.
At the same time, many major technology companies are increasingly pursuing dedicated energy strategies to support AI operations. According to a Consumer Affairs report, companies including Microsoft, Amazon, Google and Meta are investing in or partnering on nuclear, natural gas and other energy generation projects to secure long-term electricity supplies for their data center operations.
Schiff argued the legislation seeks to balance continued U.S. leadership in artificial intelligence with growing public concern over who bears the cost of powering that expansion.
“Artificial Intelligence is already deeply impacting our society, economy, and national security, and it is critical that we maintain our international leadership,” Schiff said. “However, that growth cannot come at the cost of consumers or society. There needs to be guardrails that protect Americans’ pocketbooks.”
