Who Pays for AI Data Center Costs? House Says Big Tech, Not Consumers

The House successfully passed its first major legislation on artificial intelligence to ensure big tech pays for its energy usage, rather than passing costs onto the American consumer. The Ratepayer Protection Act passed with overwhelming bipartisan support Wednesday night by a vote of 417-3.

The data center operation legislation was brought forward by Rep. Gabe Evans, R-Colo., who says it isn’t just a cost-savings bill, but also a national security bill that will protect American data from communist China.

The Ratepayer Protection Act requires state public utility commissions to consider federal guardrails for the construction and operation of new data centers and artificial intelligence centers. With the increase in data center construction, Americans fear the operating costs for these large facilities will eventually be passed on to them.

“Done correctly, data centers can actually lower the cost of electric rates because they’re investing in more generation, more transmission, more distribution,” Evans told the Daily Signal.

“They have the ability to basically throttle back their demand during peak hours, which is typically in the afternoons, and so if they’re putting money into the grid, but then they’re also throttling back their usage when everybody else is, requiring electricity and peak demand, that’s actually how you get rate reductions,” he continued.

To deliver ratepayer protections, the bill does two things. First, it directs companies to not “pass costs onto other electric utility rate payers,” and second, it directs state regulators to have those companies prove they are financially secure to ensure they don’t leave the costs of a partially finished project to someone else.

But Evans says it’s much more.

“It’s a national security bill. It’s a consumer protection bill and it’s a cost-saving bill,” Evans told the Daily Signal. “Because it screens out the bad actors, it puts common-sense regulations around how we build out digital infrastructure in the United States, but it also gives a pathway forward for us to have that digital infrastructure here so that we can beat China.”

Evans highlighted that without federal regulations that support data center infrastructure and protect ratepayers, China will beat America in the race.

“We have to have the digital infrastructure in the United States to keep American data in the United States. Because if it doesn’t live here, it’s going to live somewhere and the next most likely location, is communist China,” he continued.

Emphasizing the importance of Americans’ data remaining in America, Evans warned of Chinese laws that would allow their government to “data mine and exploit” Americans.

Evans also noted that, by doing data centers right, this bill will deliver jobs and millions in sales tax revenue to local economies. In addition to normal construction jobs data centers will bring, they will need nearly a billion dollars’ worth of computer chips.

“Municipalities in my district, they have 3%, 4% sales tax. Of a billion dollars, that’s $30,000,000 a year or every other year going directly into local governments, local communities. That’s money for roads and bridges and schools and retirement plans, and fire departments and first responders,” Evans said.

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