State Lawmakers Tackle Energy Demand from Data Centers

As the demand for artificial intelligence and cloud computing skyrockets and data centers consume massive amounts of electricity, our power grids across the U.S. could begin to strain if action is not readily taken. In response, lawmakers in several states are considering legislation to balance the industry’s growth with energy reliability and cost concerns.

In states such as Georgia, Virginia, California, and Texas, bills to ensure data centers bear the cost of their power demands, rather than shifting the financial burden onto residential ratepayers, have increased. In Georgia, Senate Bill 34 aims to prevent electric suppliers from subsidizing data centers using funds from existing customers. Similarly, Virginia legislators are pushing for policies that limit construction and infrastructure costs from being passed to consumers while incentivizing energy-efficient facilities.

Texas is taking a more drastic approach–it has introduced a “kill switch” proposal to allow the state to shut down data centers during grid emergencies. Given Texas’ history of grid challenges, the Electric Reliability Council of Texas (ERCOT) and lawmakers must prioritize maintaining reliable, efficient, and cheap electricity with the development of more data centers.

It is more necessary than ever to address these obstacles by providing a reliable and efficient energy source that can support the growing demands of data centers. As the debate continues, lawmakers nationwide must balance fostering technological advancements with ensuring a stable, affordable energy supply for all consumers. An inclusive, all-of-the-above strategy incorporating a mix of energy sources and infrastructure buildouts—such as pipelines, natural gas, wind, and solar—will be the most effective way to enhance energy security and combat a straining grid.