HR-9340-119
Placed on the Union Calendar, Calendar No. 713.
Sponsored by Gabe Evans (R-CO)
What it does
This bill would amend the Public Utility Regulatory Policies Act of 1978 (PURPA) to establish a new federal standard requiring that electric utilities charge large-load customers — defined as non-residential customers with a peak demand of 100 megawatts or more at a single site — the full, incremental cost of any grid upgrades needed to serve them. It would also require those customers to provide financial assurances or upfront contributions before any such upgrades begin. State regulatory authorities and nonregulated utilities would be required to consider and adopt this standard within two years of enactment, though states that have already acted on a comparable standard would be exempt from that process.
Who benefits
Existing residential and small commercial ratepayers, who would be shielded from having grid upgrade costs spread across their bills. Rural electric cooperatives and municipal utilities serving areas without large industrial customers, who currently may absorb cross-subsidized upgrade costs. Smaller commercial and industrial electricity customers below the 100 MW threshold. State utility regulators seeking a clear federal standard to apply. Electric utilities, which would gain a legal basis to require upfront cost recovery from large customers. Competing large-load facilities in states that already impose such costs, who would see a more level national playing field.
Who is hurt
Large-load customers — primarily data centers, cryptocurrency mining operations, large manufacturing facilities, and large industrial campuses — that would face higher upfront costs or ongoing rates for grid upgrades. New or expanding data center developers, who have driven much of recent large-load growth, may face increased project costs or financing complexity. Economic development interests in states seeking to attract large industrial or technology employers could see those projects become less financially attractive. Utilities in states that have not yet adopted such standards would face a mandatory two-year compliance process. Workers and communities dependent on large-load industries that may scale back expansion plans in response to higher interconnection costs.
Supporters argue
Supporters argue that the rapid growth of data centers and other large electricity consumers has forced utilities to build billions of dollars in new generation, transmission, and distribution infrastructure — costs that, under current practice in many states, are spread across all ratepayers rather than borne by the customers who require them. They contend this cross-subsidization is fundamentally unfair: ordinary households and small businesses pay higher electricity bills to subsidize the infrastructure needs of large corporations. They point to grid interconnection queues that have grown dramatically in recent years as evidence that the current cost-allocation system creates perverse incentives for large customers to request upgrades without bearing their true cost.
Opponents argue
Opponents argue that requiring large customers to bear the full incremental cost of grid upgrades could deter major economic development projects — including domestic semiconductor plants, data centers, and manufacturing facilities — that create jobs and generate significant tax revenue for local communities. They contend that some grid upgrades provide broader system reliability benefits that justify shared cost allocation, and that a rigid federal standard overrides the nuanced, case-by-case determinations that state utility commissions are better positioned to make. They also argue that the bill's two-year mandate on state regulators raises Tenth Amendment concerns about federal commandeering of state regulatory processes, and that the 100 MW threshold is arbitrary and may be difficult to administer consistently across different utility service territories.
Constitutional context
Congress enacted PURPA under the Commerce Clause (Art. I, §8, cl. 3), which provides broad authority to regulate interstate electricity markets. However, PURPA's structure — directing states to consider and implement federal standards rather than directly imposing them — was designed to navigate Tenth Amendment limits on federal commandeering of state regulatory bodies. Post-Loper Bright (2024), any ambiguity in how FERC or state commissions interpret the new standard's scope would be resolved by courts exercising independent judgment rather than deferring to agency interpretation.
Checks and balances
Congress would establish the new cost-allocation standard; state regulatory authorities and nonregulated utilities would implement it through their own ratemaking proceedings, preserving state authority over utility rates; federal courts would review any challenges to the standard's scope or application under independent post-Loper Bright review.
Historical precedent
PURPA (1978) previously established federal standards that states were required to consider for utility ratemaking, and courts upheld that "consider and implement" structure as consistent with the Tenth Amendment in FERC v. Mississippi (1982).