Te FINANCIAL — The U.S.
Senate on Sept.
17 blocked rapid passage of legislation that would require state regulators to consider making large data centers pay the full incremental cost of electricity infrastructure needed to serve them, one day after the House approved the measure 417-3.
The confrontation puts the physical infrastructure behind Artificial Intelligence at the center of a broader U.S.
debate over electricity prices, grid expansion, water consumption, local development and the future location of data centers.
The House legislation, known as the Ratepayer Protection Act, was introduced by Rep.
Gabe Evans, Republican of Colorado, and Rep.
Kathy Castor, Democrat of Florida.
Jon Husted, Republican of Ohio, brought the measure to the Senate floor on Sept.
17, seeking unanimous consent.
Martin Heinrich, Democrat of New Mexico, objected, saying the House bill did not go far enough.
The bill therefore did not advance through the expedited procedure.
The legislation would establish a federal standard for state utility regulators to consider when deciding how large electricity customers should pay for new generation, transmission, substations and distribution infrastructure.
The House bill does not itself impose a mandatory national rate structure; it directs states and utilities to consider such standards.
The Senate dispute came after the House passed the measure by an overwhelming bipartisan margin.
NBC News reported that President Donald Trump has supported the construction of new data centers as necessary infrastructure for U.S.
Artificial Intelligence companies competing with China.
At the same time, opposition to new facilities has grown in communities concerned about electricity, water, land use and environmental effects.
The supplied NBC News report cited a September NBC News Decision Desk Poll in which nearly 70% of respondents opposed building AI data centers in their neighborhoods.
The data center boom is moving faster than the grid The underlying economic trend is difficult to separate from AI.
The International Energy Agency reported that global data-center electricity consumption increased 17% in 2025, while electricity consumption from AI-focused data centers increased 50%.
The IEA said capital expenditure by five major technology companies exceeded $400 billion in 2025 and was expected to rise another 75% in 2026.
In the United States, Lawrence Berkeley National Laboratory’s 2025 update estimates that data centers could consume 11.8% of total U.S.
electricity by 2030, with a modeled range of 9.5% to 15.3%.
The Energy Information Administration’s 2026 outlook identifies data-center load as a major driver of U.S.
electricity-demand growth.
EIA forecasts U.S.
electricity sales of 4,135 billion kilowatt-hours in 2026 and 4,211 billion in 2027.
The scale of the potential expansion varies substantially among forecasts because many announced data-center projects remain proposals rather than operating facilities.
Reuters reported in January that planned U.S.
data-center capacity could theoretically increase from about 15 GW to more than 150 GW based on state and local filings, but noted that a significant portion of that pipeline is speculative.
Texas illustrates the size of the development pipeline.
ERCOT reported more than 232,000 MW of large-load requests in its interconnection process in February 2026, with data centers accounting for the largest category in its reported project mix.
Where the next U.S.
data centers are likely to be built The established centers of the U.S.
data-center economy remain important, but the geography is changing.
CBRE’s first-half 2026 research identifies Northern Virginia, Atlanta, Dallas-Fort Worth, Phoenix, Chicago, Silicon Valley, Hillsboro and the New York Tri-State region as the eight primary North American markets.
Northern Virginia remains the largest market by operating inventory.
CBRE reported 4,496.5 MW of inventory in the first half of 2026, with vacancy at only 0.2%.
But the market is increasingly constrained by power, land and permitting.
Atlanta moved ahead of Northern Virginia in construction activity, with about 2,882 MW under construction in the first half of 2026.
Dallas-Fort Worth is another major beneficiary.
CBRE’s 2026 investor survey found that 78% of surveyed investors identified Dallas-Fort Worth among the most attractive markets, compared with 72% for Northern Virginia.
Power availability, land, fiber infrastructure and Texas’ electricity-market structure were among the factors cited.
JLL’s midyear 2026 research shows an even broader geographic shift.
It estimates that 77% of North American capacity under construction is now in so-called frontier markets.
West Texas has been the largest beneficiary of this movement, while Ohio, Louisiana, Indiana and the Carolinas have also gained significant new development.
This does not mean established markets are disappearing.
Instead, the industry is expanding into areas where developers can obtain large quantities of electricity and land without waiting years for constrained transmission systems to expand.
Data centers near New York The New York Tri-State market remains a major data-center market but faces a different regulatory environment from Texas and parts of the South.
CBRE reported about 190 MW of inventory in the New York Tri-State market in the first half of 2026, considerably smaller than Northern Virginia, Atlanta and Dallas-Fort Worth.
New York State subsequently imposed a temporary halt on approvals for new data centers of 50 MW or more.
The action demonstrates how power, environmental review and political considerations can become binding constraints even in regions with strong demand for digital infrastructure.
For developers, the New York area therefore presents a contrast with markets such as Texas and parts of the Southeast: access to customers and established network infrastructure is valuable, but the ability to obtain new power and permits can be more restrictive.
Datacenters in Florida face a different resource equation Florida is also becoming part of the national debate.
Florida’s 2026 legislation addressing large-scale data centers includes provisions concerning utility tariffs, grid reliability, water-use permits and foreign ownership restrictions involving countries designated as foreign countries of concern.
The legislation also calls for an independent study examining economic development, tax revenue, land, water and other natural resources, energy use, electricity-rate effects, and public health and safety associated with large-scale data centers.
Florida’s position is significant because the state’s electricity system must accommodate a combination of population growth, air-conditioning demand and new industrial loads while data centers can require unusually large, concentrated amounts of electricity.
Power, not land, may become the decisive resource For years, the conventional data-center site-selection formula emphasized land, fiber connectivity, tax incentives and proximity to customers.
CBRE’s 2026 research identifies power availability and infrastructure delivery timelines as the most decisive factors influencing site selection, leasing and pricing.
JLL similarly reports that power constraints are reshaping the development map.
The problem is partly physical.
A large AI campus can require hundreds of megawatts or, in the largest cases, gigawatts of electricity.
Serving such a facility can require generation, transmission lines, substations, transformers and distribution equipment.
FERC responded in....
