E&C Democratic Leaders Demand FERC Protect Families from Skyrocketing Energy Bills as Data Centers Strain Power Grid

Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) and Energy Subcommittee Ranking Member Kathy Castor (D-FL) wrote to the Federal Energy Regulatory Commission (FERC) today demanding that it prioritize affordability for American families while developing a framework for how the power grid manages data centers amid the increasing strain they are putting on our nation’s grid.

“We write to urge you to prioritize holding American families harmless from the costs imposed upon the nation’s grid by large loads, including data centers, as you consider the advanced notice of proposed rulemaking (ANOPR) submitted to the Federal Energy Regulatory Commission (FERC) by the Department of Energy (DOE),” the Democratic Committee leaders wrote to FERC Chairman Laura Swett. “The affordability of electricity in America is under threat. Residential retail electricity prices have risen 13 percent since the start of the year, tripling the rate of general inflation. And power demand from data centers is set to increase dramatically, potentially further jeopardizing consumer bills.”

Pallone and Castor pointed to reports that indicate residential power bills are already subsidizing data center buildouts, putting strain on Americans’ pocketbooks at a time they are already struggling to make ends meet as the cost-of-living skyrockets.

“Data centers and the artificial intelligence tools they power may prove to be incredible economic assets, but they must pay their fair share. They cannot be built out on the backs of the power bills of American families across the country,” Pallone and Castor wrote.

Energy Subcommittee Democrats asked that FERC follow these five principles when dealing with large data center loads:

• Ensure that the cost of grid facilities and upgrades for large load customers be fully paid by those customers.
• Require that grid operators offer load flexibility for large load applicants to serve increased demand without building new infrastructure.
• Protect open and non-discriminatory access to the grid for electric generators, no matter the fuel they use or what type of customer they are supposed to serve.
• Provide clarity on jurisdictional boundaries between federal and state regulation.
• Maintain agency independence to ensure all outcomes are reasonable and just and decided without influence or pressure from DOE or the White House.

“If a final action can meet the criteria outlined above, then FERC will have granted American families a measure of protection from the costs imposed by data centers. If the Commission falls short, then American families will pay the price,” Pallone and Castor concluded in their letter.

If FERC proceeds with this rulemaking, the two Committee leaders insisted that it publish a notice of proposed rulemaking and allow a comment period so that stakeholders have an opportunity to push FERC towards an outcome that protects hardworking families.

The full letter can be found HERE. 

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