US Senate rejects bill targeting AI data centre electricity costs

Democrats criticise bill as lacking ‘teeth’ and push for mandatory measures to address soaring electricity bills.

The United States Senate has thwarted a bill that would have required state regulators to consider forcing data centres and other major electricity users to bear the costs of the infrastructure built to serve them.

The measure failed by a vote of 57 to 43 on Wednesday. The proposal needed to pass by at least 60 votes to prevent a filibuster, a procedural hurdle in the Senate that can stymie a bill indefinitely.

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Only four Democrats — Maggie Hassan, Amy Klobuchar, Jon Ossoff and Raphael Warnock — joined Republicans to support the bill, which proponents argue would have eased the burden of rising energy costs on individual households.

The artificial intelligence (AI) boom has led to increasing demand for data centres, which provide computing power for the new technology.

There are as many as 5,400 data centres currently in the US, according to some estimates. Critics argue the facilities require substantial amounts of energy to operate, contributing to higher electricity costs.

The Ratepayer Protection Act, a first-of-its-kind bipartisan bill, was aimed at addressing the economic concerns linked to the expansion of data centres.

It passed the House of Representatives earlier this month in a landslide vote of 417 to three.

But Democrats in the Senate argued the bill does not go far enough to protect consumers from high electricity bills. Rather than requiring states to “consider” a federal utility rate standard, some senators advocated instead for mandatory enforcement to guarantee consumer relief.

Other critics described the bill as a last-ditch Republican effort to secure a legislative victory ahead of the November midterm elections.

Senate Democratic Party leader Chuck Schumer, for instance, dismissed the legislation as “toothless”. He noted that the bill failed to require data centres to cover the costs they incur in upgrades to electricity infrastructure.

“We need real action on data centres, and what do Republicans decide all of a sudden to push forward? A bill that is totally optional,” said Schumer.

He challenged Republicans to prove their commitment to the issue by passing a Democratic alternative that “has teeth”.

Despite widespread pushback, thousands of data centres already span the US, with construction underway for dozens more. While the states of Virginia and Texas lead the nation in operating facilities, California, Ohio and New York follow behind closely as top digital infrastructure hubs.

According to a September poll, 53 percent of Americans are “extremely” or “very” concerned about the impact of data centres on electricity prices or water supplies in the communities where they are built.