Who uses electricity, who generates it! The United States plans to pass legislation to end the era of data centers "free-riding" on electricity and strictly prohibit pushing up residential electricity prices.

U.S. Senator Josh Hawley is pushing a new bill that would require data centers to independently supply their own electricity when constructing new high-energy-consuming facilities. This aims to fundamentally prevent cost-shifting caused by the surge in corporate electricity demand and protect ordinary households from soaring electricity prices.

According to Axios, this legislative proposal directly targets the core contradiction that has troubled the U.S. power market in recent years: Large data centers consume far more electricity than the existing grid capacity, leading to significant increases in local electricity prices. Multiple studies have shown that in areas with high concentrations of data centers, residents’ electricity bills tend to spike. The core logic of this bill is based on simple supply and demand—when a giant user consuming hundreds of megawatts suddenly connects to the grid, and utility companies’ new generation capacity often lags by years, prices are bound to rise.

Hawley’s draft bill explicitly requires that new data centers must adopt a “behind-the-meter” power supply arrangement, meaning these facilities must bring their own power sources and cannot pass energy costs onto consumers. This means that new large-scale power load projects must be built in tandem with new power generation facilities, preventing or even reversing the trend of rising electricity bills that burden American families.

If enacted into law, this move would fundamentally change the investment and operation models of the U.S. data center industry. With the explosive growth in AI and cloud computing demand, data centers have become energy-intensive giants. Legislative intervention signifies that regulators are attempting to redefine the boundaries between industry development and livelihood protection, forcing tech giants to bear the infrastructure costs of their expansion.

“Bring-Your-Own-Source” Model: Blocking Cost-Sharing

The core demand from legislators is to establish a responsibility mechanism of “who uses electricity, who generates it.” Currently circulating proposals require new data centers to have their own power supply plans upon deployment.

The most commonly discussed solution is the “behind-the-meter” arrangement. In this model, the power generation facilities are directly connected to the data center via on-site transmission structures, with no interaction with the public grid. This is seen as the most direct way to reduce taxpayer burden because it physically isolates corporate electricity use from residential consumption, ensuring that the massive energy consumption of data centers does not encroach on existing grid resources or trigger price fluctuations based on supply and demand imbalances.

Power Supply Strategy Debate: Behind-the-Meter vs. Front-of-the-Meter

While Hawley’s current proposal leans toward a strict “behind-the-meter” arrangement, specific provisions remain uncertain during legislative progress. Besides the fully independent “behind-the-meter” model, there is an alternative called “front-of-the-meter.”

In the “front-of-the-meter” model, data centers still carry their own power sources but transmit electricity through the local grid, even if the generation facilities are physically close to the data center. This arrangement allows data centers to utilize existing transmission lines and transformers, potentially shortening the time to operational deployment.

Most grid advocates prefer this “front-of-the-meter” approach. They believe that this model, while increasing overall generation capacity, can better support grid stability and maximize benefits for household consumers. As long as there is a mandatory requirement for new data centers to finance upgrades to grid infrastructure, consumer costs can be effectively reduced as well.

Market Context: Supply-Demand Imbalance and Rising Electricity Prices

The legislative initiative is set against a backdrop of increasing resistance across the U.S. to new data center constructions. Over recent months, numerous studies have emerged linking rising electricity prices to data center development.

The root of the problem lies in supply-demand mismatch. A gigawatt-scale data center, once operational, consumes far more electricity than the capacity of the connected grid. Traditional utility companies need years to develop new generation capacity to fill this gap. This time lag directly causes localized power shortages and price hikes, ultimately paid for by ordinary households.

Whether adopting the “behind-the-meter” or “front-of-the-meter” approach, the legislators’ clear intent is: to solve the simple supply-demand imbalance by mandating data centers to build their own power generation or fund grid upgrades, ending the era of data centers relying on existing public grid resources to “free ride” and drive up residential electricity prices.

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