Lawmakers on the House Committee on Energy and Commerce are weighing several proposals to regulate energy amid the rise of artificial intelligence (AI) but appear divided on how to address the issue.
During an energy subcommittee hearing on Wednesday morning, lawmakers invited regulatory officials and state utilities providers to address a widening gap between projected energy demand and available supply.
That new demand equates to 224 gigawatts of projected summer peak demand growth over the next 10 years while 105 gigawatts of grid capacity retire in the same time frame, according to the 2026 Long-Term Reliability Assessment from the North American Electric Reliability Corporation.
The result is in a 329-gigawatt shortfall over the next decade, Subcommittee Chair Bob Latta, R-Ohio, said.
A number of legislative proposals to address that shortfall were at the center of the hearing. Some acts would improve demand forecasting, expand baseload energy, and ensure data centers and states bear the increased energy costs they create. While lawmakers and witnesses broadly agreed that large load customers – such as data centers – should pay for the costs they create, how to enforce that was up for debate.
“Our nation’s grid is facing enormous challenges, and those challenges call for big solutions. Unfortunately, I don’t think that those we’ll review at today’s hearings meet the moment,” said Rep. Frank Pallone, D-N.J., who serves as ranking member of the full committee.
“Some of the bills before us today include good ideas … they’re largely small steps in the right direction. But we don’t need small steps. We need big steps because we have big problems,” Pallone added.
Chair of the full committee, Rep. Brett Guthrie, R-Ky., acknowledged concerns about rising costs for households but also pointed to potential economic benefits if growth is managed effectively.
“It is no secret that energy demands coming from data centers are raising concerns about affordability in our communities,” Guthrie said, adding that policymakers are working to ensure “that data center growth works for all Americans, and not just big tech companies.”
“When done right, research and evidence continue to show that low growth coming from data centers actually lowers costs for communities,” he added, citing grid investment and local tax revenue as key benefits.
At the same time, members on both sides emphasized that large energy users should not shift costs onto consumers.
“We should be able to agree that data centers must foot the bill for their grid upgrades, rather than offload that cost on families we represent,” said Subcommittee Ranking Member Kathy Castor, D-Fla..
Castor urged Congress to harness opportunities to better utilize the existing grid, which she noted is designed to meet peak demand but operates far below capacity most of the time. She said studies suggest that “existing rate payers could save more than $100 billion over the next decade,” and pointed to technologies such as batteries, grid-enhancing systems, and distributed energy resources.
Meanwhile, some Republican lawmakers focused on GOP proposals to strengthen reliability and reshape cost allocation, particularly in response to what they described as policy failures under the Biden administration.
Among the proposals was the Ratepayer Protection Act, which Latta said would “ensure that states have necessary policies in place to safeguard households from footing the bill for data center energy needs.” Another measure, the Fair Allocation of Interstate Rates (FAIR) Act was highlighted as a solution to cost-sharing disputes, which would “place the burden of renewable portfolio standard costs on the states [that] choose to adopt those requirements,” according to Latta.
However, the FAIR Act received pushback during the hearing, with some witnesses and Democrats warning it could complicate regional transmission planning and limit broader grid development efforts.