H.R. 9340

Ratepayer Protection Act

Sponsor: Gabe Evans

42 cosponsors
Follow this bill

In plain English: what this bill does

This bill would require state utility regulators to adopt a federal standard for electricity sold to very large data-center customers. Under it, a utility would have to charge such a customer enough to cover the full added cost of any new power generation, transmission, or distribution upgrades needed to serve it, even if the customer later leaves. Utilities would also have to get financial guarantees or payments from these customers before building those upgrades.

Who this affects

  • Large-load customers: They would have to pay the full added cost of upgrades made to serve them, even if they end their contract, and they would have to provide financial assurances or contributions before those upgrades are built.
  • Electric utilities: They would have to design their rates so large-load customers cover the full added cost of upgrades, and they would have to require those customers to provide financial assurances or contributions before building the upgrades.
  • State regulatory authorities and nonregulated electric utilities: They would have to begin considering this standard within 1 year after the law is enacted, or set a hearing date for it, and finish considering it and make a decision within 2 years.
  • States that have already acted: The standard would not apply to a utility if, before the law was enacted, its state had already put the standard or a similar one in place, had held a proceeding on it, or had voted on it in the legislature.

Words to know

  • Large-load customer: A non-residential electricity user with facilities that mainly run information technology and data storage, and that together need 100 megawatts or more of power at one site or campus.
  • Incremental cost: The extra cost that is added because of a specific project, beyond what the utility already spends.
  • Financial assurances: Promises or deposits, such as guarantees or security payments, that a customer provides to show it will cover a cost.
  • Nonregulated electric utility: An electric utility whose rates are not set by a state regulatory agency.

For example

Made-up situation: A data center company asks a utility for 150 megawatts of power for its campus, which qualifies it as a large-load customer. The utility needs to build a new substation to supply that power. Under this bill, the utility would first require the company to provide financial assurances or payments to cover the cost of the substation. If the company later ends its contract, the company would still have to pay the full added cost of that substation.

Written by AI from the bill's text below; it can be wrong. How it's written

Official summary

Written by the Congressional Research Service.

Ratepayer Protection Act

The bill requires state utility regulators and nonregulated utilities to consider implementing a standard to hold certain large-load customers responsible for the costs associated with any generation, transmission, or distribution upgrade of electric service necessary to serve such customers. A large-load customer means a non-residential electric consumer that enters, or requests to enter, an agreement concerning the sale of electric energy primarily to operate information technology infrastructure and related systems pertaining to data storage and computational applications and services (e.g., data centers) that have a peak electric demand of 100 megawatts or more at a single site or campus. 

Specifically, the bill requires states to consider implementing a federal standard for large-load customers. The standard must require rates charged by electric utilities for providing electric service to a large-load customer to be designed to recover from the large-load customer the full, incremental cost of any generation, transmission, or distribution upgrade necessary to serve such customer. This rate must include the costs that would be incurred if the large-load customer terminates an agreement with the electric utility pertaining to the sale of electric energy or otherwise ceases the purchase of energy from the electric utility.

Under the standard, an electric utility must require the large-load customer to provide to the utility financial assurances or contributions to cover the cost of any generation, transmission, or distribution upgrade that is necessary to serve the load of a large-load customer before the utility makes any generation, transmission, or distribution upgrade.

Text of the bill

Expand all