H.R. 9340: Ratepayer Protection Act Narrows to Data Centers

On July 21, the House Energy and Commerce Committee ordered the Ratepayer Protection Act, H.R. 9340, reported to the full House by a vote of 52 to 0. The bill would create a federal standard on who pays when a data center needs new generation, transmission, or distribution upgrades to interconnect. An earlier draft covered any large load at 100 MW or more. The version that cleared committee covers data centers only.

That is the headline. The mechanism underneath it is what a procurement team needs to read correctly, because the bill does not do what the headline implies.

What the Ratepayer Protection Act Actually Requires

The bill amends Section 111(d) of the Public Utility Regulatory Policies Act of 1978. PURPA 111(d) is a “consider and determine” provision: it requires state regulatory authorities to open a proceeding, consider a specific standard, and issue a documented determination on the record. It does not require them to adopt the standard. Congress has used that same mechanism to push net metering, time-of-use rates, and integrated resource planning onto state agendas since the 1970s, and the adoption record on all three diverged sharply by state: some commissions adopted the standard, others opened a docket and declined, and a few let the question sit for years.

Read the bill correctly and the forecast is not “data centers will pay their own way nationwide.” It is closer to “every state public utility commission will be forced to open a large-load cost-allocation docket, on the record, within a defined window.” That is a procedural mandate, not a rate mandate.

The standard itself is worth reading in the bill’s own words. H.R. 9340 directs that a rate charged to a large-load customer be designed to recover “the full, incremental cost of any generation, transmission, or distribution upgrade necessary to serve the load of such large-load customer.” Three categories, named individually. Most coverage of this bill compresses that phrase into “grid upgrades,” and the compression throws away the only word that decides anything below the transmission system. A generation or transmission upgrade is somebody else’s capital plan. A distribution upgrade is the substation, the feeder rebuilds, and the direct-connect facilities, and whether those come out of a utility’s rate base or a developer’s capital budget is the difference between a municipal utility absorbing a 100 MW interconnection and a municipal utility invoicing it.

The threshold sits with the definition rather than the standard: a large-load customer is a non-residential consumer whose facilities carry, in the aggregate, a peak demand of 100 MW or more at a single site or campus.

One caveat on citation, because it decides what you can rely on. The committee ordered the bill reported in the nature of a substitute, so the operative text is an amendment that has not been published yet. The language quoted above is from the introduced version, and trade coverage of the advanced bill reports the same three-category cost language surviving into it. That is good enough to plan around and not good enough to write a compliance position on. Read the reported text when it posts.

The bill is sponsored by Reps. Gabe Evans (R-CO) and Kathy Castor (D-FL), with committee action led by Chairmen Brett Guthrie and Bob Latta. It was introduced June 18 and cleared full committee 52 to 0 on July 21.

Large-Load Financial Assurance: What H.R. 9340 Requires Before Construction

Cost assignment decides who pays eventually. It does not decide who carries the risk if the load never arrives. H.R. 9340 handles the second question in a separate provision, and that provision is getting almost no coverage.

The bill directs that before making any generation, transmission, or distribution upgrade necessary to serve a large-load customer, “an electric utility shall require the large-load customer provide to the electric utility financial assurances or contributions to cover the cost of such upgrade.”

Read that against the failure mode it is written for. A cooperative or municipal utility builds a substation against a signed 100 MW interconnection request. The project cancels. The steel is in the ground, and the cost lands in a rate base with a few tens of thousands of customers to spread it across. Cost assignment alone does not help there, because there is no longer a large-load customer to assign anything to. Assurance before construction does.

The cost-recovery language carries the same idea past energization. It applies, in the bill’s words, “including in the event of such large-load customer terminating a contract or other agreement with the electric utility pertaining to the sale of electric energy, or otherwise ceasing the purchase of electric energy from the electric utility.” A developer that walks in year three does not walk away from the upgrade cost.

For a buyer this is the provision that changes a specification decision rather than a rate filing. If your commission adopts a standard carrying an assurance requirement, the first question on a large-load interconnection stops being what the customer will pay and becomes what the customer has posted and when it releases. That question gets settled in a term sheet, before you commit to a transformer slot, not after.

Why Congress Narrowed the Federal Large-Load Standard to Data Centers

The 52 to 0 vote has a specific cause: the bill codifies a standard that a voluntary coalition had already accepted. Seven AI companies signed the original Ratepayer Protection Pledge in March, committing to cover their own data center energy costs: Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI. Legislating an existing voluntary commitment is low-friction, which explains committee-level unanimity on a bill touching utility cost allocation, usually contested territory.

The narrowing from “any load at 100 MW or more” to “data centers only” is the detail worth tracking. It exempts new industrial and manufacturing loads at the same size threshold: steel mills, chemical plants, EV and battery factories. An aluminum smelter and an AI campus interconnecting at identical load now face different federal treatment. Expect state-level fights over the definition of “data center” wherever a hyperscale facility sits next to, or inside, an industrial campus. And because the 100 MW trigger survives inside the data-center category, several states are likely to import that threshold into their own standards even though the federal bill no longer applies it broadly.

Ratepayer Protection Pledge Signatories: Who Signed, and Why the Mix Matters

Two days after the committee vote, on July 23, the White House expanded that pledge to 187 organizations and 23 governors, a group the administration says covers 80 percent of all power delivered to US homes and businesses. The composition is the part worth reading. More than a hundred of those organizations are electric cooperatives and public power entities, the largest single bloc and a larger count than the investor-owned utilities that signed. Basin Electric, Dairyland Power, and Hoosier Energy are among them. Published category breakdowns differ slightly between trade outlets and the White House release gives none, so treat the bloc sizes as approximate and the ordering as the finding.

That ordering inverts how the pledge usually gets described. This is not a hyperscaler-and-IOU arrangement with public power watching from the outside. The segment that signed it most heavily is the one with the smallest rate base to absorb a mistake, and Basin Electric, Dairyland, and Hoosier are generation and transmission cooperatives, which is the level where wholesale large-load contracts actually get written. Our read on what a cooperative fleet does when data center load lands on it covers the operating end of the same question.

Two limits are worth holding onto. The pledge is voluntary and nonbinding throughout, so between it and a consider-and-determine mandate, the operative document for any specific interconnection is still the state commission order. And the 23 governors are all Republicans, which makes the geographic durability of the commitment a live question rather than a settled one.

The Large-Load Cost-Allocation Hole the Act Doesn’t Close

The Ratepayer Protection Act operates at the retail, state-jurisdictional level. It says nothing about network-upgrade costs allocated regionally, at the wholesale level, through a Regional Transmission Expansion Plan. That gap is not theoretical. Days before this committee vote, ratepayer advocates from Delaware, Illinois, Maryland, Ohio, and Pennsylvania filed jointly at FERC in docket EL26-67, arguing that the commission’s own large-load show-cause order for PJM leaves exactly this question open.

The numbers behind that filing are worth citing directly. PJM’s Independent Market Monitor attributes $6.3 billion of $16.4 billion in the most recent capacity auction, 38 percent, to data centers. Across the last four auctions, the figure is $29.4 billion of $63.6 billion, 46 percent, and rising as a share. A state can adopt the full Ratepayer Protection Act standard for its retail rates and still see the network upgrades serving that same data center socialized across every ratepayer in the RTO footprint. Congress is answering the state question. Nobody with authority has answered the RTO question yet.

What This Means for Equipment Procurement

If a state opens a docket and adopts a version of the standard, the purchasing decision moves, not just the invoice. A utility recovering costs through its rate base buys to its own specifications, its own vendor list, and its own multi-year cycle. Developers paying directly buy to a construction schedule, negotiate their own supply agreements, and are measurably more willing to pre-buy long-lead transformers, switchgear, and HV breakers, or fund a manufacturer’s added capacity outright to hold a slot. That last move has become its own procurement instrument, and we covered how a production slot reservation now substitutes for the purchase order on exactly this class of buyer.

That shift is already underway in states with codified large-load tariffs, from Oregon’s Schedule 96 to Duke’s proposed rate class to Pennsylvania’s but-for framework. The Ratepayer Protection Act adds federal pressure behind a trend already in motion rather than starting a new one. For municipal and cooperative buyers competing for the same transformer and switchgear slots without a 100 MW customer of their own, the practical effect is more counterparties in the queue carrying fewer procurement constraints and more schedule urgency than a rate-regulated utility.

Two things are worth watching next. First, the House floor vote and the parallel Senate effort led by Sen. Jon Husted, since a “consider” standard that never clears the Senate stays a House-only signal. Second, whether the five-state EL26-67 filing moves FERC to address wholesale network-upgrade allocation, because that is the half of this problem a state commission cannot touch no matter how the Ratepayer Protection Act resolves.

Our utility procurement intelligence guide tracks every large-load cost-allocation template, federal and state, shaping the 2026 buying window.

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Related Reading

• FERC Puts 6 RTOs on the Clock: Large-Load Show-Cause Order
• Who Pays for Data Center Grid Upgrades? FERC’s June 18 Decision
• Pennsylvania Large Load Tariff: ‘But For’ Cost Allocation
• AI Ratepayer Protection Meets State Utility Law
• Cooperative Utility Data Center Load Meets a 936 MW Fleet
• Equipment Production Slot Reservation Replaces the Order