A Grid Question: Federal Data Center Policy in the United States 2026
Electricity Affordability Now Drives Federal Data Center Energy Policy
Federal energy policy regarding data centers in the US is now driven by consumers' electricity bills more than grid reliability. Load growth, a lack of timely power generation buildout, and outdated cost allocation rules are creating an electricity affordability problem that has evolved into a political issue across party lines.
NERC forecasts 224 gigawatts (GW) of summer peak growth between 2026 and 2035, a 69% increase compared to the 10-year forecast from the year prior, with data centers driving most of that increase. Policymakers in Congress and at executive agencies like FERC are responding in a myriad of ways, and not always along predictable party lines.
What's Inside
- The data center bills in the 119th Congress. Proposals on ratepayer protection, siting and permitting, disclosure mandates, and moratoria, and how they differ on who acts and how firmly.
- Where Congress agrees, and where it splits. Most Members of Congress now agree that data centers should pay for the grid upgrades and power they need. The disagreement is over whether and how to require fair cost allocation.
- The most likely vehicle for federal policy. Which bill is best positioned to carry federal data center energy and cost policy in the near term.
- FERC's six show cause orders. How they could reshape large load interconnection, and the jurisdiction questions they raise.
- A forecast for 2027 and beyond. Likely outcomes in the 120th Congress and at FERC.
Frequently Asked Questions
Electricity affordability. Federal energy policy regarding data centers in the US is now driven by consumers' electricity bills more than grid reliability.
As of October 30, 2026, no new laws directly relating to data centers or bulk power generation have been enacted by Congress since the 2024 elections, and only one has received a floor vote. In September, the House passed the Ratepayer Protection Act 417 to 3, but it only asked states to consider making data centers cover their own costs. The bill stalled in the Senate.
In June 2026, FERC issued six "show cause" orders to the regional grid operators under its jurisdiction. The orders require each grid operator to either justify or amend the rules that control how large loads, such as data centers and manufacturing facilities, connect to electric grids.
Why Relae
Relae is the trusted advisor in energy and climate, delivering scientifically rigorous, technically advanced, and commercially grounded solutions. Our scientists, engineers, and policy experts pair systems-level knowledge with project-level understanding to help clients achieve their energy and climate goals. For this white paper, the policy experts at Relae analyzed the federal responses to data center development, from the proposals in Congress to FERC’s show cause orders.
Rory Jacobson
Rory Jacobson
Rory Jacobson is the Head of Policy at Relae. Previously, he served as the Director of the Carbon Dioxide Removal program within the Office of Fossil Energy and Carbon Management (FECM) at the U.S. Department of Energy (DOE). In previous roles at DOE, Jacobson has supported and coordinated FECM’s carbon removal and management programs and projects.
Prior to joining DOE, Jacobson was a Deputy Director of Policy at Carbon180, where he managed the federal policy portfolio for engineered carbon removal pathways. He has led carbon management research and analysis in multiple roles, including with the Natural Resources Defense Council and the World Resources Institute, and Relae. Jacobson received his master’s in environmental management from the Yale School of Forestry, where he was a Kerry Fellow.
Kerry Fellowship (2021-2022)
Yale Jackson School of Global Affairs
Secretary’s Honor Award (2023)
U.S. Department of Energy
Thaddeus Woody
Thaddeus Woody
Before joining Relae, Thaddeus worked in Washington, DC for more than a decade, focusing on energy, environment, and climate policy. Most recently, he served as Legislative Director for Congressman Marc Veasey where he led the Congressman’s legislative team. He is especially proud to have played a part in building transformative climate legislation like the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). Prior to joining Congressman Veasey’s office, he worked at the U.S. Department of Energy in the office of Energy Efficiency and Renewable Energy (EERE).
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Learn what's on the table and what's likely to happen in the lame duck and the 120th Congress.
