House backs data center ratepayer measure
The U.S. House approved a bill requiring state utility regulators to consider making large data centers pay for additional electricity infrastructure. Michigan already implements similar rate structures for data centers, and local governments in Muskegon County are adopting moratoriums and zoning regulations to address data center impacts like noise. The federal bill now moves to the Senate for consideration.
The U.S. House overwhelmingly approved the Ratepayer Protection Act, H.R. 9340, with a 417-3 vote, sending the measure to the Senate. The bill would require state utility regulators to consider standards under which large data centers would pay rates designed to recover the full cost of additional electricity generation, transmission, and distribution infrastructure required to serve them. While states would not be mandated to adopt this standard, the move reflects growing national scrutiny over data center energy consumption.
Michigan is already employing similar approaches. Lindsey McGuirk of Consumers Energy's Growth Team stated that data centers are charged under large-load rate structures. The Michigan Public Service Commission has approved changes to Consumers Energy's rates and implemented ratepayer protections on DTE Energy's special contracts for a 1.4-gigawatt data center under construction in Saline Township, requiring the data center to reduce its electricity use before other DTE customers if demand reduction is directed. A June report by the Citizens Research Council of Michigan, discussed by Eric Dennis, concluded that Michigan's existing utility, water, and environmental regulations are generally adequate, but identified continuous, low-frequency noise as a significant regulatory gap.
The House vote comes as a Department of Energy-backed report estimates data centers could account for up to 12% of U.S. electricity consumption by 2028. U.S. Rep. John Moolenaar, R-Caledonia, co-sponsored the legislation, advocating for local decision-making on data center projects and ensuring that companies, not residents, bear the electricity-related costs. Michigan has sought to attract the industry with tax exemptions, but the Citizens Research Council recommended continued evaluation of whether these economic benefits outweigh revenue losses and suggested considering partial exemptions or caps.
At the state level, several data center bills addressing moratoriums, utility rates, water use, noise, labor, community benefits, and tax exemptions are pending in the Michigan Legislature. Locally, Muskegon County communities are taking varied approaches: White River Township adopted a temporary moratorium to review zoning, Montague enacted conditional-use regulations, and Moorland Township approved permanent standards. These local reviews typically focus on site-specific impacts such as setbacks, noise, water sources, farmland conversion, utility infrastructure, and emergency services.