Who uses electricity, generates electricity! The United States plans to legislate to end the era of data centers "piggybacking" on electricity, strictly prohibiting the driving up of civilian electricity prices.

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U.S. Senator Josh Hawley is pushing a new bill that would require data centers to supply their own electricity when building new high-energy facilities, fundamentally blocking the transfer of rising corporate power costs to consumers and protecting ordinary households from skyrocketing electricity prices.

According to Axios, this legislative initiative directly targets a core contradiction that has troubled the U.S. power market in recent years: the electricity consumption of large data centers far exceeds the grid’s current capacity, resulting in significant local electricity price increases. Multiple studies show that in areas where data centers are concentrated, residential electricity bills have generally surged. The core logic of the bill is a simple matter of supply and demand—when a new mega-user drawing hundreds of megawatts is suddenly connected to the power grid, and when new generation capacity by utility companies often lags by years, prices inevitably rise.

Hawley’s draft legislation explicitly requires that new data centers must adopt a "behind-the-meter" power supply arrangement, i.e., these facilities must bring their own power source and may not pass energy costs onto consumers. This means large new power load projects must be built in tandem with new generation facilities, thereby preventing or even reversing the hike in electricity prices that has plagued American households.

If enacted, this move would fundamentally change the investment and operating model of the U.S. data center industry. With the explosive demand for artificial intelligence and cloud computing, data centers have become energy behemoths. Legislative intervention represents regulators attempting to redraw the boundaries between industrial development and livelihood protection, forcing tech giants to bear the infrastructure costs of their expansion.

"Self-Powered" Model: Blocking Cost Transfers

Lawmakers’ core demand is to establish a "those who use power generate power" responsibility mechanism. The current circulated proposal requires new data centers to possess their own power supply plans at launch.

The most frequently mentioned solution in the industry is the "behind-the-meter" arrangement. In this model, the power generation facility is connected directly to the data center via onsite transmission, without interacting with the public grid. This is seen as the most direct way to reduce taxpayer burden, as it physically separates corporate and residential electricity use, ensuring the massive consumption of data centers does not compete for existing grid resources or trigger price volatility due to supply-demand imbalance.

Power Supply Solution Debate: Behind-the-meter vs. Front-of-the-meter

While Hawley’s current proposal leans towards a strict "behind-the-meter" arrangement, the specific clauses remain subject to change as the legislation progresses. In addition to the fully independent "behind-the-meter" model, there is also an alternative called "front-of-the-meter".

In the "front-of-the-meter" model, data centers still have their own power sources, but transmit electricity through the local grid even though the generation facility is physically close to the data center. This arrangement allows data centers to use existing transmission lines and transformers and can shorten the time needed for facilities to come online.

Most grid advocates favor this "front-of-the-meter" arrangement. They believe that this model not only increases overall generating capacity, but also better supports grid stability, thereby maximizing household consumer benefit. As long as new data centers are required to finance grid infrastructure upgrades, it can also effectively reduce the cost burden on consumers.

Market Background: Supply-Demand Mismatch and Soaring Electricity Prices

The background to this legislative proposal is the growing resistance across the U.S. to new data center construction. In recent months, studies have continually emerged linking rising electricity prices to the construction of data centers.

The root of the problem is a mismatch between supply and demand. Once a gigawatt-scale data center is online, its power consumption often vastly exceeds the carrying capacity of the connected grid. Traditionally, it takes years for utility companies to develop new generating capacity to fill this gap. This lag directly leads to localized shortages and price hikes, with ordinary households ultimately footing the bill.

Whether adopting the "behind-the-meter" or "front-of-the-meter" model, legislators' intention is clear: by mandating data centers to build their own power generation or finance grid upgrades, they aim to solve the simple problem of supply-demand imbalance and put an end to data centers relying on the existing public grid to "sponge" electricity and drive up residential rates.

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