As artificial‑intelligence companies race to build massive data centers, two states are showing very different ways to protect ratepayers. In New Jersey, Governor Mikie Sherrill signed legislation that requires the state’s Board of Public Utilities to create a separate rate structure for large data centers and to keep the costs of new substations, transmission lines, or other grid upgrades off the bills of ordinary customers.
The law also obligates data centers to pay for at least 85% of the electricity capacity they request for a ten‑year period, even if they later scale back or shut down. Regulators are urged to encourage these facilities to add clean generation or energy storage, improve efficiency, and reduce demand during emergencies.
Indiana’s utility‑led agreement
Across the country in Indiana, regulators took a market‑based approach. The Indiana Michigan Power (I&M) utility, together with consumer advocates and major tech firms, negotiated a deal that requires new large customers – including data centers – to make long‑term financial commitments for the electric service they request. With those commitments, I&M says it can lower base rates for existing customers by $59 million in 2027.
If the Indiana Utility Regulatory Commission approves the plan, a typical household using 1,000 kWh per month could see about $100 in annual savings. I&M also proposes to freeze all residential rates for three years, with any savings beginning in the summer of 2027.
Industry and policy perspectives
Energy‑advocacy leader Daniel Turner praised Indiana’s flexible model but warned that both states need to ensure new data centers add power to the grid rather than simply consume it. He suggested every data center be built alongside the generation needed to run it and feed excess electricity back into the system.
The Trump administration has already promoted a national “Ratepayer Protection Pledge,” signed by major technology companies such as Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI. The pledge commits these firms to cover the cost of additional electricity generation required for AI data centers, rather than passing those costs onto American families.
Turner argued that the stakes go beyond utility bills, emphasizing that the United States must stay ahead of China in the AI race. He warned that if America falls behind, the nation could lose control over critical intellectual property and digital infrastructure.
Original reporting: Fox News (HLL/CB) — read the source article.
