A new bill has been proposed in the US Senate that would permit artificial intelligence (AI) data center firms to bypass federal electricity regulations by building their own energy infrastructure.
The DATA Act of 2026 was proposed by Senator Tom Cotton (Republican, Arkansas) and would amend the Federal Power Act.
“American dominance in AI and other crucial emerging industries should not come at the expense of Arkansans paying higher energy costs,” Cotton said in a statement. “My bill will ensure that America can continue to lead in these spaces by eliminating outdated regulations.”
If passed the bill would create a new utility category called “consumer-regulated electric utilities” (CREUs), with companies who build their own independent power infrastructure falling under this new designation. In order to qualify for CREU, the utilities would have to be completed disconnected from the main grid and built solely to serve new electric loads. Consequently, if the utility subsequently connects to the grid it would lose its exempt status.
This seems pretty reasonable to me, but I’m skeptical of anything with Tom Cotton’s name on it. But it seems like incentivizing data centers to build their own power generation (using mechanisms that may be more suited for data center use rather than residential use) could take the edge off of their impact on residential electricity costs. Is there a downside to this, or is this a “broken clock is right twice a day” thing? Maybe it lets them bypass environmental regulations as well?