A new bill in Congress proposes a federal tax on the electricity used by large data centers. The bill argues that tech companies should contribute more to community costs amid the artificial intelligence boom. The proposal reflects growing concerns over the rising electricity demand from AI and cloud computing.
Overview of the Data Center Community Reinvestment Act
This proposal, the Data Center Community Reinvestment Act of 2026 (H.R. 10102), was introduced by Representative Andrea Salinas from Oregon. It aims to impose a 1-cent-per-kilowatt-hour excise tax on electricity used by data centers with more than 1 megawatt of power capacity. The generated revenue would support housing, conservation, environmental cleanup, transportation, and energy-related programs.
The U.S. Department of Energy reported that in 2023, data centers consumed about 176 terawatt-hours of electricity, accounting for approximately 4.4 percent of total U.S. electricity use. This figure is expected to rise significantly by 2028.
Salinas emphasizes that the expansion of AI is straining local infrastructure and power systems. She advocates for this bill to ensure communities do not bear these costs alone.
Financial Implications of the Bill
The tax is projected to generate about $1.76 billion annually. This revenue would be distributed among several funds:
- Land and Water Conservation Fund
- Housing Trust Fund
- Hazardous Substance Superfund
- Highway Trust Fund
- Energy Technology Trust Fund
The bill is not intended to reduce electricity bills directly but addresses concerns that data centers might increase local energy costs over time.
Potential Impact on Electricity Bills
The bill does not include a mechanism to lower utility rates. It seeks to ensure that as data-center electricity demand grows, tech companies contribute more to the associated public costs. Supporters argue that this approach helps prevent communities from absorbing infrastructure and energy costs alone.
Energy experts note that electricity prices depend on various factors, including fuel costs and state regulations. Therefore, the bill’s effect on consumer power bills remains uncertain. Nevertheless, it highlights the broader effort to manage the economic impacts of growing data-center power use.
Other Legislative Developments
H.R. 10102 is not the first measure addressing AI infrastructure growth. Recently, lawmakers proposed the Data Center Water and Energy Transparency Act of 2026, requiring energy and water consumption reporting from operators. Another bill, the Preventing Rate Inflation in Consumer Energy Act (PRICE Act), aims for large data centers to generate their own electricity.
At the state level, Virginia introduced a tax on data-center electricity consumption. Concerns were raised about the potential impact on customer bills and grid stability.
Next Steps for the Proposed Bill
The Data Center Community Reinvestment Act is under consideration by several committees. The bill highlights ongoing debates over who should bear the costs of AI’s growing energy demands and how communities could benefit from data center construction.
This conversation is part of a larger discussion about the future of America’s AI infrastructure and its related costs.
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