The No Harm Data Centers Act amends the Federal Power Act to treat facilities with peak demand over 50 megawatts (or aggregated facilities behind a single point of interconnection) as a distinct class for regulatory treatment. It gives the Federal Energy Regulatory Commission (FERC) exclusive authority to approve retail rates and charges for covered electric utilities’ sales to such data centers, requires those rates to include the full cost of interconnection, transmission/distribution upgrades, and generation needed for reliability, and bars cost-shifting of those costs to other retail customers.
The bill also makes predispute nondisclosure clauses unenforceable against elected public officials in matters tied to data-center construction, directs the EPA to contract with the National Academies for a 180‑day assessment of environmental and public-health impacts, and creates a stiff civil penalty—up to $10 million per day—for violations of the new data-center provisions. For compliance officers, utility planners, and corporate real-estate teams, the bill changes who sets retail prices, what those prices must recover, and narrows confidentiality protections around public officials involved in site deals.
At a Glance
What It Does
Defines 'data center' (single point of interconnection or aggregated facilities) with peak demand >50 MW; gives FERC sole authority to set retail rates for covered utilities’ sales to these data centers starting 90 days after enactment; requires rates to fully allocate interconnection, transmission/distribution, and generation costs associated with data-center growth, and forbids cost-shifting to other retail customers.
Who It Affects
Large cloud, hyperscale, and colocation data centers that draw >50 MW (or aggregated facilities behind one interconnection); investor-owned utilities that sell retail power (excluded: electric coops, municipal/state-owned utilities, TVA, and federal PMAs); FERC and state utility commissions; and elected public officials negotiating data-center construction.
Why It Matters
The bill upends the typical state-by-state retail-rate framework for large electricity customers by centralizing pricing authority at FERC and insisting that data centers bear the full incremental grid costs they impose—potentially raising data-center power prices, changing interconnection cost allocation practices, and creating jurisdictional and implementation questions for utilities and regulators.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill creates a new regulatory category for large data centers by amending the Federal Power Act. It sets a quantitative threshold—facilities (or groups of facilities behind one point of interconnection) with peak electricity demand above 50 megawatts—and places those loads outside the ordinary retail-rate process handled by state utility commissions.
Instead, FERC gains exclusive authority to approve the retail rates a covered electric utility charges a data center, with that authority taking effect 90 days after the statute is enacted.
When FERC approves rates for these customers, the statute requires that the rates incorporate the ‘full costs’ of: (1) building, upgrading, and expanding transmission and distribution facilities needed to interconnect data centers; (2) upgrades needed to preserve bulk-power reliability as data-center demand grows; and (3) constructing, upgrading, or expanding generating capacity needed for reliability during periods when data-center demand increases. The bill explicitly forbids covered utilities from recovering those particular costs from any retail customer other than the data center, i.e., no cost‑shifting to residential or small commercial customers.To enforce the new regime, Congress adds retail sales to data centers to existing enforcement provisions and creates a stand-alone penalty structure: violations of the new data-center section or its rules/orders can incur civil penalties of up to $10 million per day.
The statute carves out certain sellers from the definition of covered electric utility—electric cooperatives, state- or locally owned utilities, the Tennessee Valley Authority, and federal power marketing administrations—so the new FERC authority does not apply to them.Separately, the bill makes predispute nondisclosure clauses unenforceable in court against elected public officials where the clause relates to data-center construction. That change is narrow: it targets predispute clauses and only removes judicial enforceability when the person is an elected official.
Finally, the bill directs the EPA to arrange for the National Academies to perform a focused assessment—within 180 days—on environmental and public-health impacts of data centers (noise, air, water use and supply, carbon, and waste) and to recommend mitigation steps for Congress and agencies to consider.
The Five Things You Need to Know
The bill defines a data center as a single facility or group behind one point of interconnection with peak demand greater than 50 megawatts.
FERC gets exclusive authority, beginning 90 days after enactment, to approve retail rates charged by covered electric utilities to data centers—removing that approval from state retail processes for those transactions.
Rates approved for data centers must include full costs of interconnection, transmission/distribution upgrades for interconnection and reliability, and generation investments tied to rising data-center demand; utilities may not shift those costs onto other retail customers.
Civil penalties for violating the new data-center provisions or associated rules/orders can reach up to $10,000,000 per day for each day the violation continues.
The EPA must arrange for the National Academies to deliver an environmental and public-health assessment with mitigation recommendations within 180 days of enactment.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Designates the act as the 'No Harm Data Centers Act.' This is the statutory label for use in regulations and citations; it has no operative effect beyond naming.
Defines which facilities count as 'data centers'
Adds a definition to the Federal Power Act that captures either a single facility behind one point of interconnection or an aggregate of facilities behind one point of interconnection where the majority of the facilities serve data‑processing functions and total peak demand exceeds 50 MW. That threshold and the focus on a single interconnection are the gatekeepers for the bill’s subsequent FERC authority and cost-allocation rules; developers could respond by changing interconnection designs or load aggregation to stay below the definition.
Gives FERC sole authority to approve retail rates for data centers and sets rate-content requirements
Creates a new section (224) granting FERC exclusive jurisdiction to approve retail rates and charges from covered electric utilities to data centers (notwithstanding certain provisions that normally place retail rate authority with states), effective 90 days after enactment. The section mandates that FERC-approved rates be just, reasonable, and nondiscriminatory and requires that those rates include the full costs of interconnection projects, transmission/distribution upgrades needed for reliability as data-center demand grows, and generation investments linked to reliability. The provision is procedural and substantive: it changes who sets rates and prescribes the types of costs that must be allocated to the data-center customer.
Prohibits cost-shifting and limits which sellers are 'covered utilities'
Specifies that covered electric utilities may not shift the listed costs onto any retail customer other than the data center. It also clarifies who is excluded from 'covered electric utility'—electric cooperatives under section 201(f), state- or locally owned utilities, the Tennessee Valley Authority, and federal power marketing administrations—creating potential jurisdictional gaps and arbitrage opportunities depending on how developers choose sellers.
Expands enforcement language and creates large daily penalties for data-center violations
Amends existing FPA enforcement sections to capture the sale of electric energy at retail to data centers and inserts a new penalty regime: violations of section 224 or rules/orders thereunder expose the violator to civil penalties of up to $10 million per day. The bill also updates penalty-assessment language to emphasize calculating penalty amounts under the new subsection, signaling Congress intends steep fines to deter noncompliance.
Nondisclosure clauses and public officials
Declares that predispute nondisclosure clauses tied to data-center construction are not judicially enforceable against elected public officials. The change is narrow: it does not abolish nondisclosure agreements generally, does not automatically nullify a clause in private arbitration or contract performance, and preserves state laws unless they would prevent the federal rule from taking effect.
National Academies assessment and statutory definitions
Directs the EPA Administrator to seek an agreement with the National Academies to assess environmental and public-health impacts of data centers across noise, air, water consumption and supply, carbon, and waste dimensions, and deliver mitigation recommendations within 180 days to the relevant congressional committees. Section 6 supplies statutory definitions used throughout the act, largely mirroring the data-center definition added to the Federal Power Act and clarifying terms like 'National Academies,' 'predispute nondisclosure clause,' and 'public official.'
This bill is one of many.
Codify tracks hundreds of bills on Energy across all five countries.
Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Residential and small commercial electricity customers — The bill prevents utilities from allocating interconnection, transmission, and generation costs tied to data-center growth to these customers, protecting them from potentially higher rates caused by large industrial loads.
- Local elected officials and communities — Making predispute nondisclosure clauses unenforceable against elected officials increases transparency around site-selection deals and gives public officials more freedom to disclose negotiation details relevant to constituents and local planning.
- Grid planners and reliability advocates — Requiring data centers to bear full incremental costs clarifies who pays for upgrades and creates stronger price signals to internalize reliability and infrastructure impacts.
Who Bears the Cost
- Data centers (hyperscale, cloud, and large colocation operators) — They will likely face higher retail rates that explicitly recover interconnection, T&D upgrades, and generation additions tied to their load growth, altering project economics and site decisions.
- Investor‑owned (covered) utilities — Utilities must change billing, cost-accounting, and rate-design practices to isolate and recover the specified costs from data-center customers, which increases administrative and regulatory burdens and may require new filings at FERC.
- FERC and federal agencies — FERC will assume new retail-rate workload historically handled by states for these customers; EPA must coordinate a rapid National Academies study, both requiring resources, staff time, and expedited rulemaking or guidance to implement the statute.
Key Issues
The Core Tension
The central dilemma is between protecting ordinary electricity consumers and preserving efficient investment and local control: the bill forces large data centers to internalize the grid costs they create—reducing cost‑shifting and protecting residential customers—but in doing so it shifts pricing out of state retail processes into federal hands and may raise power costs enough to deter investment or push developers toward jurisdictional workarounds. Regulators must balance equitable cost recovery and grid reliability against risks of market distortion, jurisdictional conflict, and avoidance strategies.
Two implementation issues loom. First, the statute requires FERC to approve retail rates that include the 'full costs' of interconnection, transmission/distribution upgrades, and generation investments tied to data-center demand, but it does not define how to allocate those costs across time, what depreciation or rate-recovery schedules apply, or how to treat shared-network upgrades that benefit multiple customers.
That gap leaves substantive cost-allocation disputes—between utilities, incumbents, developers, and state regulators—for FERC to resolve, likely through contested cases and technical cost studies.
Second, the bill centralizes authority at FERC for a class of retail transactions while excluding cooperatives, municipal/state utilities, TVA, and federal PMAs. Developers and utilities could respond through corporate structuring, choice of seller, or by splitting loads and interconnections beneath the 50 MW threshold to avoid FERC jurisdiction.
The nondisclosure change is targeted to elected public officials and predispute clauses, but other confidentiality protections (private-party NDAs between companies and unelected staff or contractors) remain enforceable; courts will need to parse the boundaries. Finally, the $10 million-per-day penalty is unusually high and invites rapid litigation over statutory construction and proportionality, potentially slowing enforcement while parties litigate constitutional and administrative-law challenges.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.