The Power for the People Act of 2026 requires the Federal Energy Regulatory Commission to force covered interconnection entities (ISOs, RTOs, and relevant transmitting utilities) to implement data center–specific load queue systems and minimum standards that prioritize interconnection for projects that bring dedicated, low- or no‑carbon supply, battery storage, or binding load‑flexibility commitments paid for by the data center owner/operator. The bill defines a data center threshold (greater than 50 MW) and conditions priority on labor and environmental measures.
In parallel, the bill directs public utilities to file tariffs allocating local transmission upgrade costs to interconnecting data centers, amends PURPA to push states to consider data‑center‑specific rate classes (with suggested elements such as higher demand charges, longer contracts, CIAC, and minimum deposits), and funds technical assistance and forecasting and transparency requirements to reduce speculative queue entries. The measures aim to shift costs and reliability risk away from general ratepayers and onto data center owners and operators while promoting low‑carbon resources and labor standards.
At a Glance
What It Does
The Act compels FERC to issue a rule (180‑day deadline) that requires covered interconnection entities to run separate data center load queues that can delay or deny interconnection if reliability or affordability is threatened, and to give queue priority to data centers that procure deliverable low‑carbon generation, qualifying battery storage, or execute qualifying load‑flexibility agreements. It also requires utilities to propose tariff language allocating local transmission upgrade costs to data centers.
Who It Affects
Major hyperscale and large commercial data center owners/operators (facilities >50 MW), ISOs/RTOs and transmitting utilities that manage interconnection, state utility regulators and public utilities required to consider data‑center rate classes, and power project developers contracted by data centers (generation, storage).
Why It Matters
This bill reassigns the financial and operational burden of large, fast‑growing data center loads from general ratepayers to the data center industry, introduces labor and environmental conditions into interconnection priority, and creates federal pressure for states to change rate design, which could materially affect data center project economics and siting decisions.
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What This Bill Actually Does
The core requirement is predictable: FERC must, within 180 days, write a rule forcing each ISO/RTO and any transmitting utility that handles data center interconnection requests to run dedicated 'data center load queues.' Those queues will give higher interconnection priority to facilities that bring new, deliverable low‑ or no‑carbon generation, qualifying battery storage, or legally enforceable load‑flexibility commitments paid for by the data center owner or operator. The bill explicitly allows grid operators to delay or deny interconnection if adding a data center would harm reliability or make electricity less affordable for non‑data‑center customers.
The bill supplies specificity about what counts as a data center (including groups of facilities under common ownership in one utility area and a >50 MW minimum peak demand) and what qualifies for priority: generation must be deliverable to the interconnection site, maintained for the data center’s lifetime, and complement the temporal peak profile; backup generation must be low‑ or no‑carbon (diesel excluded); and qualifying load‑flexibility agreements must meet minimum standards FERC will issue. It also conditions queue priority on labor protections for construction and energy project builds—prevailing wages, registered apprenticeships, and labor peace agreements for operations.On cost allocation and rate design, the Act directs public utilities to file tariff amendments within 120 days to charge interconnecting data centers for local transmission upgrades that would not be needed but for the data center.
At the federal level, the bill amends PURPA so every state with existing or proposed data centers must formally consider creating a data‑center rate class and complete that consideration within set deadlines (commencement within one year, final decision within two years), with suggested elements such as minimum demand charges, longer contract terms, CIAC, deposit increases, and 'clean transition' mechanisms.The Department of Energy gets grant and technical assistance responsibilities: money and support for states drafting rate classes, and programs to help ISOs/RTOs improve long‑term load forecasting for data center interconnection requests. Finally, FERC must set transparency and disclosure rules to reduce speculative or duplicative queue filings.
The Act contains compliance deadlines (rule issuance, tariff filings, state proceedings) and a hard prohibition: after FERC’s rule takes effect, new data centers cannot interconnect unless they have fully advanced through the data center load queue.
The Five Things You Need to Know
FERC must issue a rule within 180 days requiring ISOs/RTOs and relevant transmitting utilities to create data center load queues and establish minimum standards for qualifying load‑flexibility agreements.
The bill defines a data center to include any facility or group of facilities with a common owner in a utility area that has energy demand greater than 50 megawatts and is not federally owned.
Public utilities must file tariff amendments within 120 days to allocate local transmission upgrade costs to interconnecting data centers and to set transmission rates for data center rate classes that exclude those allocated local upgrade costs.
PURPA is amended to require each state with an existing or proposed data center to begin consideration of a data‑center rate class within one year and complete that determination within two years, with suggested elements like minimum demand charges, longer contract lengths, higher deposits, CIAC, and optional clean transition tariffs.
After FERC’s final rule is effective, a data center not already interconnected cannot interconnect until it has fully progressed through the applicable data center load queue; the rule also conditions queue priority on bringing deliverable low‑ or no‑carbon generation, qualifying battery systems, or binding load‑flexibility agreements and on meeting wage and apprenticeship requirements for construction.
Section-by-Section Breakdown
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Sense of Congress on cost and reliability impacts
This prefatory section sets the policy frame: Congress finds that rapid data center load growth is increasing electricity prices and stressing reliability, that ratepayers should not subsidize those costs, and that FERC has authority to act under the Federal Power Act to avert undue discrimination while protecting reliability. Practically, it signals congressional intent to treat data centers as a distinct load class that can justify different interconnection and rate treatment.
Key definitions (data center, load queue, qualifying resources)
The bill supplies operational definitions that matter for compliance: a 'data center' threshold (>50 MW), 'data center load queue' scope (transmission and distribution interconnection requests), 'qualifying battery energy storage system', and 'qualifying load flexibility agreement'. These definitions gate who is covered and what commitments earn queue priority; the Commission retains authority to add anticircumvention criteria and other thresholds.
FERC‑mandated data center load queues and priority criteria
FERC must promulgate a rule within 180 days requiring covered interconnection entities to run data‑center‑specific queues that prioritize projects that bring and maintain deliverable low‑ or no‑carbon generation, battery storage, or qualifying load‑flexibility agreements paid for by the data center. The section allows covered entities to delay or deny interconnection to protect reliability or affordability, ties priority to carbon intensity via a sliding scale, and imposes labor standards (prevailing wages, apprenticeship usage, labor peace for operation) as part of priority eligibility. The rule must be implemented within one year of issuance, and no new data center may interconnect after the rule’s effective date without progressing through the queue.
Local transmission upgrade cost allocation
Within 120 days the Commission must direct public utilities to file tariffs reallocating local transmission upgrade costs to the specific data centers that necessitate them. The bill distinguishes those allocated local upgrade costs from embedded grid costs, requiring data centers to bear the former while tariffs for data center rate classes should reflect integrated grid embedded costs excluding those allocated local upgrades.
PURPA amendment: push states to adopt data‑center rate classes
The Act amends PU RPA to add a new standard directing states to consider establishing data‑center rate classes and lists suggested design elements—minimum demand charges, extended contract terms, higher study deposits, permissible staged 'load ramp' periods, CIAC, and a 'clean transition tariff.' It also creates a compliance timetable (start consideration within one year, complete within two) and preserves prior state actions that already addressed comparable standards.
Federal grants, technical assistance, forecasting, and transparency
DOE must set up grant and technical assistance programs to help states design rate classes and to support ISOs/RTOs and utilities in long‑term load forecasting related to data centers. FERC must issue disclosure rules within 180 days to curb speculative or duplicative interconnection filings and improve information sharing across utilities and covered entities. Both agencies get authorization to appropriate 'such sums as necessary' to run those programs.
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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
- Local ratepayers and residential customers — by shifting explicit local transmission upgrade costs and some reliability risk to data center owners, the bill is designed to reduce the likelihood that general customers shoulder the capital costs and rate increases caused by large new loads.
- Grid operators (ISOs/RTOs and transmitting utilities) — the law gives them statutory cover and new tools (separate load queues, ability to delay/deny interconnection) to manage rapid concentrated load growth and to prioritize projects that are less damaging to reliability and carbon goals.
- Unionized construction and energy workers — the bill ties queue priority to prevailing wages, registered apprenticeships, and labor peace agreements, creating stronger leverage for union labor standards on data center‑related construction and operations.
Who Bears the Cost
- Data center owners and operators — the bill requires them to fund deliverable generation or qualifying battery storage, accept stricter interconnection scrutiny, potentially pay allocated local transmission upgrade costs and higher interconnection study deposits, and meet labor and apprenticeship requirements tied to priority.
- Public utilities and state regulators — they must design and implement new tariffs, consider or adopt new rate classes within statutory timelines, and administer CIAC and expanded study/deposit regimes, creating regulatory workload and potential litigation exposure.
- Project developers (generation and storage built for data centers) — will face contractual requirements (deliverability, lifetime obligations) and may need to accept labor and operational terms (labor peace, registered apprenticeships) that change project cost structures.
Key Issues
The Core Tension
The bill's central dilemma is balancing grid reliability and cost‑causation against economic growth and project certainty: it aims to prevent ratepayer subsidies and grid strain by forcing data centers to internalize costs and commit to firm, low‑carbon supply and labor standards, but doing so raises the bar for data center developers in ways that may slow investments, push projects to jurisdictions with laxer rules, or encourage legal challenges over federal and state authority boundaries.
The bill creates a potent mix of market‑design, cost‑allocation, labor, and environmental levers but leaves important operational questions unresolved. FERC will need to define precise standards for 'deliverability' and the lifetime obligations for generation that a data center must procure; those definitions determine whether a purchase contract with an out‑of‑state project satisfies the rule or whether the obligation forces onsite or local procurement.
The anticircumvention language is vague: grouping facilities under common ownership in one utility area captures one form of aggregation, but owners could respond by fragmenting ownership or structuring contracts to avoid the >50 MW threshold. Establishing minimum standards for qualifying load‑flexibility agreements will be technically onerous—balancing sufficient firmness to guarantee reliability benefits against commercial flexibility data centers require.
On cost allocation and state rate design, the bill steers states toward a menu of tools (demand charges, CIAC, longer contracts) but stops short of federal preemption of rate decisions; that preserves state discretion but produces legal and economic patchworks across jurisdictions. The tariff directive to allocate 'local transmission upgrade costs' will generate disputes over what costs are truly local versus systemwide, and over how to treat stranded assets if data center demand projections fall short.
Finally, the labor conditions tied to queue priority are politically and legally consequential: tying interconnection priority to prevailing wages, apprenticeships, and labor peace may be effective at raising job standards but risks constitutional or statutory litigation if opponents argue the conditions exceed FERC's interconnection authority or conflict with other federal labor laws.
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