By Kennedy Maize
Here’s a simple, even obvious, solution to the threat that data centers pose to the nation’s high-voltage interstate electric transmission grid, but once would have been anathema: get the data centers off the grid. The rise of massive, gigawatt-scale data centers rivaling the electric consumption of entire cities, along with enormous, consumptive amounts of cooling water, has been calling for attention.
The idea has been around for a while but is having a hard time gathering momentum. Houston-based Advocates for Consumer Regulated Electricity has been pushing the advantages of voluntarily getting out from under the heavy load of the federal and state regulations of electric generation. The group worked with the New Hampshire legislature and governor’s office to pass legislation last August allowing data center generators to avoid grid connections. So far, that’s unique.
Now the concept is getting more traction at the state and federal levels. A lot of the focus has been on stalling or preventing data center developments, with an emphasis on their impact on electricity rates for residential consumers.
At the state level, Georgia is moving to cripple new data centers, effectively eliminating their electric load. The Augusta Chronicle recently reported, “Georgia legislators have proposed seven bills regulating data centers by eliminating tax breaks, prohibiting costs from being passed on to residential electricity customers, or temporarily barring their construction entirely.”
The Georgia newspaper added, “Data centers — hulking industrial buildings that power artificial intelligence and technology companies — have emerged as one of the hottest topics at the Georgia Capitol this year as they’ve proliferated across the state’s landscape in recent years…There are more than 200 data centers in Georgia, according to Baxtel, a data center industry research firm.”
Commenting on the Georgia developments, the Guardian noted that the rush for data centers led “at least 10 Georgia municipalities to pass their own moratoriums on datacenter construction, with Atlanta suburb Roswell becoming the most recent earlier this month.” Municipalities in at least 14 states have done the same, according to Tech Policy Press.
At the federal level, concern about data centers has led to some strange ideological allies. Bernie Sanders, Vermont’s independent senator and democratic socialist, late last year announced, “I will be pushing for a moratorium on the construction of data centers that are powering the unregulated sprint to develop & deploy AI. The moratorium will give democracy a chance to catch up, and ensure that the benefits of technology work for all of us, not just the 1%.”
At the other end of the ideological spectrum, Sen. Tom Cotton (R-Ark.), the Arkansas Times reported earlier this year, “has introduced a bill, ‘Decentralized Access to Technology Alternatives,’ or DATA Act, would allow electricity generation and supply systems built exclusively for the purpose of ‘serving new electric loads that were not previously served by any retail electricity supplier’ to bypass regulations under the Federal Power Act.”
The hard-right Cotton, in his second six-year term, chairs the Senate Republican Conference and the Senate Intelligence Committee. In a news release, he said, “The DATA Act of 2026 will eliminate outdated federal regulations and enable manufacturers, data centers, and other energy-intensive industries to build customized electricity systems without impacting existing power grids.
“American dominance in artificial intelligence and other crucial emerging industries should not come at the expense of Arkansans paying higher energy costs. My bill will ensure that America can continue to lead in these spaces by eliminating outdated regulations.”
The eight-page bill creates a moniker for these deregulated entities that has a familiar sound: “Consumer Regulated Electric Utility.” CREU’s “shall be exempt from Federal regulation with respect to matters under the jurisdiction of the Federal Energy Regulatory Commission or the Secretary of Energy….”
Cotton is running for reelection this year and likely will face a tougher race than in 2014 and 2020. In his first Senate race he defeated a weak Democratic incumbent, Mark Pryor, who got under 40% of the vote. In 2020, he faced no Democrat, only a Libertarian candidate, who did better than expected with 35% of the vote, including support by many Democrats.
This year’s race is already drawing interest. Today, the most likely Democratic opponent is Hallie Shoffner, the daughter of a venerable soybeans and rice family farm near Newport in northeastern Arkansas, a Democratic stronghold. She made an economic decision to close the farm in 2024. She has an undergraduate degree from Vanderbilt University and a masters from the Clinton School of Public Service at the University of Arkansas.
In addition to taking on Cotton on the predictable party issues of health care, the economy, and ag issues, Shoffner slammed his DATA act. She told the Arkansas Times, “It’s mere speculation whether Tom’s DATA Act will lower energy costs for Arkansas families and businesses. Arkansas state regulators already have the tools to address this issue, so when Tom says we need a new federal bill, is he working for special interest groups or did he not do his basic homework?”
Shoffner will face Ethan Dunbar, the black mayor of Lewisville and a retired Army sergeant major, in the March Democratic primary. Lewisville is a small town in the southwestern corner of the state, population about 900.