Bill Aims to Keep Data Center Costs Off Utility Bills

As demand for cloud computing, artificial intelligence, and digital services continues to surge, data centers are rapidly expanding across the United States. While these facilities play a critical role in the modern economy, they also place significant demands on electricity grids and water systems—raising questions for policymakers about who should ultimately bear those costs.

In Wisconsin, lawmakers are stepping in with legislation designed to ensure that families and small businesses are not left paying higher utility bills as a result of large-scale data center development.

On January 5, 2026, Senator Romaine Quinn, alongside Representative Shannon Zimmerman, introduced a bill that would prevent electricity costs tied to data centers from being passed on to other utility customers. The proposal reflects growing concern that the energy-intensive nature of these facilities could strain existing infrastructure and shift financial burdens onto residents who receive no direct benefit from the expansion.

Balancing Growth With Consumer Protection

Data centers are increasingly drawn to states offering reliable energy access and supportive regulatory environments. While their development can bring investment and jobs, lawmakers in Wisconsin say those benefits should not come at the expense of ratepayers already living and working in the state.

“When new growth in data centers indicated significant new electricity demands, I became concerned that costs could be shifted onto Wisconsin families and small businesses,” Quinn said. “The bill I am introducing will prevent utility companies from passing their electricity costs on to any other customer. Wisconsin is open for business — just not at the expense of ratepayers already here.”

The legislation establishes a clear boundary: utility companies would be prohibited from spreading data center energy costs across the broader customer base. Instead, data centers would be responsible for covering the electricity costs associated with their operations.

Onsite Energy and Water Use Requirements

In addition to protecting ratepayers, the bill outlines several requirements intended to promote responsible development and resource use.

Any renewable energy used to power a data center would be required to be generated onsite. This provision aims to prevent renewable energy capacity from being redirected away from other customers on the grid to accommodate large-scale industrial users.

Water usage is also a central focus of the proposal. Data centers often rely on significant volumes of water for cooling, prompting concerns about long-term sustainability. Under the legislation, data centers would be required to use closed-loop water systems for cooling, ensuring that water is recycled rather than continually withdrawn from local supplies.

Facilities would also be required to annually report their total water usage, creating transparency around consumption levels and allowing regulators and communities to better understand the impact of these operations.

Land Reclamation and Financial Safeguards

The bill further includes provisions aimed at protecting communities from abandoned or incomplete development projects. Data center operators would be required to file a bond or other security sufficient to cover the cost of reclaiming the site if necessary.

If construction of a proposed data center is not completed, the owner would be responsible for restoring the parcel of land to the condition that existed prior to construction. Lawmakers say this requirement is intended to prevent partially developed sites from becoming long-term liabilities for local governments and surrounding communities.

“With guardrails in place, Wisconsin can be a leader in the digital economy while protecting residents and ensuring responsible development,” Quinn said.

Part of a Broader National Trend

Wisconsin’s proposal comes as other states across the country take similar steps to address the infrastructure and cost pressures created by data center growth.

Ohio was among the first states to act. In July, the Public Utilities Commission of Ohio approved a new rate class requiring new data center customers to pay for a portion of their requested energy capacity—even if they ultimately use less. The goal was to ensure that the cost of building new transmission lines and generation capacity is borne by the facilities that require it.

Earlier in the year, the Oregon House of Representatives passed legislation granting regulators the authority to determine which customers are the primary beneficiaries of new energy infrastructure and to allocate costs accordingly, signaling a shift toward more targeted responsibility for large-scale users.

Virginia has also moved in this direction. In September, Dominion Energy proposed a new rate class for data centers consuming more than 25 megawatts of power and maintaining a high monthly load factor. If adopted, the proposal would apply to many of the state’s approximately 450 data centers, formally placing them in a distinct customer category with different cost obligations.

Setting Expectations as the Digital Economy Grows

Together, these efforts highlight a growing recognition among state lawmakers and utility regulators that data centers present unique challenges. While the facilities are essential to the digital economy, their scale and resource demands require careful oversight.

Wisconsin’s legislation places the state firmly within this national conversation, emphasizing fairness, transparency, and accountability as data center development continues to expand.