A new bill from Sen. Tom Cotton, R-Ark., would let artificial intelligence (AI) data center companies bypass federal electricity regulations by building their own independent energy infrastructure.
Cotton’s DATA Act of 2026 comes as Congress and Trump administration officials are being told that data centers popping up across the nation are raising electricity prices for local communities and straining an already thin grid.
“American dominance in artificial intelligence and other crucial emerging industries should not come at the expense of Arkansans paying higher energy costs,” Cotton said in a statement. “My bill will ensure that America can continue to lead in these spaces by eliminating outdated regulations.”
Companies that build independent infrastructure to power their data centers would fall under a new utility category called “consumer-regulated electric utilities” (CREUS). These utilities would need to be completely disconnected from the main grid and built solely to serve new electric loads.
If a CREUS connects to the grid – even temporarily – it would lose its exempt status and become fully subject to federal regulation, under the proposal.
Specifically, CREUS would be exempt from the Federal Power Act, including Federal Energy Regulatory Commission (FERC) rate regulation, reliability standards, interconnection rules, transmission planning, and merger approval.
The Department of Energy predicted this fall that half of all new American electrical power will be consumed by AI data centers by 2030 and warned that planned power supplies tethered to the grid will fall short of the supply needed to meet demand.
Rising energy costs associated with that demand have begun to play a larger role in national politics, including Virginia’s recent gubernatorial race. Some congressional lawmakers have warned that their districts have reported higher utility bills.
Additionally, just last week, Michael Kratsios, director of the White House Office of Science and Technology Policy, said that the Trump administration will be working to create more opportunities and benefits for communities near data centers, while encouraging companies to build their own energy supplies.
“That’s something that we’re pushing a lot of the folks in the big data center companies to work on, and something we’re gonna be doing for a very long time ahead,” Kratsios said.