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By Giulia Carbonaro
Senior Reporter
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The Senate is expected to take up the Ratepayer Protection Act this week, bipartisan legislation that promises to safeguard U.S. households and small businesses from higher utility bills driven by the energy demands of AI data centers.
The bill already passed the House with overwhelming support on September 16, with 417 lawmakers voting to push it forward and only three opposing it. This broad endorsement reflects lawmakers’ desire to respond to Americans’ concern over data centers, as public opinion has recently turned against the power-hungry facilities due to soaring electricity bills, local water shortages and pushback over the constant humming and whirring caused by heavy-duty cooling fans and backup generators.
With only a few weeks to go before the midterms, the passing of the bill would help Senator Jon Husted of Ohio in particular, who authored the proposal in the upper chamber, as the Republican lawmaker is facing fierce attacks from his Democratic opponent in November, former Senator Sherrod Brown of Ohio, on the issue of data centers.
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"Jon Husted led the charge to bring data centers to Ohio, forcing Ohioans to pay thousands more in higher electric bills and giving giant out-of-state corporations billions of dollars in out-of-control tax breaks," Lauren Chou, a spokesperson for Brown’s campaign, said in a statement to POLITICO. "Ohioans should get to decide if data centers are built in their communities and should never be forced to subsidize the electricity costs of big corporations."
Husted has hit back, defending the purpose of the bill. "The Ratepayer Protection Act would REQUIRE data centers to pay their own way based on the respective state’s determination. Senator Husted’s bill outlines a federal standard. It then requires states to consider that standard and determine what would best address their own state's individual needs. Then data centers would be REQUIRED to comply. Many states have already said they want to protect ratepayers by making data centers pay for their own electricity grid and production—and his bill does just that," a spokesperson for Husted told Newsweek.
The Senate already refused to approve the Ratepayer Protection Act under unanimous consent earlier on September 17, as Senator Martin Heinrich of New Mexico, the top Democrat on the Senate Energy and Natural Resources Committee, said the measure does not go far enough to protect U.S. consumers. "Congress needs to pass real legislation with real teeth," he said.
Another legislative solution, the GRID Savings Act, introduced by Heinrich in July 2026, would require very large electricity users—such as AI data centers consuming 150 MW or more—to pay for the grid upgrades needed to connect them. It would also give FERC clearer authority over these connections and establish standards for studies, timelines, phased service, and cost allocation.
Others have made similar criticisms of the proposed legislation, with Jim Walsh, policy director with Food and Water Watch, telling The Guardian that "the bill is posing as a consumer protection measure when in reality it will increase costs on consumers across the board."
Below, Newsweek looks at everything we know about the impact of AI data centers on their local communities.
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Do Data Centers Lead to Higher Utility Bills?
The AI data center boom has been so rapid that their impact is still being assessed by experts. But the data available at the moment suggest that data centers and their energy demands are in fact contributing to higher energy bills for households living nearby.
The Environmental and Energy Study Institute (EESI) reports that electricity prices in the U.S. had been flat at around 13 cents per kilowatt-hour (kWh) for more than a decade before 2019, partially because of energy efficiency policies introduced during these years. But, by the end of 2025, average electricity prices in the nation had increased to 19 cents per kWh from 2019, or 27 percent higher.
The reason for this increase, as suggested by EESI, is the request of 700 gigawatts of power connection development made that same year by data centers to dozens of utilities across the country. An analysis conducted by Bloomberg found that in states with a high concentration of data centers like Virginia, electricity now costs up to 267 percent more for a single month than it did five years ago.
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Ultimately, the size and location of a data center determine how much it leans on the local grid and its impact on utility bills for affected communities. With more hyperscale data centers being built across the country, an increase in electricity use for local communities is almost inevitable, as these facilities "can use the same amount of electricity daily that a small or medium-sized city, around 80,000 houses, would use daily," explained Hannah Wiseman, professor of law at Penn State Dickinson Law.
"Even with price caps, when there is this much demand and not enough supply, we will still likely see higher prices," she said.
What Impact Do They Have on Water Supplies?
Water-guzzling data centers consume and heat millions of gallons of water, partially to cool down their servers but mainly to generate the enormous amounts of electricity they require to operate.
According to EESI, a medium-size data center can consume up to roughly 110 million gallons of water per year for cooling purposes alone, equivalent to the annual water usage of approximately 1,000 households. Bigger data centers can consume up to 5 million gallons per day, or about 1.8 billion annually, equivalent to the needs of a town of 10,000 to 50,000 people.
There are currently more than 3,000 operational data centers in the U.S., as reported by the Pew Research Center, and thousands more are being built.
While there are no reports of water shortages caused by data centers so far, there are serious concerns that this might happen in the future, especially as most planned data centers are being built in locations that have been under drought conditions in the past few years, according to data from Cleanview and the federal government analyzed by The Guardian.
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How Do Data Centers Impact Housing Prices?
The debate over data centers’ impact on utility bills and energy use has also extended to their impact on adjacent communities and housing prices. Do people want to live near an AI data center, or would people leave neighborhoods hosting one? Would their presence increase home values, or sink them?
Research on this topic is still limited, but analysts at Realtor.com found that home prices near newly opened data centers have kept pace with comparable neighborhoods. The study, based on millions of home sales, listings and property tax records alongside facility-level data center insights from Aterio, concluded that home values hold steady when a large data center opens nearby, "with no gains or losses large enough to represent a meaningful difference."
Housing supply followed a different trend. Three years after a large data center opened, nearby ZIP codes retained 66 percent of their previous inventory of homes for sale, against 43 percent in comparable neighborhoods without one. Construction also initially outpaced the wider metro area, before falling slightly below the metro average by year three.
That could reflect homes taking longer to sell in these locations, more homeowners putting properties on the market as they plan to move away, or a combination of both.
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"The data center buildout has moved fast and it is raising policy, community, and housing-market questions as it spreads and accelerates," said Danielle Hale, chief economist, Realtor.com.
"Our analysis so far offers some reassurance: in the communities we studied, a new data center opening nearby wasn't associated with meaningfully higher or lower home values than similar neighborhoods that didn’t get one. But the facilities coming online next are bigger, more remote and landing in communities with less experience managing an industrial neighbor, so that track record may not hold as a guide to what comes next."
There are several unknown factors, however, especially as the next wave of data centers is going to rise in places that tend to be lower-income, lower-density and farther from city centers—a different profile from the ones of operating data centers.
"Right now, the data shows that home prices near new data centers are keeping pace with similar neighborhoods. But the footprint is growing fast, and it’s moving into different kinds of communities. What we don’t know yet is whether that pattern holds as data centers spread farther out and into lower-income areas, or what the longer-term effects will look like as more of them come online," Joel Berner, senior economist at Realtor.com, said in a statement shared with Newsweek.
There is also another way that data centers could affect home prices. U.S. homebuilders have complained about data center developers paying "impossible prices" for land and outbidding homebuilders, leaving them to face a "losing battle" as the country faces a chronic affordable housing shortage.
What the Ratepayer Protection Act Would Do About It
The bill now with the Senate would establish federal standards for state regulators when reviewing proposals for new customers if they have an electricity demand of 100 megawatts or more—which would include large AI data centers that Americans have grown increasingly hostile to and wary of.
The legislation would also recommend charging large electricity customers for extra grid update costs through "special rate structures or other agreements." According to the office of Colorado Republican Representative Gabe Evans, who introduced the bill in the House, the Ratepayer Protection Act would also ensure that utilities and existing ratepayers are not left paying for infrastructure if they scale back operations or leave the system.
Will the Bill Pass the Senate?
Democratic leaders in the Senate have voiced their opposition to the bill, with Senate Minority Leader Chuck Schumer of New York calling it "fraud" and urging colleagues to kill the proposal on the floor. "Sen. Husted’s bill is a fraud, it’s voluntary, no company has to do it. The bill we have is mandatory. It is much stronger, and it is what is needed," the senator said last week. The bill is "voluntary," as it only requires state utility commissions to 'consider' standards rather than mandating them.
"Senate Democrats' argument against the Ratepayer Protection Act is a cop-out and blatantly ignores what the American people are asking for. Senator Husted's bill is the best and only option for Congress to lower electricity costs—206 House Democrats supported it and it passed overwhelmingly 417-3. It would be law right now if a Senate Democrat didn't block it. If Senate Democrats want to be the lone obstacle to passage, then they don’t really care about affordability," a spokesperson for Husted told Newsweek.
Newsweek contacted former Senator Brown for comment by email on Tuesday and is awaiting their responses.
Contact Newsweek editors on this story: Matthew Robinson, James Debens and Cristina Diciu.
Update, 10/6/2026 6:00 a.m. ET: This article was updated with comments from Sen. Husted's spokesperson.
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