By many accounts, the rapid growth of data centers is driving a surge in electricity demand across the United States, prompting states to adopt new policies that have to balance encouraging innovation and economic development with customer affordability. Concerns about power-hungry AI centers and customer bills have led to states as politically diverse as New York and Texas to impose temporary pauses on certain data center projects. Other states such as Virginia, Ohio, Pennsylvania and Georgia are using special tariffs, long-term contracts, minimum charges, and financial requirements to ensure data centers bear more of the costs and risks associated with their electricity demand. Other approaches include broader interconnection reforms, and environmental and community protections, seeking to incentivize new growth while ensuring ratepayers see the benefits as well.
New York
On July 14, 2026, Gov. Kathy Hochul issued Executive Order 62[1] establishing a temporary statewide moratorium on new hyperscale data centers while the state develops stronger standards for data center development and a framework to ensure local benefits. The policy focuses on the effects of large facilities on electricity, water, the environment, and host communities. Gov. Hochul has emphasized that existing customers should not bear the costs of transmission and other infrastructure built primarily to serve new large data center loads. The administration has also proposed requiring large facilities to provide their own power or pay a premium for grid service. New York’s approach also considers where and under what conditions large data centers can move forward.
Texas
On August 3, 2026, Gov. Greg Abbott directed[2] the PUCT and ERCOT to conduct a comprehensive audit of data centers in the ERCOT interconnection process. Covered projects cannot move forward until the audit is complete, and projects that do not meet applicable requirements may be denied grid connection. The audit will examine each project’s electricity demand and plans for on-site generation, responsibility for electric infrastructure costs, use of water and water-efficient cooling technologies, potential impacts on surrounding communities, public financial assistance, and ownership.
Pennsylvania
On August 18, 2026, Gov. Josh Shapiro issued Executive Order 2026-05[3] establishing requirements that data center developers must satisfy before state agencies review certain permit applications. The requirements address energy affordability, environmental protection, workforce and economic development, transparency and community engagement. The order also removes AI data center proposals from the state's Fast Track permitting process, prohibits nondisclosure agreements for data center projects and directs the creation of a public map of proposed projects that have engaged with the Department of Environmental Protection. Additionally, the Pennsylvania PUC has examined interconnection and tariff issues associated with large-load customers, particularly the rapid growth of data centers and other energy-intensive facilities. In May 2026, the Pennsylvania PUC adopted a model large-load tariff applicable to customers at or over 50 MW individually or 100 MW in the aggregate[4]. The model provides a framework for Pennsylvania utilities to address interconnection costs, financial security, minimum contract terms, demand charges, load ramping, early termination, and infrastructure upgrades, with the overarching goal of ensuring that costs attributable to large-load customers are not unreasonably shifted to existing ratepayers.
Ohio
Ohio has adopted specific utility tariff requirements for data center customers.
Electric utility AEP Ohio's Data Center Tariff, approved by the Public Utilities Commission of Ohio in 2025, requires new data center customers to make financial commitments before receiving service, including load-study fees, a multi-year load ramp, and long-term contractual obligations. Contract capacity generally must increase from at least 50% in the first year to 90% by the fourth year. The tariff is designed to align customer commitments with the costs of serving large loads and associated infrastructure investments. In February 2026, AEP Ohio reported that developers had signed binding contracts for 5,642 MW under the tariff, in addition to 12,219 MW of contracts signed before the tariff took effect.
Virginia
In Virginia, the State Corporation Commission has directed utilities to develop tariffs that would assign the costs of transmission infrastructure built specifically to serve data centers and other large-load customers to those customers. The decision followed Gov. Abigail Spanberger’s request that state regulators consider how transmission costs associated with data center growth are allocated among customer classes[5]. The change is intended to reduce the portion of these costs borne by residential and small-business customers, with the state projecting that the approach could save Virginia ratepayers hundreds of millions of dollars.
Georgia
In December 2025, the Georgia PSC approved[6] an agreement with Georgia Power supporting nearly 10,000 MW of new generation, with approximately 80% expected to serve data center demand. The framework includes financial protections under which Georgia Power bears certain costs if projected data center demand does not materialize, along with additional mechanisms to address excess generation. The Georgia PSC has indicated that residential and small-business customers should be protected from higher bills if projected data center demand does not materialize. Georgia’s approach allows utilities to plan for anticipated growth while allocating some of the risk to utilities and large-load customers.
South Carolina
South Carolina is considering a more comprehensive statutory framework. S. 902, introduced in 2026, would establish a Data Center Siting Act requiring PSC approval before a data center could begin operating and giving the South Carolina PSC authority over data center-related rates, utility agreements, cost allocation and infrastructure investments. The proposal also addresses water and operational efficiency, environmental impacts, infrastructure adequacy, noise, decommissioning and financial assurances. A separate proposal, S. 867, would expand South Carolina PSC authority over data center rates and utility agreements while encouraging energy efficiency, storage, on-site generation and demand response. Together, the proposals demonstrate how the debate is expanding beyond who pays for electricity to what standards a data center must meet before it is allowed to operate.
Maryland
In August 2026, the Maryland Office of People’s Counsel urged[7] the Maryland Public Service Commission to consider how generation costs associated with projected data center growth could affect residential customers, noting that PJM decisions could result in hundreds of millions of dollars in data center-related costs being allocated to Maryland customers over the next 15 years. The issue reflects a broader consideration for PJM states that even when a utility does not directly build generation for a data center, regional capacity and transmission markets can affect how those costs are allocated among customers.
Overall, states are taking steps to manage the rapid growth of data centers and prevent the costs and risks of serving these large loads from being shifted to existing customers. Collectively, these policies reflect a growing effort to balance economic development and data center growth with affordability, reliability, environmental protection, and consumer cost protection.
[1] First Statewide Moratorium on New Hyperscale Data Centers Launched by Governor Kathy Hochul (Governor’s Press Office, July 14, 2026).
[2] Governor Abbott Directs Comprehensive Data Center Audit (Office of the Texas Governor, August 3, 2026).
[3] Executive Order 2026-05 (Governor’s Office, August 18, 2026).
[4] Interconnection and Tariffs for Large Load Customers Final Order (Pennsylvania PUC, May 12, 2026).
[5] ICYMI: After Filing by Governor Spanberger, SCC Requires Data Centers to Pay for New Transmission Infrastructure (Governor of Virginia, August 10, 2026).
[6] Georgia PSC Commissioners Approve Agreement for New Power infrastructure (Georgia Public Service Commission, December 19,2025).
[7] Immediate action needed to protect consumers from data center-driven costs, OPC tells State regulators (Sears, August 11, 2026).
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