Congress Takes Aim at Data Center Costs, But the Real Problem Is What Comes Next

What Happened

On September 16, 2026, the House passed legislation aimed at lowering data center costs, with overwhelming bipartisan support. The Washington Post reported that the bill represents one of Congress's first attempts to regulate what has become an increasingly unpopular category of facilities. The same reporting noted, however, that the measure is unlikely to produce immediate price reductions for consumers or businesses.

The bill's main provision grants states new authority to manage data center siting and costs, a shift reflecting growing frustration with the current regulatory vacuum. Data centers, the massive facilities that power cloud computing, AI training, and the digital infrastructure most Americans depend on, have proliferated in number and energy demand over the past five years, driven largely by the AI boom.

What It Means for You

Data centers consume enormous amounts of electricity. The U.S. Energy Information Administration projects that data centers will account for 10 to 15 percent of total U.S. electricity consumption by 2030, up from roughly 4 percent in 2020. That electricity comes from the grid you're connected to, and when demand spikes, grid operators manage that load through higher wholesale prices that eventually appear on your electric bill.

They also consume vast quantities of water for cooling. In drought-stressed regions like Arizona and Texas, these facilities compete directly with agricultural and municipal water supplies. A single facility can use 400 million gallons per year, equivalent to the water needs of several thousand households.

But the most direct impact on your wallet comes through corporate tax avoidance. Large technology companies operating data centers have historically claimed accelerated depreciation and other tax deductions for these assets, reducing their federal and state tax bills. When corporations pay less, working people and small businesses pay more.

The Bigger Picture

Data centers represent a genuine American infrastructure need. The digital economy is real. Yet the current model allows states and local communities to absorb environmental and grid costs while corporations capture profits and minimize tax obligations.

Between 2015 and 2024, the number of data center facilities in the United States more than doubled, with most clustering in regions offering tax incentives, cheap land, and abundant power. Virginia alone hosts roughly 30 percent of the world's data centers, largely due to enormous tax breaks offered to corporations like Amazon and Google. Meanwhile, ratepayers in those states face higher electricity costs as grid infrastructure struggles to keep pace.

The bill grants states power to regulate siting and cost structures, a necessary move given federal inaction. But as the Post noted, this won't immediately lower prices. Price-setting in data center markets remains opaque. Most prices are negotiated in private contracts between large corporations and facility operators. Small and mid-sized businesses often have no alternatives; they pay the quoted rate or move operations, which costs far more.

The tax question matters here. If data center operators were required to pay full corporate income tax instead of relying on depreciation schedules designed for an earlier era, they would have more reason to keep costs down. Instead, the current tax code subsidizes expansion, which in turn subsidizes the corporations using these facilities.

Where This Goes

The bipartisan vote suggests data centers have become unpopular enough to demand action. Congress appears to recognize the issue affects real people, their electricity costs, their water access, their tax burden.

Yet a bill that empowers states without addressing the federal tax incentive structure amounts to a partial solution. It treats the symptom rather than the underlying problem. States will negotiate better rates and environmental standards, which matters. But the wealthiest corporations will still work within those negotiations to minimize their contributions.

What happens next depends on whether Congress will ask: who should bear the cost of this infrastructure? If the answer is "the companies profiting from it plus their ratepayers," then state regulation helps but remains incomplete. If the answer is "a system where tax policy asks more of those who have the most," then data center taxation becomes part of a broader rebalancing, which is where the Common Good Party's plan begins.