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Energy Cost Fairness and Reliability Act of 2026

USA119th CongressS-4559| Senate 
| Updated: 5/18/2026
Adam B. Schiff

Adam B. Schiff

Democratic Senator

California

Energy and Natural Resources Committee

  • Introduced
  • In Committee
  • On Floor
  • Passed Chamber
  • Enacted
This bill, titled the Energy Cost Fairness and Reliability Act of 2026, addresses the significant challenges posed by the rapid increase in large load facilities, such as data centers, on the nation's electricity grid. Congress finds that this growth threatens grid resource adequacy, reliability, and electricity affordability for residential consumers. The legislation aims to ensure responsible and sustainable investments in energy infrastructure to support technological growth while maintaining grid stability. The core of the bill requires the Federal Energy Regulatory Commission (FERC) to issue final rules within one year to establish standard interconnection procedures for large loads. These rules will create a formal load interconnection queue system, similar to that for generators. A key provision mandates that large load customers seeking interconnection must pay 100 percent of the costs for interconnection studies and assigned network upgrades, with these payments being nonrefundable. Interconnection for large load facilities will only be approved if they meet specific criteria, including demonstrating technical capability for demand flexibility and curtailability . They must also enter into a binding agreement to exercise these capabilities. Furthermore, large load customers must guarantee they will construct or arrange for new generating facilities to supply their power needs, ensuring their demand does not strain existing resources. The bill also establishes prioritization within the load interconnection queue for facilities that implement battery backup systems, adhere to prevailing wage and registered apprenticeship requirements for construction, or ensure labor peace agreements for energy supply resources. For colocated large load facilities, non-firm transmission access and injection rights are provided on an as-available basis, subject to curtailment and priced accordingly. To protect grid reliability, the bill prohibits existing generating facilities from diverting capacity to serve large loads if it would result in a loss of capacity for other customers without new generation. It reinforces that large load customers are solely responsible for network upgrade costs, explicitly forbidding any crediting mechanisms or cost shifting to other transmission or retail customers. FERC is directed to review cost allocation methodologies to prevent such shifting. The Department of Energy (DOE) is authorized to collect data from data center owners to identify trends in energy and water use, assess AI's energy impact, and establish benchmarks for operational flexibility. This data collection is crucial for refining future energy needs and load shape projections, with strict provisions for protecting confidential business information. Additionally, the bill mandates the establishment of a data-center-scale artificial intelligence testbed at a National Laboratory to research energy-efficient AI, grid integration, and new technologies. The Secretary of Energy must report to Congress and FERC on load growth impacts, screening criteria for interconnection requests, and recommendations for improving forecasting and policy. FERC must then consider these recommendations and take appropriate action. Finally, the bill includes a savings provision clarifying that nothing in the act authorizes FERC to regulate retail electricity rates, charges, or terms of service, which remain under state jurisdiction.
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Timeline
May 18, 2026
Introduced in Senate
May 18, 2026
Read twice and referred to the Committee on Energy and Natural Resources.
  • May 18, 2026
    Introduced in Senate


  • May 18, 2026
    Read twice and referred to the Committee on Energy and Natural Resources.

Energy Cost Fairness and Reliability Act of 2026

USA119th CongressS-4559| Senate 
| Updated: 5/18/2026
This bill, titled the Energy Cost Fairness and Reliability Act of 2026, addresses the significant challenges posed by the rapid increase in large load facilities, such as data centers, on the nation's electricity grid. Congress finds that this growth threatens grid resource adequacy, reliability, and electricity affordability for residential consumers. The legislation aims to ensure responsible and sustainable investments in energy infrastructure to support technological growth while maintaining grid stability. The core of the bill requires the Federal Energy Regulatory Commission (FERC) to issue final rules within one year to establish standard interconnection procedures for large loads. These rules will create a formal load interconnection queue system, similar to that for generators. A key provision mandates that large load customers seeking interconnection must pay 100 percent of the costs for interconnection studies and assigned network upgrades, with these payments being nonrefundable. Interconnection for large load facilities will only be approved if they meet specific criteria, including demonstrating technical capability for demand flexibility and curtailability . They must also enter into a binding agreement to exercise these capabilities. Furthermore, large load customers must guarantee they will construct or arrange for new generating facilities to supply their power needs, ensuring their demand does not strain existing resources. The bill also establishes prioritization within the load interconnection queue for facilities that implement battery backup systems, adhere to prevailing wage and registered apprenticeship requirements for construction, or ensure labor peace agreements for energy supply resources. For colocated large load facilities, non-firm transmission access and injection rights are provided on an as-available basis, subject to curtailment and priced accordingly. To protect grid reliability, the bill prohibits existing generating facilities from diverting capacity to serve large loads if it would result in a loss of capacity for other customers without new generation. It reinforces that large load customers are solely responsible for network upgrade costs, explicitly forbidding any crediting mechanisms or cost shifting to other transmission or retail customers. FERC is directed to review cost allocation methodologies to prevent such shifting. The Department of Energy (DOE) is authorized to collect data from data center owners to identify trends in energy and water use, assess AI's energy impact, and establish benchmarks for operational flexibility. This data collection is crucial for refining future energy needs and load shape projections, with strict provisions for protecting confidential business information. Additionally, the bill mandates the establishment of a data-center-scale artificial intelligence testbed at a National Laboratory to research energy-efficient AI, grid integration, and new technologies. The Secretary of Energy must report to Congress and FERC on load growth impacts, screening criteria for interconnection requests, and recommendations for improving forecasting and policy. FERC must then consider these recommendations and take appropriate action. Finally, the bill includes a savings provision clarifying that nothing in the act authorizes FERC to regulate retail electricity rates, charges, or terms of service, which remain under state jurisdiction.
View Full Text

Suggested Questions

Get AI-generated questions to help you understand this bill better

Timeline
May 18, 2026
Introduced in Senate
May 18, 2026
Read twice and referred to the Committee on Energy and Natural Resources.
  • May 18, 2026
    Introduced in Senate


  • May 18, 2026
    Read twice and referred to the Committee on Energy and Natural Resources.
Adam B. Schiff

Adam B. Schiff

Democratic Senator

California

Energy and Natural Resources Committee

  • Introduced
  • In Committee
  • On Floor
  • Passed Chamber
  • Enacted