President Donald Trump on Tuesday announced plans to coordinate with technology companies to build their own power generation for data centers. In his State of the Union address, Trump announced a "ratepayer protection pledge" under which he said "major tech companies" would "have the obligation to provide for their own power needs." "They can build their own power plants as part of their factory so that no one's prices will go up, and in many cases, prices of electricity will go down for the community, and very substantially down," Trump said. Trump announced the pledge as part of a larger focus on affordability, which is expected to dominate the midterm election campaign from both parties. In January, Trump posted on social media to express his support for data centers, with the caveat that tech companies should “pay their own way.” “I never want Americans to pay higher Electricity bills because of Data Centers. Therefore, my Administration is working with major American Technology Companies to secure their commitment to the American People,” Trump wrote. Google pledge Trump’s move reflects bipartisan concern over rising energy costs. Earlier Tuesday, the House Science, Space and Technology Committee's oversight panel held a hearing on data center infrastructure, with an emphasis on speeding permitting and increasing energy generation capacity. Republicans, along with witnesses from Google and the Competitive Enterprise Institute, urged an increase in energy supply to help lower costs, which they said could be sped up by revamping the energy permitting process. The subcommittee’s chair, Rep. Rich McCormick, R-Ga., commended companies that are funding new generation capacity themselves. “Data centers consume vast amounts of electricity, sometimes 10 to 50 times more per square foot than traditional buildings," McCormick said. "Under traditional utility rate structures, infrastructure costs are spread across all customers. That also needs to be addressed. That raises serious questions of whether residential ratepayers could end up subsidizing upgrades that primarily serve high-intensity industrial complexes." Marsden Hanna, head of energy and sustainability policy at Google, emphasized the company’s commitment to preventing other energy users from bearing the costs of data center “growth and infrastructure.” “At Google we pay our way," Hanna said. "And that means we pay for 100 percent of the electricity that we use to power our data centers, and it means we structure our contracts so that we are paying for the incremental infrastructure that is needed to power our facility further up the grid.” Hanna testifies on Tuesday. (Bill Clark/CQ Roll Call) Rep. Jay Obernolte, R-Calif., set out two competing narratives. On the one hand, he said, data centers’ energy use could drive up costs. On the other hand, building new capacity, either co-located with a data center or through a local provider, could create excess energy and drive prices down. Democrats pointed to a need for more data on the impact of data center build-outs on communities, including energy costs. The panel’s ranking member, Rep. Emilia Sykes, D-Ohio, worked to thread a needle between support for investment in her district and concern about electricity costs. “We must fully understand the trade-offs of data centers, both the potential they hold for quality jobs and investment in our communities, and the impact on electricity costs, our environment and even our health," she said. Sykes advocated for putting “strong guardrails” in place to protect communities that house data centers, rather than dealing with consequences after the fact. “One path is the Trump administration’s approach: few safeguards, rapid expansion and a total embrace of data centers with little thought to the communities that host them," Sykes said. "That's not the approach that I advocate for, and I hope that we don't take that… road."
