Tech giants and the federal government struck a deal to push more cost burden of data centers to private companies, but it’s unclear how the agreement will manifest. 

At the State of the Union address, President Donald Trump announced new “rate payer protection pledges,” claiming companies will need to provide for their own power needs and “build their own power plants,” purportedly to lower consumers’ bills.

No companies were named and few details were shared about how the initiative would work. 

Tech companies behind the data center boom have previously asserted they would be fronting more costs. Anthropic earlier this month announced it will cover all grid upgrades needed for its data center construction and bringing new power online. Microsoft in January pledged it’ll work with utilities to set its own higher rates and invest in nuclear energy infrastructure. Startups are also finding ways to alleviate energy costs, through hardware and software. 

Statehouses and local council meetings have been bristling with data center conversations over the last few years — including what permanent jobs will be seen, environmental impacts and electric bill concerns. Federal lawmakers have introduced bipartisan legislation requiring data center developers to use power separate from the grid. 

Keep scrolling to get the details on what this agreement means, how it may change electric bills and who could enforce the deal. 

What are the ‘rate payer protection pledges’ Trump announced? 

Trump outlined the “negotiated” plan during the SOTU address in a handful of sentences, claiming tech companies have the “obligation to provide” their own energy for data centers through building their own power plants. He did not outline any formal requirements or terms. 

What tech companies are part of this agreement? 

No specific tech companies were named by Trump during the address, but Anthropic and Microsoft have previously pledged to pay for certain energy costs and the buildout of additional infrastructure. 

Why is the federal government stepping in now? 

Data centers are rapidly scaling in the US, with more than 4,000 across the country. The infrastructure could go from currently consuming 4% of the energy supply to 12% by 2030, per a McKinsey & Company report. 

Electric bills are spiking — an average residents’ bill increased 30% between 2021 and 2025, Grist reported.  

To meet AI infrastructure demands, companies are scrambling to build data centers but are met with a lack of available power. Globally, 11 gigawatts of 2026 capacity are still under construction, according to Sightline Climate. That means as many as half of the world’s data center projects planned to come online will be delayed. 

How could this affect residents’ utility bills? 

Energy costs for the data centers vary by state, depending on rates and demands relative to capacity. Some places are considering and enacting separate, higher rates and instituting less responsibility for residents, including Virginia and Pennsylvania.

Electric bills don’t solely take into account power that’s funneled — it also includes building more and maintaining resources. When more energy infrastructure is needed, all customers pay for new transmission lines and other resources. So, if there’s data center construction in a region that requires more power, the cost is typically spread to everyone. 

Theoretically, this deal with tech companies means residents wouldn’t be tasked with paying for grid upgrades or transmissions line installations specifically for data center use. But it’s unclear how that will be determined or tracked, especially with shared infrastructure like substations. 

Where could tech companies be paying more for energy? 

Data centers are scattered across the country, including in several concentrated pockets. Virginia has 570, mostly in the northern part of the state dubbed “Data Center Alley.” Texas has 408 and Pennsylvania has 408. 

Trump did not name specific geographic regions when discussing this program. 

How could payments be calculated? 

It’s entirely unclear. How tech companies would pay for future data center infrastructure has not been released, nor have any guidelines about which companies would qualify.  

Who could be enforcing this agreement? 

Along with the Federal Energy Regulatory Commission, states and grid systems have their own regulatory bodies and watchdogs.