State and Federal Legislation Targets AI Data Center Power Costs and Construction

Federal and state lawmakers are intensifying regulation of AI-driven data center expansion, citing escalating electricity and water demands that strain grids and raise consumer costs. On Feb. 6, 2026, New York legislators proposed a moratorium on new data center construction within state lines, joining at least five other states with similar measures and a Georgia bill set to pause construction through February 2027. Data center power use doubled in the US between 2018 and 2024 and could triple by 2028, per LBNL. PJM capacity prices rose to $329.17 per megawatt-day for 2026–2027 from $28.92 in 2024–2025. The four major hyperscalers—Microsoft (MSFT), Alphabet (GOOGL, GOOG), Amazon (AMZN), and Meta (META)—are forecast to invest over $650B in AI this year, with Anthropic (ANTH.PVT) and OpenAI (OPAI.PVT) planning to bear grid upgrade and ratepayer impact costs through higher monthly charges. Proposals aim to shift risk allocation via stronger load commitments, interconnection deposits, and developer-funded power use to protect consumers. Developers are shifting to second- and third-tier states with available generation capacity, such as Kentucky and Indiana.