Many of the country’s largest utilities on Thursday joined President Donald Trump’s ratepayer protection pledge calling on data center developers to pay for their own energy upgrades.
American Electric Power, NextEra Energy, Duke Energy, and Southern Co. are among the new signatories, which overall has expanded to nearly 200 utilities, data center companies, and a handful of Republican governors. Seven hyperscalers initially signed the pledge in March, including Amazon, Google, Microsoft, Meta, and Oracle.
The voluntary pledge is aimed at ensuring data centers’ skyrocketing power demands don’t raise energy bills for consumers. Its framework largely reflects the kinds of large-load tariffs that 25 utilities around the country have either implemented or proposed for hyperscalers, according to a Latitude Intelligence analysis — with more being filed this year. That includes subsidiaries of AEP, NextEra, Duke, and Southern Co.
The White House and some utilities are touting billions of dollars in cost savings due to the pledge and new investments from data centers. Yet utilities have also asked state regulators to approve $18.6 billion in rate hikes so far this year. It’s a trend that’s likely to continue, several analysts told Latitude Media.
That’s partly because special deals with data centers often don’t touch the wide range of factors that cause rate hikes, from regional transmission line upgrades to storm hardening to gas and electricity prices. Plus, the costs of serving new factories, buildings, and electrified transportation are also rising. Meanwhile, in PJM, the data center boom is mostly to blame for the soaring capacity auction charges that are spread across all customers.
“I often see statements from utilities that there are cost savings attributable to data centers and then see filings to significantly increase rates. It’s complicated,” Abe Silverman, a research scholar at Johns Hopkins, said in an email to Latitude Media.
It’s hard to separate the costs of serving data centers from other loads, he explained. And while the capacity increases in PJM are almost entirely due to data centers, utilities in the region were also making grid investments before the AI boom.
“Still, it is notable that the rhetoric doesn’t always match reality,” Silverman added.
Rate contradictions
The White House took credit for a handful of utility-hyperscaler deals that have announced long-term savings for customers, even though they all predated Trump’s ratepayer protection pledge. Two of those deals include rate hike freezes.
DTE Energy, for example, forecast that its Google contract would deliver $1.7 billion in “affordability benefits” over 20 years and promised not to file another rate hike until at least 2028 — as long as both Google and Oracle get their data centers online. But that would be a short reprieve for its Michigan customers, because state regulators have approved nearly $500 in rate hikes since 2025 and DTE requested another $500 million increase this year.
Georgia Power, a subsidiary of Southern Co., in July 2025 froze rates through 2028 and attributed that to revenue from data centers and manufacturers. The utility said the growth also allows it to lower rates by $102 a year for residential customers in 2029. The move followed six separate rate increases between 2022 and early 2025 to pay for grid upgrades, new nuclear reactors and high fuel costs.
Meanwhile, Entergy Louisiana has said its deals with Meta for an AI data center campus in Richland Parish will save customers nearly $3 billion over 20 years. But Gov. Jeff Landry and other state officials have raised concerns about the utility’s separate plan to buy an aging gas plant in Texas, which a Public Service Commission consultant said would primarily serve Meta’s complex and lead to rate increases for other customers, the Louisiana Illuminator reported.
Entergy and Meta denied that characterization, instead claiming the gas plant is for general growth in power demand. The PSC will ultimately vote on whether to approve Entergy’s request to buy the plant.
‘Real teeth’ comes from feds
The debate in Louisiana underscores the challenges of holding data centers and utilities accountable to their promises, especially without mandatory state-wide or federal regulations.
While the White House pledge may encourage laggard states and utilities to adopt greater consumer protections, it isn’t enforceable. For now, it’s a patchwork of utilities leading the charge.
“Real teeth could come from FERC or Congress,” explained Latitude Intelligence analyst Nick Zenkin.
Some efforts by FERC are underway, including its June “show cause” orders directing regional grid operators to revise their processes for connecting data centers and other large loads. That includes ensuring tariffs have “cost recovery agreements” so data center projects pay for the energy infrastructure built to support them. But FERC said it will be up to the states “to ensure that there is no cost shifting among retail customers.”
Meanwhile, the House Energy and Commerce Committee this week advanced its own ratepayer protection bill with bipartisan support. It would require state public utility commissions to consider a strategy to make data centers pay their own way.
Silverman, however, isn’t betting on Congress.
“In a different political environment, I would say this was a job for Congress,” he said. “Ultimately, if there is a solution here, it’s going to be bold state leaders that solve the energy-data center challenge.”
He acknowledged that’ll be challenging, too, even though there’s widespread agreement among Republicans and Democrats about putting data centers on the hook for the costs.
“Multi-state action is politically challenging, and no state can protect themselves entirely from higher market costs associated with data centers,” he said. “That’s why PJM and FERC action is ultimately necessary.”
