The electricity bill for data centres is being handed back to the data centres

On the final night of California’s 2026 session, lawmakers passed AB 2383 — the Fair Share in Energy Act, authored by Assemblymember Rick Chavez Zbur — and SB 886, authored by Senator Steve Padilla, and sent both to Governor Newsom, who has until the end of September 2026 to sign or veto them.

AB 2383 requires electrical corporations, community choice aggregators and electric service providers to adopt separate generation and transmission tariffs for new large-load customers taking service on or after January 1, 2027, and is drafted to take effect only if SB 886 also becomes law. The measures direct the California Public Utilities Commission to create distinct rates and updated interconnection rules for data centres so that other customers do not fund the generation and grid upgrades built to serve them.

This is not isolated: more than 300 data-centre bills were introduced across 30 state legislatures in the first six weeks of 2026, and at least 18 states have introduced bills creating special rate classes for very large users.

At federal level, the Ratepayer Protection Act (H.R. 9340), sponsored jointly by Representatives Gabe Evans and Kathy Castor, cleared the House Energy and Commerce Committee by 52 votes to nil; it directs state utility commissions to consider requiring data-centre loads of 100 megawatts and above to cover the full cost of the grid upgrades needed to serve them, and it awaits a floor vote. Separately, on September 2, 2026 FuelCell Energy reported its first data-centre power agreement, disclosing that a customer option for up to 350 megawatts of on-site fuel cells added roughly $2.4 billion to its awarded capacity backlog.

Opportunity

Read as a cost story this is trivial: a somewhat higher power price is immaterial against the capital cost of an AI data centre, and the operators would pay it without blinking. That framing misses what the binding constraint actually is.

What limits a data centre is not the price of electricity but the time it takes to get connected — interconnection queues in the major markets run for years, and every one of these measures adds a further layer of tariff design, cost-allocation proceedings and commission process on top of that wait. Hypothesis: the effect of the ratepayer-protection wave is therefore less financial than architectural.

It makes the regulated grid slower and more politically contingent at precisely the moment a customer needs certainty, and the rational response is to stop asking permission — to put generation behind the meter and treat the utility connection as backup.

If that is what happens, the beneficiaries are not the utilities and not the hyperscalers but the people who sell megawatts you can install on your own land in eighteen months, and the timing is set by a signing deadline and a January 1, 2027 effective date rather than by anything in the technology cycle.

How it could play out

Large-load tariffs become standard across a dozen or more states within a year, each with its own commission proceeding and its own timetable. Developers stop treating grid interconnection as the default and start pricing on-site generation into the base case. Orders concentrate on whatever can actually be delivered quickly — reciprocating gas engines, aeroderivative turbines, fuel cells — while large frame turbines remain sold out for years.

Utilities, counter-intuitively, end up in a better position: a large customer contractually obliged to pay the full cost of its own upgrades is a safer counterparty than one whose costs a commission may later disallow. And states that decline to legislate market themselves on speed instead of price.

Questions worth asking

• Who can actually supply baseload power at data-centre scale on a two-year timeline, and which of them has uncommitted manufacturing capacity? This decides the idea. A large gas turbine ordered now arrives near the end of the decade, so the winner is whoever is not in that queue.
• Does AB 2383’s January 1, 2027 trigger create a visible rush to energise before the deadline, and would that show up in California interconnection filings and utility large-load pipelines?
• Is full cost responsibility actually bullish for the utilities? If a large-load tariff removes the risk that a commission later disallows recovery, these laws hand utilities cleaner, safer growth than they had before — the opposite of how the headlines read.
• Which states are moving the other way and openly courting the load, and has land, water rights or generation capacity there repriced yet?
• If the bills are vetoed, does the issue die or move to the commission and the ballot? A veto may delay the cost shift without removing it.

Where to look

• FuelCell Energy and Bloom Energy — on-site generation sold explicitly as a way around the interconnection queue
• Caterpillar and Cummins — reciprocating gas gensets, the unglamorous option that can actually be delivered
• GE Vernova and Mitsubishi Heavy Industries — the turbine suppliers, whose problem is that their slots are already sold
• American Electric Power, Dominion Energy and DTE Energy — utilities whose large-load tariffs would be validated rather than threatened by these rules
• Vistra and Constellation Energy — merchant generators able to contract directly with a data centre
• Digital Realty and Equinix, as the operators who have to solve for power either way

Thesis check

The strength is the sheer simultaneity and the absence of partisan resistance — a 52-to-nil committee vote and 300 state bills describe a settled political direction, not a contested one, and California supplies a dated decision point at the end of September 2026.

The weakness is that the escape route is constrained by the same physics as the problem: fuel cells, engines and turbines all have finite production capacity and multi-year queues of their own, so “they will just generate their own power” may describe a 2029 outcome rather than a 2027 one. Bloom Energy in particular has already had a large move on this theme, which is a reason to look at the less obvious suppliers rather than the famous one.

Sources

CalMatters Digital Democracy, AB 2383 · FOX 11 Los Angeles, Sept 2026 · Daily Energy Insider, 2026 · ArentFox Schiff, 2026 · FuelCell Energy, Sept 2 2026