S.Amdt. 6840

SA 6840. Mr. VAN HOLLEN (for himself, Ms. Alsobrooks, Mr. Booker, Ms.
Duckworth, Mr. Durbin, and Mr. Welch) submitted an amendment intended
to be proposed by him to the bill H.R. 9340, to amend the Public
Utility Regulatory Policies Act of 1978 to establish a Federal standard
relating to the recovery of the full, incremental costs of upgrades
that serve large-load customers, and for other purposes; which was
ordered to lie on the table; as follows:

Redesignate section 2 as section 4.
Insert after section 1 the following:

SEC. 2. SENSE OF CONGRESS.

It is the sense of Congress that--
(1) because of current energy policies and electricity
market structures, households and businesses are subsidizing
data center development, paying the way for data centers
through rising energy bills;
(2) recent analysis indicates that data centers are set to
more than double their electricity consumption, accounting
for 6.7 percent to 12 percent of all energy demand by 2028,
which is causing electricity prices to increase for
ratepayers;
(3) ratepayers should not be forced to take on the
financial risks and costs of new infrastructure investments
needed to support projected data center energy demands;
(4) data center owners and operators should be held
accountable for the increased energy costs that data centers
are causing;
(5)(A) the uniquely large size, rapidly increasing pace,
and uncertain nature of projected energy demand from data
centers are impacting both grid reliability and the
affordability of electricity;
(B) energy demand from data centers is also significantly
impacting interstate commerce by putting a strain on the
electric grid and causing reliability issues and energy costs
to rise across State lines; and
(C) therefore, increased Federal oversight is necessary to
ensure that the interconnection of data centers to the
electric grid does not create reliability or affordability
risks;
(6) data centers directly affect the transmission system
and can increase transmission costs, regardless of whether
they are connected directly to transmission facilities;
(7) any policy solutions seeking to hold data center owners
and operators accountable as described in paragraph (4)
should also seek to minimize the climate and environmental
impacts of data center development while creating good-paying
jobs;
(8) the Commission has authority, pursuant to the mandates
to ensure just and reasonable and not unduly discriminatory
rates (as established under sections 205 and 206 of the
Federal Power Act (16 U.S.C. 824d, 824e) (including the
standards developed under those sections)) and grid
reliability (as established under section 215 of that Act (16
U.S.C. 824o) (including the standards developed under that
section)), to require grid operators to create ``load
queues'' for data centers that incentivize certain practices,
including payment for required system upgrades and voluntary
load flexibility;
(9) grid operators, as part of their mandate to provide
reliable transmission service, have the authority to create
load queues specific to data centers that delay or deny
interconnection in order to ensure reliability, and it is not
``unduly discriminatory'' to do so under the Federal Power
Act (16 U.S.C. 791a et seq.) because data centers, as a
single customer class, constitute enough new load to
overwhelm the electric grid if their interconnection to the
electric grid is left unchecked; and
(10)(A) some States are implementing processes to create
rate classes specific to data centers, which are necessary to
protect ratepayers from unfair costs and unnecessary risk,
given the uncertain nature of data center energy demand
projections and the high costs associated with the energy
demands of data centers; and
(B) rate classes specific to data centers should be adopted
more broadly across all States to help ensure that, across
the United States, energy system cost increases caused by
data centers are paid for by data center owners and
operators.

SEC. 3. DEFINITIONS.

In this Act:
(1) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(2) Covered interconnection entity.--The term ``covered
interconnection entity'' means--
(A) an Independent System Operator (as defined in section 3
of the Federal Power Act (16 U.S.C. 796));
(B) a Regional Transmission Organization (as defined in
that section); and
(C) a transmitting utility (as defined in that section)
that is responsible for managing data center load
interconnection requests (or the appropriate regional grid
planning entity for the transmitting utility (as determined
by the Commission)).
(3) Data center.--The term ``data center'' means any
facility, or group of facilities with the same owner located
in the same utility area, that--
(A) primarily contains electronic equipment used to host
information and information systems accessed by other systems
or by users on other devices both in and outside of the State
in which the facility or group of facilities is located;
(B) may be--
(i) a free-standing structure; or
(ii) a facility that--

(I) is within a larger structure; and

[[Page S5180]]

(II) uses environmental control equipment to maintain the
proper conditions for the operation of electronic equipment;

(C) has an energy demand greater than 50 megawatts;
(D) meets such other criteria as the Commission determines
to be appropriate for purposes of this Act, including
anticircumvention provisions; and
(E) is not owned by the Federal Government.
(4) Data center load queue.--The term ``data center load
queue'' means a load queue that--
(A) relates specifically to data center load
interconnection requests; or
(B) relates to requests made by distribution utilities or
load-serving entities (as those terms are defined in section
217(a) of the Federal Power Act (16 U.S.C. 824q(a))) to study
impacts on the transmission system caused by the
interconnection of data centers.
(5) Data center owner or operator.--The term ``data center
owner or operator'' means any person, including a
corporation, that owns, builds, or operates a data center.
(6) Facility used to mine cryptocurrency.--The term
``facility used to mine cryptocurrency'' means any facility,
or group of facilities with the same owner located in the
same utility area, that--
(A) is used to mine or create cryptocurrencies or other
blockchain-based digital assets;
(B) may be--
(i) a free-standing structure; or
(ii) a facility that--

(I) is within a larger structure; and
(II) uses environmental control equipment to maintain the
proper conditions for the operation of electronic equipment;
and

(C) meets such other criteria, such as a minimum peak
electricity demand, as the Commission determines to be
appropriate for purposes of this Act.
(7) Labor organization.--The term ``labor organization''
has the meaning given the term in section 2 of the National
Labor Relations Act (29 U.S.C. 152).
(8) Labor peace agreement.--The term ``labor peace
agreement'' means a written agreement between an employer and
a labor organization through which the employer guarantees
that--
(A) the employer will be neutral regarding any of the
employees of the employer seeking to be represented by the
labor organization; and
(B) if employees seek to be represented by a labor
organization, the employer shall recognize the labor
organization as the exclusive bargaining representative on a
showing that a majority of the employees choose to be
represented by the labor organization.
(9) Load growth.--The term ``load growth'' means increasing
demand for electricity.
(10) Load interconnection request.--The term ``load
interconnection request'' means the request of a data center
owner or operator to connect, or study the feasibility of
connecting, a data center to the electric grid, whether at
the transmission or distribution level.
(11) Organic load growth.--
(A) In general.--The term ``organic load growth'' means
load growth that is attributable to increases in demand
associated with economic or population growth, including with
respect to hospitals, educational institutions, advanced
manufacturing facilities, residential homes, electric
vehicles, and other facilities, as determined by the
Commission.
(B) Exclusion.--The term ``organic load growth'' does not
include load growth that is attributable to--
(i) data centers; or
(ii) facilities used to mine cryptocurrency.
(12) Project labor agreement.--The term ``project labor
agreement'' means a pre-hire collective bargaining agreement
with 2 or more labor organizations of which building and
construction employees are members that--
(A) establishes the terms and conditions of employment for
a specific construction project; and
(B) is an agreement described in subsections (e) and (f) of
section 8 of the National Labor Relations Act (29 U.S.C.
158).
(13) Qualifying battery energy storage system.--The term
``qualifying battery energy storage system'' means a utility-
scale battery energy storage system that is connected to the
electric grid and paid for by a data center owner or
operator, including through a power purchase agreement or
other bilateral contract, regardless of whether the battery
energy storage system is onsite or offsite with respect to
the data center.
(14) Qualifying load flexibility agreement.--The term
``qualifying load flexibility agreement'' means an agreement
between a covered interconnection entity and 1 or more data
center owners or operators--
(A) that--
(i) is implemented by the covered interconnection entity;
and
(ii) complies with the minimum standards and guidelines
established by the Commission under section 5(c); and
(B) pursuant to which--
(i) data centers may be interrupted by the covered
interconnection entity; and
(ii) to the extent that the covered interconnection entity
determines that load shedding, curtailments, or other grid
protection is needed, data center service interruptions shall
occur--

(I) before service interruptions for other grid users; and
(II) before emergency conditions occur, as defined in the
emergency procedures established by the interconnection
entity.

(15) Registered apprenticeship program.--The term
``registered apprenticeship program'' means an apprenticeship
program registered under the Act of August 16, 1937 (commonly
known as the ``National Apprenticeship Act'') (50 Stat. 664,
chapter 663; 29 U.S.C. 50 et seq.), that meets the standards
of parts 29 and 30 of title 29, Code of Federal Regulations
(as in effect on the date of enactment of this Act).
(16) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
Insert after section 4 (as so redesignated) the following:

SEC. 5. DATA CENTER LOAD QUEUES.

(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Commission shall issue a rule
requiring all covered interconnection entities to create, for
the purpose of addressing reliability and affordability
concerns from new data center loads, regardless of whether
those loads are connecting directly to the transmission
system or through a distribution utility, a data center load
queue system--
(1) that gives priority for interconnection to data centers
(including data center owners and operators) that, by
implementing each of the strategies described in subsection
(b), offset their electricity demand on the electric grid,
reducing costs for all ratepayers, while also mitigating
local air and noise pollution and providing good-paying job
opportunities; and
(2) pursuant to which data centers are connected to the
electric grid in a manner that does not interfere with
serving organic load growth, which may include delaying or
denying interconnection for a data center if the applicable
covered interconnection entity determines that such
interconnection is likely to adversely affect--
(A) the reliability or resource adequacy of the electric
grid; or
(B) the affordability of electricity or electric capacity
for users of the electric grid that are not data centers.
(b) Strategies Described.--The strategies referred to in
subsection (a)(1) are the following:
(1) Bringing new, additional supply resources to the
electric grid that--
(A) are designated for the service of, and paid for by, the
data center owner or operator, including through a power
purchase agreement or another bilateral contract;
(B) are deliverable to the location where the new data
center is interconnecting;
(C) are maintained for the lifetime of the data center;
(D) have at least enough capacity--
(i) to fully serve the new data center; or
(ii) to serve that portion of the capacity need of the new
data center that is not offset by 1 or more qualifying
battery energy storage systems, virtual power plants, or
qualifying load flexibility agreements;
(E) have a generation output that--
(i) is substantially similar to the temporal load profile
of the data center during peak demand; or
(ii) is sufficient to fill any gaps in the temporal load
profile of the data center during peak demand that are not
offset by 1 or more qualifying battery energy storage
systems, virtual power plants, or qualifying load flexibility
agreements; and
(F) are low- or no-carbon forms of generation.
(2) Incorporating low- or no-carbon backup generation,
which excludes diesel generation and may include behind-the-
meter battery energy storage systems.
(3) Ensuring that, in the construction of the data center
and any new energy supply resource that the data center
brings to the electric grid pursuant to paragraphs (1) and
(2)--
(A) all laborers and mechanics employed by the data center
owner or operator and contractors and subcontractors of the
data center owner or operator, in the performance of
construction, shall be paid wages at rates not less than
those prevailing on projects of a character similar in the
locality in which the construction project is located, as
most recently determined by the Secretary of Labor in
accordance with subchapter IV of chapter 31 of title 40,
United States Code; and
(B) all contractors and subcontractors of the data center
owner or operator use registered apprentices participating in
registered apprenticeship programs.
(4) Ensuring that the operator of any new energy supply
resource that the data center brings to the electric grid
pursuant to paragraphs (1) and (2) agrees that the operator
will use a labor peace agreement for the operation and
maintenance of the energy supply resource.
(c) Qualifying Load Flexibility Agreements.--
(1) In general.--The Commission shall establish minimum
standards and guidelines for qualifying load flexibility
agreements.
(2) Requirements.--The standards and guidelines established
under paragraph (1) shall--
(A) reduce costs for ratepayers by minimizing the need for
the build out of new generation and transmission; and
(B) ensure that qualifying load flexibility agreements can
be effectively implemented by the covered interconnection
entity.
(d) Priority.--For purposes of priority in a data center
load queue under subsection

[[Page S5181]]

(a)(1), with respect to forms of generation described in
paragraphs (1)(F) and (2) of subsection (b), priority shall
be determined using a sliding scale pursuant to which
additional priority is given for forms of generation having
lower carbon intensity, such that the lower the carbon
intensity of the applicable form of generation, the higher
the priority given to the applicable data center in the data
center load queue.
(e) Effect of Certain Agreements.--
(1) Contractor or subcontractor.--Any individual contractor
or subcontractor of the data center owner or operator that is
a signatory to a pre-hire collective bargaining agreement
described in subsections (e) and (f) of section 8 of the
National Labor Relations Act (29 U.S.C. 158) that covers
construction work on the data center and any new energy
supply resource that the data center brings to the electric
grid shall be deemed to be in compliance with subsection
(b)(3).
(2) Project labor agreement.--If a project labor agreement
is used to construct a data center and any new energy supply
resource that the data center brings to the electric grid,
the data center (including the data center owner and
operator) shall be deemed to be in compliance with the
requirements of subsection (b)(3).
(f) Labor Standards.--With respect to the labor standards
specified in subsection (b)(3)(A), the Secretary of Labor
shall have the authority and functions set forth in
Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5
U.S.C. App.) and section 3145 of title 40, United States
Code.
(g) Deadline for Compliance.--The Commission shall ensure
compliance with the rule issued under subsection (a) by the
date that is 1 year after the date on which the rule is
issued.
(h) Prohibition.--On and after the effective date of the
final rule issued under subsection (a), a data center that is
not already interconnected with the electric grid may not
interconnect with the electric grid unless the data center
has fully advanced through the applicable data center load
queue system created under that subsection.

SEC. 6. LOCAL TRANSMISSION COST ALLOCATION.

Not later than 120 days after the date of enactment of this
Act, the Commission shall direct each public utility (as
defined in section 201(e) of the Federal Power Act (16 U.S.C.
824(e))) to file 1 or more tariff amendments pursuant to
section 205 of that Act (16 U.S.C. 824d) that--
(1) allocate to each interconnecting data center local
transmission upgrade costs that, but for the existence of the
data center, would not be needed; and
(2) require data centers to pay transmission rates
applicable to their rate class that reflect the embedded cost
of the integrated grid, not including those local
transmission upgrade costs that are required to be allocated
to specific data centers under paragraph (1).

SEC. 7. CREATION OF APPROPRIATE RATE CLASSES.

(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall establish a
program to provide grants and technical assistance to State
regulatory authorities (as defined in section 3 of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602)) and
nonregulated electric utilities (as defined in that section)
considering the standard established by paragraph (22) of
section 111(d) of that Act (16 U.S.C. 2621(d)) to assist in
the creation of appropriate rate classes to ensure that costs
relating to the energy demands of data centers, including
costs of generation, transmission, and distribution network
upgrades, are not borne or subsidized by customers that are
not data centers.
(b) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.

SEC. 8. LOAD AND INTERCONNECTION FORECASTING.

(a) Technical Assistance.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall establish a
program to provide technical assistance to support the
forecasting by covered interconnection entities of long-term
load projections, particularly with respect to improving
forecasting associated with data center load interconnection
requests.
(2) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this subsection.
(b) Transparency and Disclosure.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, to improve the forecasting of
electricity demand and data center load interconnection
requests by covered interconnection entities across the
United States, the Commission shall establish transparency
and disclosure requirements for data center load
interconnection requests, including load interconnection
requests occurring at the transmission level and load
interconnection requests occurring at the distribution level.
(2) Requirement.--The requirements established under
paragraph (1) shall seek to reduce duplicative, speculative,
and other requests that impede accurate forecasting,
including by imposing new transparency and information-
sharing requirements for utilities and covered
interconnection entities to implement with respect to data
center load interconnection requests, as the Commission
determines to be appropriate.
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