US digital economy growth requires power grid upgrades. Who will pay the bill?

Congress must decide how the United States can build the infrastructure its thriving digital economy needs while protecting the host communities.

The Ratepayer Protection Act was recently voted down in the US Senate. With 57 senators voting to advance this plan and 43 against, that vote was less than the 60 votes needed to advance this plan. This is not the end of the story for this political idea. It's the start of a trend that will define the end of this year and the next Congress: the push to regulate every layer of the digital infrastructure and AI stack.

The Ratepayer Protection Act, introduced by Sen. John Husted (R-Ohio) and Reps. Gabe Evans (R-Colo.) and Kathy Castor (R-Fla.), aims to protect households and small businesses from paying for the infrastructure needed by large data centers. This requires that utility regulators and some utilities consider standards that compute facilities with peak power demands of at least 100 megawatts cover the full incremental costs of power generation and grid upgrades required to serve them. States will retain discretion to decide whether to adopt those standards.

Rashan Colbert is the US Policy Director and Digital Energy Council Policy Lead at the Crypto Council for Innovation.

Artificial intelligence and digital asset networks run on facilities that require electricity, equipment, land, and network connections. As these facilities grow, public decisions about their costs and impacts will help determine where and how quickly they are built. A company's plans for computing capacity depend on whether a utility can provide the energy or whether the community trusts the project. At the Crypto Council for Innovation (CCI), we see these questions being transformed into the policy environment for digital assets and the broader digital economy.

Congress is answering a growing public question about whether households and small businesses will pay for the network upgrades needed by large data centers. Parliament approved the rate protection law 417-3. The Senate debate has focused on whether requiring states to consider a cost recovery standard goes far enough. That question will continue to mount, along with growing pressure to explain how the country can build the infrastructure it needs for its digital economy while protecting its host communities.

Responsible development starts with a fair expectation: big new loads should consider the infrastructure needed to serve them, with costs and risks identified before projects move forward. If a utility builds for a customer's anticipated demand, its agreements should address what happens if the customer reduces or leaves operations. Families need to know how their bills will be affected. Developers also need clear expectations before committing capital.

Earlier this year, the president and leaders of many of the biggest tech companies agreed to this principle through a pledge to protect ratepayers. Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI have committed to covering the costs of generating new electricity for their data centers. In July, the White House announced an expansion that would bring more than 200 more utilities, data center developers, cooperatives and states into the effort. Congress must now work out the details of how public policy should give effect to these commitments.

The United States must develop sufficient power and infrastructure to meet its growing needs. Faster development of production, transmission, storage, and equipment can reduce constraints that cost allocation alone does not solve. Delegating the responsibility for upgrading the network still leaves the task of licensing it, procuring equipment and building it. Public policy should make this process more predictable while maintaining the protection of communities and the environment.

Applicable laws must be based on operational reality. A proposed campus faces decisions about utility services and local approvals long before its first server goes live. Policy makers need to understand these dependencies. Utilities, regulators, developers, and computing companies each have some of this knowledge, and their experience should inform the rules governing new projects. Communities should have an opportunity to ask questions, while choices about location and infrastructure can still change.

The ratepayer debate is a prototype of the choices Congress and states will face in the digital infrastructure stack, from key inputs like energy to critical infrastructure, including data centers, chips, and servers, to the boundary models they use. Each layer raises distinct questions. A rule on model safety has a different purpose than urban tariffs, while the infrastructure constraints underlying those models affect the entire stack and many adjacent issues.

We should expect these debates to intensify as lawmakers respond to voters and leadership begins to craft an agenda for the next Congress. The challenge will be to understand how individual decisions fit together. Energy policy shapes availability calculations. Decisions about data center development affect where investment flows. The consequences extend to digital assets, artificial intelligence and other products and services that depend on a physical foundation.

CCI's Digital Energy Council brings companies into the policy debate in these relevant sectors, drawing on their direct experience in building and operating the systems that power the digital economy. Our work will focus on expanding US energy capacity and strengthening grid reliability, considering a practical path from a proposed facility to an operating facility.

It is a national imperative that the United States build the capacity needed for the digital economy in a responsible manner, making costs transparent and assuring communities that growth will serve them as well. As a CCI coalition, the Digital Energy Council reflects what CCI has always done: bring together industry leaders, in this case, across digital assets, artificial intelligence, and energy to develop and advocate for sensible, substantive, data-driven policies that drive economic growth, protect consumers, and preserve national security.

Note: The opinions expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Diversified RWA stablecoins maintain a 5-7% return on real credit as crypto capital drops to 4%. GENIUS increases performance off-chain. TAM increases to $4 billion in 3 years.