AI data centers are the largest new source of electricity demand in decades, and the cost of serving them is landing on household bills. PJM's December capacity auction hit its price cap and, for the first time, fell short of its reliability target, with data center load the primary driver.
States are responding. Florida's SB 484, effective July 1, writes a retail cost-of-service standard for large loads into statute, following Texas's interconnection-focused SB 6. Florida's four investor-owned utilities filed large-load tariffs by the October 1, 2026 deadline, and on November 3 the Public Service Commission voted 5-0 to reject Duke Energy Florida's. New Jersey, Oklahoma, Oregon, and California have also passed binding statutes, and eight other states are moving through tariffs, rate cases, studies, investigations, and merger reviews.
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SB 484 requires utilities to show that large loads pay their own cost of service, which audits what the utility charges the data center. It does not set the price a utility pays its own affiliated generator. That price answers to two other reviews: Florida's affiliate transaction rule, 25-6.1351, which subjects affiliate transactions to Commission review and caps non-tariffed affiliate purchases at the lesser of fully allocated cost or market price, and FERC review of affiliate wholesale contracts. The open question is how those reviews apply when the purchase serves a single large customer.
The peg: Florida's four investor-owned utilities filed large-load tariffs by October 1, 2026, and the Commission rejected Duke Energy Florida's 5-0 on November 3. Duke must file new tariffs. Rule 25-6.1351, Florida Administrative Code
Florida's four investor-owned utilities filed large-load tariffs under s. 366.043(8), Florida Statutes, by the October 1, 2026 deadline: Tampa Electric (Docket 20260146-EI), Florida Public Utilities (20260148-EI), Florida Power & Light (20260149-EI), and Duke Energy Florida, whose petition was filed April 22 in Docket 20260064-EI. A filing is not a settled price. On October 22, Commission staff recommended denying Duke's tariff with leave to refile, on two grounds: it applies only to firm load, a limit the statute does not contain, and Duke offered no evidence that its existing rates cover each large customer's full cost of service. On November 3 the Commission voted 5-0 to deny the tariff, finding it excludes certain qualifying customers and that Duke did not show its rates and protections reasonably ensure each large customer bears its full cost. Duke must file new tariffs, including a proposed large load rate schedule. (Commission news release, November 3, 2026.)
The peg: Staff recommendation, Document No. 07477-2026, filed October 22, 2026; Commission agenda conference November 3, 2026. SB 484 applies to any customer with an anticipated monthly peak load of 50 MW or more at a single location. Staff recommendation (PDF) · Enrolled bill text
PJM's independent market monitor found that data centers accounted for $6.5 billion of the $16.4 billion in costs from the December capacity auction, and $6.2 billion of that relates to data centers not yet built. If forecast load never materializes, the costs stay on household bills: a stranded-asset risk regulators are only beginning to stress-test.
The stat: $6.2 billion of December's auction costs trace to data centers that could come online by 2027/28 but have not been built. Monitoring Analytics report, via Utility Dive, Jan. 2026
Statutes in Texas and Florida. Commission tariffs in Pennsylvania and Wisconsin. A 45 percent data center rate proposal in Arizona. Merger review in the Carolinas, a study law in California, a rate-class fight in Virginia. The mechanism differs by state; the principle does not: load creators pay for the load they create. This is arriving on a bipartisan basis, and the state-by-state contrast is the story.
The peg: PJM's December 17, 2025 auction cleared at its $333.44 per MW-day cap and fell 6,623 MW short of its reliability requirement, a first. PJM news release · Full fourteen-state reference
Fourteen states with active state-level action on large-load cost allocation. Instruments range from binding statutes to open investigations, and the tracker labels each one.
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Load creators should pay for the load they create. When a data center triggers billions in grid investment and every household absorbs the cost, the market is not functioning. The fix is aligning incentives, not restricting commerce.
The cost of serving a data center does not show up as a line item on your bill. It arrives years later as a general rate increase, after the equipment is built into the rate base and earns the utility an authorized return for thirty or forty years. By the time the bill comes, the decision that caused it is locked in.
Florida's SB 484 audits what the utility charges the data center. It does not set the price the utility pays its own affiliated generator. That price answers to Florida's affiliate rule and to FERC, not to the new law. The front door now has its own review. The seam between the two is the thing to watch.
Florida passed a statute. Pennsylvania and Wisconsin moved through their utility commissions. Different mechanisms, one rule: data centers fund the capacity their demand requires. This is not an anti-growth position. It is market logic, and it is arriving on a bipartisan basis.
Each figure below was checked against the primary source linked under it. Dockets move quickly; the verification date is in the strip at the top of this page.
The regulatory seam in one image: what SB 484 audits, and what it does not reach. Run it with credit to markmcnees.com.
SB 484 requires a tariff that reasonably ensures the large customer bears its own cost of service. This transaction is now reviewed.
The internal price the utility pays its own generator is set inside the same corporate family. SB 484's cost-of-service review does not set it. Florida's affiliate rule, 25-6.1351, reviews affiliate transactions and caps non-tariffed affiliate purchases at the lesser of fully allocated cost or market price, and a wholesale power contract with an affiliated generator runs under FERC review.
The front door is now guarded. The back door sits in the seam between state and federal review.
Three longer pieces for when a story needs the mechanics, not just the quote. Every figure links to its source.
What the studies actually measure, who pays when a grid operator buys backstop capacity, and what federal regulators ordered.
A sourced estimate of the cost of serving one large data center, with every assumption stated separately and a range, not a single number.
Why the right to curtail matters more than a price cap, and why spreading a cost lowers the average without answering who pays.
Where this research has been quoted. Headlines link to the outlet.
Quotes here are reproduced with the punctuation the outlet published, dashes included. On August 12, 2026 a quote in this section was restored to the punctuation Bisnow published after it had been rendered with a comma in place of a dash.
By Maddy McCarty and Billy Wadsack. Published August 11, 2026, 8:30pm ET.
“This is not a moratorium like we're seeing other places,” McNees said. “Abbott's not stopping anybody from building – it's just putting a condition in front of getting connected to the grid.”
“It'll be a little bit of chaos, but I don't think what they're asking is very difficult,” said Mark McNees.
Descriptor as published: a faculty member at Florida State University's Jim Moran College of Entrepreneurship who has researched data center cost allocation across 13 states [14 as of August 10, 2026]. Bisnow topic page
By Samantha Putterman, PolitiFact Florida. Published August 11, 2026.
“Saying rates ‘will not’ go up because of (the law) claims an outcome the statute does not deliver,” said Mark McNees, a Florida State University professor who researches how AI data centers can affect consumers.
By Samantha Putterman, PolitiFact Florida. Published August 11, 2026.
“Saying rates ‘will not’ go up because of (the law) claims an outcome the statute does not deliver,” said Mark McNees, a Florida State University professor who researches how AI data centers can affect consumers.
By Samantha Putterman, PolitiFact Florida. Published August 11, 2026.
“Saying rates ‘will not’ go up because of (the law) claims an outcome the statute does not deliver,” said Mark McNees, a Florida State University professor who researches how AI data centers can affect consumers.
By Samantha Putterman, PolitiFact Florida. Published August 12, 2026.
“Saying rates ‘will not’ go up because of (the law) claims an outcome the statute does not deliver,” said Mark McNees, a Florida State University professor who researches how AI data centers can affect consumers.
Dr. Mark R. McNees directs the MS in Social and Sustainable Enterprises at Florida State University's Jim Moran College of Entrepreneurship, where he is Sustainability Entrepreneur in Residence. His research and commentary cover the economics of who pays when data centers connect to the grid: utility rate structures, ratepayer cost shifting, and the state laws now reshaping who funds the buildout.
He has been quoted in national outlets on data center electricity costs and tracks large-load tariff dockets in fourteen states. He holds a doctorate in organizational leadership from George Fox University and a graduate certificate from Harvard University.
