April 28, 2026
The Honorable Bob Latta
Chairman, Subcommittee on Energy
Washington, DC 20515
The Honorable Kathy Castor
Ranking Member, Subcommittee on Energy
Washington, DC 20515
Dear Chairman Latta, Ranking Member Castor, and Members of the Subcommittee:
On behalf of National Taxpayers Union NTU), the nation’s oldest taxpayer advocacy organization, I write to express our views ahead of the Subcommittee’s hearing on data centers and their impact on ratepayers. This is an incredibly important and timely issue that is certainly top of mind for many Americans. We hope this hearing centers on practical ways to address energy affordability rather than serves as a venue to scapegoat a burgeoning industry that is driving economic growth and tax revenues in communities across the country. These and other fiscal implications mean that data center policies are directly relevant to taxpayers as well.
As you know, artificial intelligence and the hyperscale data centers that power them are relatively new technologies, so some public uncertainty and hesitation over these trends is understandable. At the same time, parts of the media and some activist groups have portrayed data centers as the primary driver of rising residential electricity costs in certain regions. However, the evidence does not support the claim that data centers are the sole—or even dominant—cause of recent or projected increases in household utility rates.
Recently, the annual “Retail Electricity Price Trends and Drivers” study from the Lawrence Berkeley National Laboratory (LBNL) demonstrated that a variety of complex factors contribute to electricity costs, often in ways that contradict the narratives of data center opponents. Nationally, the single biggest driver of retail price increases between 2024 and 2025 was the simple base costs for fuel; 30 states saw a jump of 2% or more due to this factor.
Currently, the states with the highest electricity rates are Hawaii, California, Connecticut, Rhode Island, and Massachusetts. Aside from California, the data center buildout in these states is relatively small. Another cause for high energy prices is the unsustainably subsidized and expedited transition away from traditional baseload power generation. Many of the aforementioned states have committed to 100% renewable energy on unrealistic timetables and have shut down conventionally fueled facilities that produce power at an affordable rate.
Virginia, for example, is known for its large concentration of data centers, particularly in its northern suburbs. Unsurprisingly, Virginia has electricity rates exactly in the middle of statewide averages. This is because The Old Dominion has a smartly diversified energy mix that puts economics and sound science before politics.
Data centers are physical infrastructure that underpins economic growth nationwide, similarly to factories and other business and industrial zones. Setting data centers apart, however, is their ability to house technology that can boost efficiency and productivity in those factories, laboratories, or other facilities nationwide. President Trump has committed to a manufacturing and productivity renaissance and the current data center buildout is an important part of making this vision a reality.
While there are concrete numbers on how much energy data centers utilize on-site, projections of total energy requirements in the future vary widely. The disparity between the estimates can be ascribed to several factors. These include the regulatory pressure to estimate long-term energy usage projections and the role of utility companies and regional transmission organizations in production and delivery. While technology may reduce data centers’ energy consumption per unit over time, it is critical to upgrade our nation’s energy infrastructure to account for potential increased energy demand across both residential and commercial use.
To be clear, there is more to do to ensure energy remains affordable for working class Americans, especially as energy demands from many parts of our economy and society are slated to surge in the years ahead. President Trump’s energy dominance agenda is working thanks to pro-growth tax cuts, more predictable leasing schedules, and deregulation. The most important step Congress can take is to address the lengthy red tape that strangles large scale energy projects—such as drilling, pipelines, refineries, export terminals, transmission lines, and generation facilities—from coming online in a speedy manner. Projects that meet clear legal requirements are routinely delayed for years due to overlapping agency reviews, unclear timelines, and excessive litigation. These delays ultimately hurt workers, ratepayers, and taxpayers, while providing little additional environmental benefit.
We encourage you to work on a comprehensive permitting reform package that can reach the president’s desk this year. Already, the House has passed dozens of pro-growth permitting bills that would make a meaningful difference for our country.
Separately, as it relates to the regulation of data centers and AI, we urge you to adhere to a handful of principles:
1. Focus on benefits as well as costs;
2. Avoid premature bans and moratoriums that could harm private initiatives for data center energy development; and
3. Aim for permitting reform that is technology neutral.
In the near future, NTU will be publishing a series of papers that look holistically at data centers and their impact on the energy grid. While we wish we could provide them to you for this hearing, we look forward to sharing them with you and your staff when they are published as a resource to help guide your thinking on this issue. There is a great deal of nuance in this issue and we again urge you not to rush to legislate a “fix” that would harm our competitive edge and trillions of dollars in investment.
As you consider future hearings or legislation, please know NTU remains at your service.
Sincerely,
Thomas Aiello
Vice President of Federal Affairs