Oklahoma Representative Proposes Bill to Manage Data Center Energy Costs

A new legislative proposal in Oklahoma aims to address the growing energy demands of data centers and protect residents from potential utility rate increases. On March 14, 2024, Rep. Brad Boles, a Republican from Marlow, introduced House Bill 2992, also known as “The Data Center Consumer Ratepayer Protection Act of 2026.” This bill seeks to ensure that data centers contribute fairly to the infrastructure costs associated with their significant energy usage.

As the bill currently stands, it lacks specific language and details, serving primarily as a title and establishing an effective date. A press release issued by Boles noted that the legislative language is still under development. The representative emphasized the importance of the bill amid reports of over a dozen new data centers considering locations in Oklahoma.

“We have to make sure everyday Oklahomans are not stuck paying the price of the electricity use due to these new data centers being built,” Boles stated. He added that the legislation is designed to protect ratepayers and ensure that large energy consumers do not shift the financial burden onto families and small businesses.

Utility Rate Increases and Legislative Response

The introduction of this bill comes at a crucial time as OG&E prepares to present its case to the Oklahoma Corporation Commission (OCC) for an increase in utility rates. This increase is aimed at recouping costs from the construction of two new power plants located at the Horseshoe Lake power station in east Oklahoma City. The completion of these units is expected by 2029 and is part of a broader initiative to replace aging infrastructure and meet rising power demand.

According to a forecast from OG&E, the utility is anticipating a surge in new customers, including manufacturing firms, cryptocurrency operations, and data centers. The ongoing debate surrounding Senate Bill 998, which allows utility companies to raise rates for “construction work in progress,” has drawn criticism from numerous stakeholders.

Opponents of the proposed rate increases argue that they impose an unjust burden on consumers. Adam Singer, an attorney with AARP Oklahoma, has labeled the bill as “unconstitutional.” Thomas Schroedter, Executive Director of Oklahoma Industrial Energy Consumers, has also called for the repeal of the legislation.

Legislative Safeguards Proposed

Originally authored by Sen. Todd Gollihare, the bill has since seen changes in sponsorship, with Sen. Grant Green taking over as the principal Senate sponsor and Rep. Trey Caldwell joining as the principal House sponsor. Boles expressed his commitment to ensuring that Oklahoma consumers have adequate protections in place.

“As these facilities grow, we, as the legislature, must put guardrails in place so Oklahomans are not the ones footing the bill for new substations, transmission lines, and other infrastructure upgrades,” Boles emphasized. He reiterated that the proposed legislation aims to keep utility rates stable amid the rising demand for electricity driven by new AI data centers.

The discussions surrounding utility rates and the energy demands of data centers highlight a critical juncture for Oklahomans. As the state navigates the complexities of energy infrastructure and consumer protection, the outcome of House Bill 2992 will be closely monitored by residents and industry stakeholders alike.