US States and Lawmakers Limit AI Data Center Expansion

The rapid proliferation of artificial intelligence data centers is straining the U.S. electrical grid and driving up residential power costs. In July 2026, New York became the first state to implement a one-year statewide moratorium on hyperscale data center permitting to establish land and resource standards. Similar pauses have been enacted in Seattle, Broomfield, Colorado, Sarasota County, Florida, and Prince George’s County, Maryland.

Donald Trump has advocated for these facilities as essential job drivers and state revenue generators, though he has faced criticism after failing to meet a pledge to halve electricity prices. While the administration introduced the Ratepayer Protection Pledge in March 2026 to require tech firms to fund grid upgrades, Energy Information Administration data shows residential rates rose 18% between January 2025 and April 2026. Senator Tom Cotton proposed further deregulating the industry by allowing data centers to connect directly to unregulated power plants.

Grid operators and lawmakers are grappling with the surge in demand, particularly in Northern Virginia, where data centers consume 25% of the state's electricity. PJM Interconnection identified this load growth as the primary cause of record-high capacity market prices. In response, Senator Elizabeth Warren called for higher taxes on data center companies, while Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez co-introduced the AI Data Center Moratorium Act to implement environmental and community safeguards.