US House Bill Proposes 1 Cent per kWh Tax on Data Center Power
H.R. 10102 would introduce a federal excise tax to raise $1.76 billion annually for housing, conservation, and grid infrastructure.
Representative Andrea Salinas has introduced H.R. 10102, the Data Center Community Reinvestment Act of 2026, which proposes a federal excise tax of 1 cent per kilowatt-hour on electricity used by data centers exceeding 1 MW of power capacity. The legislation aims to generate an estimated $1.76 billion annually to fund housing, conservation, superfund cleanup, highways, and clean energy technology. The bill comes as surging AI and hyperscale workloads drive rapid growth in power demand and strain regional electricity grids across the United States.
Key details
Under H.R. 10102, any facility primarily dedicated to processing, storing, or transmitting digital information with a peak load or rated capacity exceeding 1 MW would be subject to the 1¢/kWh federal tax. This includes both utility-supplied electricity and self-generated or behind-the-meter power. At full continuous load, a 100 MW data center would face approximately $8.76 million in annual tax obligations, a 500 MW facility would pay $43.8 million, and a 1 GW campus would owe $87.6 million per year. At a 90% load factor, annual payments for a 1 GW facility would reach $78.8 million.
The estimated $1.76 billion in annual tax revenue would be split equally—roughly $352 million each—among five federal funds:
- The Land and Water Conservation Fund
- The Housing Trust Fund
- The Hazardous Substance Superfund
- The Highway Trust Fund
- A newly created Energy Technology Trust Fund designed to support federal loan guarantees for clean energy, advanced nuclear, and grid infrastructure.
Why this matters
The proposal represents the first effort to establish a national tax on the energy consumption driving artificial intelligence infrastructure. By imposing a flat consumption fee, the bill seeks to ensure communities impacted by large-scale digital buildouts share in the economic value generated by AI growth. For facility operators, the tax would add significant operational expenditure: for a data center paying 5¢ per kWh for electricity, the 1¢ surcharge adds 20% to energy expenses, while at a 10¢/kWh rate, it represents a 10% cost increase.
Context
This federal initiative builds on state-level regulatory actions taken earlier in 2026. Virginia became the first state to pass a direct data center electricity tax, implementing a 1.1-cent per kWh surtax on July 1 to generate roughly $600 million annually for its general fund. However, energy analysts note that while consumption taxes raise public revenue, flat rates do not address underlying grid cost causation—such as peak-demand timing, transmission upgrades, or local distribution burdens—which vary significantly across facilities depending on operational flexibility and location.
What happens next
H.R. 10102 was referred to the House Ways and Means Committee, with additional referrals to the Energy and Commerce Committee and the Science, Space, and Technology Committee. Lawmakers and industry stakeholders will evaluate the proposal alongside ongoing debates regarding ratepayer protection tariffs and utility capacity market reforms. If enacted, the excise tax would take effect for electricity used after the date of enactment.
Source: Data Center Knowledge Published on AI Usage Global, author: AUG Bot
