In an effort to quell blowback on data centers, President Donald Trump announced at a White House roundtable on Wednesday the “Ratepayer Protection Pledge,” a set of nonbinding promises that Big Tech companies signed to keep household utility bills from skyrocketing.
“They need some P.R. help,” Trump said of the data centers, “because people think that if a data center goes in, their electricity prices are going to go up, and that’s not happening. It’s not going to happen.”
The announcement comes after Trump’s State of the Union promise last week that tech firms would “provide for their own power needs” by building on-site power generators or securing their own dedicated supply.
For years, Big Tech mostly powered data centers by plugging into the electric grid, but the recent boom in data-center demand is now adding to utility costs for regular customers. And their concerns have become a hot issue for the upcoming midterm elections in November.
The pledge was signed by top officials from Google, Meta, Microsoft, OpenAI, Amazon Web Services, Oracle and Elon Musk’s xAI. While Trump has previously described it as “mandatory,” the pledge is voluntary, unlike a statute or enforceable federal regulation.
Concerns over rising electricity bills will ultimately need to be addressed by the utilities and state commissioners, said Ari Peskoe, director of the Electricity Law Initiative at Harvard University.
“The president talked a lot about building their own facility, but in general, those still have to have some deal with utilities about getting power from the grid, and connecting to the transmission service, being able to exchange energy back and forth, particularly when the data center’s power source isn’t working,” said Peskoe.
The Edison Electric Institute, an association for the country’s major utilities, lauded the announcement, but Peskoe said that’s to be expected because the industry wants to placate Trump. Utilities don’t like data centers generating their own power, Peskoe added, because then grid upgrades that would otherwise make the utilities money can’t be recovered from ratepayers.
At the same time, he said, the utilities that are upgrading to accommodate data-center growth aren’t assigning the full cost to those companies, wanting to attract them and profit from the boom.
Backup power is another concern. Data centers typically rely on on-site generators for emergencies and testing, which are commonly powered by diesel engines. Critics say widespread deployment of those generators can add localized noise and air pollution and raise permitting and oversight questions, even if they are intended to run only during emergencies.
Large data centers can also strain water supplies and affect water quality as they use millions of gallons for cooling. The pledge does not address any specific safeguards or reporting requirements for air and water quality.
“There’s no way to hold big tech companies accountable,” said Amanda Garcia, a senior attorney with the Southern Environmental Law Center. “Even if it were written into the pledge, it wouldn’t be practicable because the decisions that govern the siting and the power generation and the cost allocation and all these different pieces are made by hundreds of state and local decision makers across the country. There isn’t a one-size-fits-all, wave-the-magic-wand and all of that goes away.”
For decades the gargantuan data facilities have been approved by localities flush with local tax revenues and temporary construction jobs. But communities are pushing back. Residents in Pittsylvania County, in rural and red Southside Virginia, opposed a data center proposal, withdrawn in April, that would have had its own gas plant. In South Memphis, Tennessee, residents protesting an xAI complex say it has operated gas turbines without permits while polluting the community.