No Rate Hikes for Residential Customers from Data Center Costs: Strengthen SB730

I’m writing to request improvements to SB 730, specifically the new proposed statute § 62-142.1 (“Contracts with data centers”). I support the goal of ensuring data centers do not create hidden subsidies paid by residential customers. However, the current language may not be sufficient to prevent utilities from passing through construction, infrastructure, and related costs to residential ratepayers through overly broad or flexible interpretations of “incremental costs,” and through later recovery mechanisms that are not clearly constrained in the statute. As drafted, the requirement that contracts include terms to protect residential and other retail customers from “costs incurred or reasonably anticipated” to serve a data center, and the requirement to recover “incremental costs,” could still allow utilities to treat many system-wide or general capital expenditures as “incremental” unless the bill defines the term with precision. I ask you to add statutory language that defines “incremental costs” as only those directly attributable to the data center’s load and the specifically required, causation-based facilities or interconnection needs. The definition should exclude costs that can be passed along to residential ratepayers through rates, riders, or other utility cost-recovery pathways, unless the bill’s protections are satisfied and documented under a strict attribution standard. I also request two additional enforcement provisions. First, the bill should require a true-up and reconciliation process that compares forecast incremental costs to actual incremental costs, and compares contract payments and credits to the final attributable cost amounts. Second, the bill should prohibit double recovery, making clear that the same dollar of cost cannot be collected both from the data center contract payments and again through residential/other retail rates, unless any excess is fully credited back to retail customers. Finally, please require that the data center contract include a transparent, itemized, auditable cost-allocation schedule filed with the Commission. This schedule should identify cost categories, attribution methodology, accounting treatment, and how changes and revisions will be handled. The bill should also require utility filings to show the residential rate impact attributable to data-center-related spend and to demonstrate—numerically and with documentation—that residential customers are not paying an added subsidy for costs that should be borne by the data center. Thank you for your attention and for considering amendments that strengthen these protections. I would appreciate confirmation of your support for these changes.