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What Gov. McMaster’s Ratepayer Protection Pledge Could Mean for Your Electric Bill

The voluntary commitment says data centers should pay their own power costs. Here is what it promises — and what must happen next.

James Agens,

AARP South Carolina

Published August 05, 2026

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South Carolina Gov. Henry McMaster has signed a national pledge aimed at keeping data center costs off household electric bills.

McMaster joined 22 other governors in signing the Ratepayer Protection Pledge on July 23. The initiative began in March with commitments from seven large technology companies. It has since expanded to include utilities, electric cooperatives and data center developers.

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The pledge sets a clear principle: Companies creating large new electricity demands should pay the costs they create. But signing the pledge does not automatically change South Carolina law or your utility bill. The governors agreed to implement its principles “to the greatest extent possible” within their positions.

What is the Ratepayer Protection Pledge?

A ratepayer is a customer who pays for electricity or another utility service. In this case, the pledge is designed to protect households and businesses from costs tied to new data centers.

Data centers contain computer servers and other equipment that support services such as online banking, cloud storage, streaming and artificial intelligence. Large facilities can require new power plants, transmission lines, substations and other grid upgrades.

The pledge asks companies involved in data center development to:

Build, bring or buy new power. Companies would obtain the additional electricity their facilities need and pay its full cost.
Pay for delivery upgrades. Companies would cover new transmission, distribution and other infrastructure needed to serve their facilities.
Pay even if they use less power than expected. Companies would negotiate separate rates and continue paying for power and infrastructure built for them.
Invest in local workers. Companies would support local hiring and workforce development.
Help strengthen the grid. Companies would coordinate with grid operators and, when possible, make backup generation available during shortages or emergencies.

The White House says Duke Energy, Dominion Energy and Santee Cooper are among the utilities supporting the expanded national initiative. Their participation does not mean that every South Carolina rate or data center agreement has already been changed.

What does the pledge mean for me?

The pledge does not provide an immediate rebate, rate reduction or freeze.

Instead, it is intended to prevent a future problem. When a utility builds infrastructure mainly to serve a data center, some of those costs could otherwise be included in rates paid by other customers. The pledge says the data center should pay those expenses.

If fully implemented, that approach could reduce the risk that households and small businesses subsidize large commercial projects. It would not protect customers from every possible electric rate increase. Fuel prices, storm recovery, existing infrastructure and other utility investments can also affect bills.

For investor-owned utilities in South Carolina, the Public Service Commission approves rates and regulates service. The Office of Regulatory Staff reviews utility requests and represents the public interest, but it does not make the final rate decision.

That means the governor’s signature alone cannot change an electric rate or utility contract. Protections generally must appear in state law, an approved rate structure, a utility contract or a commission order.

What would ratepayer protection look like in action?

Consider a hypothetical data center that needs enough electricity to require a new substation, transmission upgrades and added power generation.

Under the pledge, the company would pay the costs associated with those additions. It would have a separate electric rate or contract. The agreement would require payment for the capacity reserved for the facility, even if the company later uses less electricity than planned.

Strong, enforceable protections could also require:

Upfront payments or long-term minimum monthly charges.
Financial security in case the project closes.
Payment of remaining infrastructure costs if the company leaves.
Clear accounting that separates data center costs from residential costs.
Regulatory review of whether the agreement protects other customers.

One pending South Carolina proposal, H. 5215, illustrates how those protections might work. It would prohibit utilities from recovering a large customer’s incremental costs from another customer class. It also proposes commission-approved contracts, financial security and minimum payment commitments lasting at least 20 years. The bill has not become law.

The most important evidence of action will not be another announcement. It will be the rates, contracts and commission decisions that determine who pays.

Does South Carolina already have protections?

South Carolina law generally directs regulators to consider whether utility rates unfairly burden one class of customers. Each class should pay as close as practical to the cost of serving it.

The 2025 South Carolina Energy Security Act also allows certain special economic development rates. For the largest qualifying projects, regulators must determine that steps have been taken to avoid or reduce cross-subsidization and that the agreement benefits the utility system as a whole.

Those are important standards. But they are not identical to a data-center-specific rule requiring a company to pay every cost it creates. “Avoid or reduce” cost-shifting may also be interpreted differently from a complete prohibition.

What can South Carolinians expect next?

The pledge will likely add pressure for utilities, regulators and lawmakers to explain how data center costs are assigned.

Two South Carolina proposals are especially relevant:

S. 867, the Data Center Development Act, would create a broader permitting and regulatory system. It would direct the Public Service Commission to review data center rates, contracts and cost-allocation methods. The bill says operators should bear reasonable infrastructure costs and includes tools such as minimum payment obligations and financial assurances. It received a favorable Senate committee report in April but remains in the Senate.

H. 5215, the South Carolina Ratepayer Protection and Large Load Customer Infrastructure Accountability Act, would expressly prohibit shifting a large-load customer’s incremental costs to another customer class. It remains in the House after being referred to the Labor, Commerce and Industry Committee. As of Aug. 5, neither proposal has become law.

There is also a federal effort. H.R. 9340, the Ratepayer Protection Act, advanced from the U.S. House Energy and Commerce Committee by a 52-0 vote. It would require state utility regulators to consider standards addressing how large customers pay for new generation and grid upgrades. It still must pass additional legislative steps before it could become law.

What should utility customers watch?

The key questions remain straightforward:

The bottom line

Gov. McMaster’s signature is a meaningful public commitment to the principle that data centers should pay their own way.

It does not, by itself, lower your bill or guarantee that data center costs will never reach residential customers. Its value will depend on what utilities, regulators and lawmakers do next.

For AARP South Carolina, affordability remains the central concern. Residential customers should not be required to subsidize costs created by large commercial users. Clear rules, transparent agreements and enforceable protections can help turn the pledge’s promise into meaningful safeguards for South Carolina households.

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