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What South Carolina’s Data Center Bill Could Mean for Utility Customers

Proposed legislation would create new rules for data center development and give state regulators a role in reviewing utility costs tied to those projects.

AARP

Published May 04, 2026

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South Carolina lawmakers are considering a bill that would create a new state framework for data centers, including where they can be built, how they are reviewed and how utility costs related to those projects are handled.

This Bill S.867, is called the Data Center Development Act. It was introduced in the South Carolina Senate on Jan. 29, 2026, and received a favorable report from the Senate Agriculture and Natural Resources Committee on April 28, 2026. The bill remains under consideration in the Senate.

Data centers are facilities that house computer systems, data storage and related technology. They support many digital services people use every day, from online banking and streaming to cloud storage and artificial intelligence tools. They can also require large amounts of electricity and water to operate.

Because of that, S. 867 has drawn attention not only for its economic development goals, but also for what it could mean for utility infrastructure, electricity demand and customer bills.

What the bill would do

S. 867 would create a new Data Center Development Office within the South Carolina Department of Environmental Services. This office would serve as a central point of contact for data center operators and would review siting permit applications.

Under the bill, data centers could not begin operations in South Carolina unless they first receive a permit from the new office. The bill would create three categories of data centers based on their electrical load:

Tier 1: 1 to 10 megawatts

Tier 2: 11 to 50 megawatts

Tier 3: More than 50 megawatts

The larger the facility, the more detailed the review would be. Tier 1 projects would receive expedited review, while Tier 3 projects would be subject to a more comprehensive review of infrastructure and environmental impacts.

The bill also includes provisions related to water use, noise, light, vibration, environmental review, brownfield redevelopment and decommissioning plans for larger facilities.

Why utility costs are part of the discussion

Data centers can use large amounts of electricity. In some cases, serving a new data center may require new or upgraded electric infrastructure, such as substations, transmission lines, distribution systems or generation resources.

S. 867 states that data centers require “extraordinary amounts of electricity” and that utility rate structures must be adapted to accommodate this type of customer while protecting existing ratepayers.

That issue is especially important for residential customers. When a utility builds new infrastructure, regulators must decide how those costs are recovered and which customers pay for them.

The Public Service Commission’s role

The bill gives the South Carolina Public Service Commission, also known as the PSC, authority over utility rates and agreements involving data centers.

Under S. 867, the PSC would review:

Rates charged by utilities to data center operators
Agreements between utilities and data centers
Infrastructure cost-recovery plans
Cost-allocation methods
Utility infrastructure investments made to serve data centers

The bill says the PSC must approve rate agreements that ensure data center operators bear reasonable infrastructure costs, so costs directly tied to serving data centers are not paid by customers who are not part of those projects.

This is a key part of the bill for utility customers. It is intended to help prevent costs caused by data center development from being shifted to residential customers and small businesses.

How the bill could affect utility rates

S. 867 includes several tools that could be used to protect utility customers from paying for data center-related costs. These include upfront infrastructure contributions, separate accounting, minimum contract obligations and financial assurances from data center operators.

The bill would also direct the PSC to evaluate cost-allocation methods in future rate cases. That means regulators would examine whether utility costs are being assigned fairly and based on which customers caused those costs.

At the same time, the details matter.

The bill uses terms such as “reasonable infrastructure costs” and “directly attributable” costs. Those terms would likely need to be interpreted by regulators. For customers, the central question is whether all costs caused by a data center — including long-term infrastructure, reliability and capacity costs — are fully paid by the data center or shared more broadly across the utility system.

If cost-allocation rules are clear and enforceable, the bill could help reduce the risk that residential customers pay for infrastructure built mainly to serve data centers. If the rules are too broad or unclear, some costs could still appear in future utility rate cases.

What customers may want to watch

As lawmakers and regulators consider this issue, utility customers may want to pay attention to several questions:

Who pays for new infrastructure? If a data center requires new electric infrastructure, will the data center pay those costs, or will some of the costs be included in general rates?

What happens if a data center closes or uses less power than expected? If a utility builds infrastructure for a data center and the project later closes, customers may want to know who is responsible for any unpaid costs.

How much information will be public? Some business information may be confidential, but customers and consumer advocates need enough information to understand whether costs are being fairly assigned.

Will residential customers be protected in future rate cases? Even if a data center agreement appears reasonable at the start, the long-term rate impact may depend on how costs are handled in later PSC proceedings.

Why this matters to people 50-plus

Many South Carolinians are concerned about the cost of electricity, especially people living on fixed or limited incomes. Even small monthly increases can affect household budgets.

AARP does not oppose economic development. New investment can benefit communities when costs and benefits are handled fairly. But utility customers should have clear information about how large new electric loads may affect the grid and future utility bills.

For people 50-plus and their families, the main issue is affordability. Residential customers should not be required to subsidize utility costs created by large new industrial or commercial users.

What happens next

S. 867 is still moving through the legislative process. If it advances, lawmakers may consider changes to the bill, and the Public Service Commission may later be responsible for reviewing utility agreements and rate structures tied to data centers.

AARP South Carolina will continue to monitor the bill and its potential impact on utility affordability, transparency and consumer protections.

For residents, this is an issue worth following. Data centers may play a growing role in South Carolina’s economy, and the way utility costs are handled could affect electric bills for years to come.