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State Laws Target Data Center Utility Costs

South Dakota and Oklahoma passed laws this year requiring data center operators to cover their own electrical usage and infrastructure expenses.

David Lewellen,

AARP

Published September 01, 2026

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As data centers proliferate across the country to keep pace with the computing needs of artificial intelligence, states are requiring facility operators to cover their own electrical usage and infrastructure expenses.

The goal: ensure those energy costs aren’t passed on to regular residential utility customers.

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Oklahoma and South Dakota passed such laws — backed by AARP — earlier this year. In addition to protecting consumers from the potential higher energy costs associated with the facilities, Oklahoma’s new law requires that neighbors be notified within 60 days of the purchase of land for a data center.

“We fight every day ... to keep residential utility rates low, but data centers are a bit of a new frontier,” says Joy McGill, AARP Oklahoma’s advocacy director.

Data centers require large amounts of electricity and water. Their energy needs can strain power grids and require expensive infrastructure upgrades — costs that could be passed on to all utility customers in the form of higher monthly bills.

AARP is urging state lawmakers across the country to protect consumers from data center-related rate increases.

“Older Americans are already being forced to make impossible choices between paying their utility bills and affording groceries, medications and other essentials,” notes Jenn Jones, vice president of government affairs in AARP’s national office.

AARP wants to ensure Americans 50-plus aren’t left subsidizing Big Tech’s growth, Jones says. AARP has been active on the issue in more than 20 states — advocating at legislatures, drafting bills and participating in public utility commission proceedings.

Like in Oklahoma, a new South Dakota law requires data center companies to cover their own utility costs. It also mandates that operators supply water consumption projections to area water providers so they can determine if the local water supply is sufficient to handle a project.

Earlier this year in Oklahoma, AARP surveyed 850 residents age 50 and over about the issue. It found that 86 percent of people believe data center companies should bear their own electricity and infrastructure costs.

“We’re fighting left and right, and it’s a bit like Whac-a-Mole, with data centers and [utility] rate cases,” says Sean Voskuhl, AARP Oklahoma state director. “It’s been a full-court press.”