Big Tech, Grid Upgrades, and the Pre-AI Infrastructure Bill: Senate Probe, Duke Deal, and PJM Rules Highlight Cost Allocation Battles

A Democratic Senate report released October 9, 2026, titled 'Power and Profits: How the AI Data Center Boom Costs Households and Communities,' found that major data center operators including Amazon, Google, Meta, and Microsoft have committed only to covering infrastructure that exclusively benefits their facilities, opposing broader 'but-for' standards that would require payment for shared grid upgrades triggered by their demand. The nearly year-long investigation by Senators Elizabeth Warren, Chris Van Hollen, and Richard Blumenthal also highlighted companies' pursuit of tax breaks and use of nondisclosure agreements, while noting that roughly a third of U.S. transmission and half of distribution infrastructure operates near or beyond its useful life—pointing to decades of deferred maintenance predating the AI surge. Two days earlier, Duke Energy announced a settlement with Amazon, Google, Meta, Microsoft, and North Carolina's Public Staff that requires large-load customers (50 MW or more) signing agreements after June 2026 to prepay dedicated connection costs and post collateral for shared transmission upgrades, with a minimum bill tied to 75% of contracted demand; full allocation of shared costs remains subject to a future study. PJM Interconnection sought FERC approval for rules effective June 2027 requiring new large loads to secure their own capacity or face priority curtailment during shortages, but FERC accepted only the large-load definition and registry while rejecting the curtailment and 'bring your own new capacity' mechanisms. These developments underscore how AI-driven demand collides with legacy grid constraints, as seen in Constellation Energy's Three Mile Island Unit 1 restart (now Crane Clean Energy Center), where FERC granted a June 2026 waiver transferring interconnection rights to bypass transmission upgrades not due until 2030. Behind-the-meter generation is projected to supply a growing share of data center power, shifting some costs off shared infrastructure.