What is the POWER Up Act? The POWER Up Act is a bill introduced by Senator Cynthia Lummis of Wyoming that, as reported by NBC News on June 16, 2026, would give the Federal Energy Regulatory Commission authority to approve or reject data centers' connections to certain electric grids. The POWER Up Act and federal data center grid access would mark a major shift, because FERC has historically not exerted jurisdiction over how large electricity users plug in, and putting a federal regulator in the approval seat changes the calculus for anyone developing, leasing, or investing in data center real estate. For commercial real estate investors, this is a story about which sites can actually get power, and when. For the broader landscape, see our guide to the best AI tools for commercial real estate investors.
Key Takeaways
- The POWER Up Act, from Sen. Cynthia Lummis, would give FERC authority to approve or reject data center connections to some grids, a power the agency has not historically held over large loads.
- Federal interconnection control adds a new layer of approval risk to data center development, directly affecting site selection, timelines, and land value.
- This is a federal grid-access bill, distinct from state-level rules like the Texas ERCOT land requirement and from local data center moratoriums.
- Grid access, not land, is now the binding constraint on data center supply, so any rule that gates connections reshapes where capital can build.
- CRE investors should treat confirmed power availability as a core diligence item and watch how the federal and state rules interact.
The News: Washington Moves Toward Federal Grid Control
The data center power debate has escalated from a utility-industry concern into front-line federal politics. According to NBC News reporting on June 16, 2026, Sen. Cynthia Lummis introduced the POWER Up Act to set federal rules around how data centers connect to the electric grid, giving FERC the authority to approve or reject those connections on some grids. The significance is structural: FERC regulates interstate transmission and wholesale power, but it has not traditionally asserted jurisdiction over load interconnections, the act of a large customer plugging in. Moving that decision to a federal regulator would centralize a process that today runs through utilities and regional grid operators.
The bill does not arrive in a vacuum. The Federal Energy Regulatory Commission issued an order in December 2025 creating a framework for how large co-located loads such as data centers connect to the grid, and the Department of Energy directed FERC in late 2025 to consider rulemaking for loads larger than 20 megawatts. Several competing bills are circulating, including Sen. Tom Cotton's DATA Act, which would let data centers build fully off-grid power and bypass federal rules, and the Power for the People Act from Representatives Tonko and Garamendi, which would force data centers to pay for the transmission upgrades they require. The POWER Up Act sits at the more interventionist end, putting FERC in the gatekeeping role. Full legislative text is still emerging, so the precise scope of which grids and which projects it would cover remains to be seen.
Why Grid Access Is the Real Constraint
For years the data center conversation centered on land, fiber, and construction cost. In 2026 the binding constraint is electricity. The numbers explain the urgency. The PJM grid's December 2025 capacity auction fell roughly 6,623 megawatts short of its reliability target, with data centers responsible for nearly 5,100 megawatts of the demand surge. The U.S. Energy Information Administration tracks the broader load picture, and forecasts compiled across utilities point to peak demand rising by roughly 120 gigawatts by 2029. Data centers could account for somewhere between 7 and 12 percent of total U.S. electricity demand by 2028. When demand grows that fast against a grid that takes years to expand, the power connection becomes the scarcest input in the entire development.
That scarcity is exactly why a federal approval rule matters to real estate. A data center site is only as valuable as its ability to secure firm power on a known timeline. If FERC gains the authority to approve or reject connections, a parcel that looked shovel-ready could face a new federal review, and a project that already has an interconnection path could see its advantage widen. We covered the cost side of this dynamic in our analysis of data center large load tariffs and the ratepayer backlash, and the supply-and-demand balance in our look at whether the data center boom is a bubble.
How This Differs From the State and Local Rules
It is easy to lump every data center power story together, but the jurisdictional layer matters. The POWER Up Act is a federal interconnection-approval bill. That is different from the Texas approach, where the state grid operator imposed a land and registration requirement on large loads, which we analyzed in our piece on the Texas data center grid rule and ERCOT's land requirement. It is also different from the wave of local and state moratoriums, where municipalities simply pause new data center approvals for a period. A federal FERC role would sit above both, potentially harmonizing some rules while adding a national checkpoint that did not exist before.
For an investor, the practical implication is that power risk now lives at three levels at once: federal, state, and local. A site in a permissive county could still face a state grid-operator requirement and, if the POWER Up Act or a similar measure passes, a federal interconnection review. Underwriting a data center deal in 2026 means confirming the power path at every one of those levels, not just securing the land.
What It Means for CRE Investors and Adjacent Sectors
The most direct impact lands on data center developers and the funds buying into digital infrastructure. A federal approval layer raises the value of sites with secured, firm power and existing interconnection agreements, because scarcity rewards whoever already holds the scarce input. It also lengthens timelines and adds regulatory risk to speculative sites that assumed power would follow the building. Patient capital with the ability to navigate federal process gains an edge over fast-moving developers betting on easy connections.
The ripple reaches adjacent real estate too. Industrial land near substations and transmission corridors becomes more strategically valuable. Markets with abundant generation and spare grid capacity, including parts of the Mountain West and the Midwest, may attract data center demand that coastal and constrained markets can no longer serve. And the ratepayer politics driving these bills, such as the projected 1.6 billion dollar increase in Maryland electric bills over the next decade tied to data center transmission upgrades, will keep pressure on policymakers, which means more rules are likely, not fewer. The AI Consulting Network helps CRE investors assess how AI-driven infrastructure policy affects site selection and asset value, and investors can reach out to Avi Hacker, J.D. at The AI Consulting Network to pressure-test a data center or power-adjacent thesis.
What CRE Investors Should Do Now
- Treat power as primary diligence: Confirm firm power availability and the interconnection timeline before valuing a data center site, not after.
- Map the three jurisdictions: Check federal, state grid-operator, and local rules for any large-load site, because a constraint at any level can stall a project.
- Value secured interconnection: Sites with existing connection agreements deserve a premium as approval risk rises.
- Watch the bill's progress: Track whether the POWER Up Act or a competing measure advances, since the final scope will define the new approval process.
- Look to power-rich markets: Consider regions with spare generation and grid capacity, where new demand can still be served.
The throughline is simple: in 2026, the question for data center real estate is no longer whether you can build, but whether you can get power, and the POWER Up Act would put a new federal gatekeeper in front of that question.
Frequently Asked Questions
Q: What would the POWER Up Act actually do?
A: As reported by NBC News on June 16, 2026, the POWER Up Act from Sen. Cynthia Lummis would give the Federal Energy Regulatory Commission authority to approve or reject data centers' connections to some electric grids. That would move a decision historically handled by utilities and grid operators to a federal regulator. The full legislative text and exact scope are still emerging.
Q: Why does a data center grid bill matter to commercial real estate?
A: Because a data center site is only as valuable as its ability to secure firm power on a known timeline. A federal approval layer adds risk to speculative sites and raises the value of sites with secured interconnection. It also pushes demand toward power-rich markets and increases the strategic value of land near transmission infrastructure.
Q: How is this different from the Texas data center grid rule?
A: The Texas rule came from the state grid operator and imposed land and registration requirements on large loads at the state level. The POWER Up Act is federal and would give FERC authority over interconnection approval. A federal rule would sit above state and local rules, adding a national checkpoint rather than replacing the others.
Q: Will this stop data center development?
A: It is unlikely to stop development, but it could slow it and reshape where it happens. Added federal review lengthens timelines and rewards sites with secured power, while pushing speculative demand toward markets with spare grid capacity. The net effect depends on the final scope of the bill and how it interacts with state and local rules.