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CS FOR SENATE BILL NO. 250(CRA)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE SENATE COMMUNITY AND REGIONAL AFFAIRS COMMITTEE
Offered: 4/22/26
Referred: Labor & Commerce
Sponsor(s): SENATOR TOBIN
A BILL
FOR AN ACT ENTITLED
"An Act relating to data centers; and relating to utility service for data centers." 1
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 2
* Section 1. AS 42.05.381 is amended by adding a new subsection to read: 3
(r) Costs incurred by an electric utility or gas utility that would not have been 4
incurred but for the utility furnishing service to a data center may not be included in 5
any rates or charges of the utility unless the rates or charges are designed to recover 6
those costs solely from the data center. During a rate proceeding, the portion of the 7
utility's revenue requirement associated with the costs to serve the data center shall be 8
assigned to the data center. In this subsection, "data center," "electric utility," and "gas 9
utility" have the meanings given in AS 42.05.435. 10
* Sec. 2. AS 42.05 is amended by adding a new section to read: 11
Sec. 42.05.435. Contracts for data centers. (a) An electric utility or gas 12
utility that furnishes service to a data center shall enter into a contract with the 13
customer for that service. The utility shall submit the proposed contract to the 14
commission. The commission shall review the contract terms and approve the contract 15
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if the commission determines that the contract meets the requirements of this section. 1
Notwithstanding AS 42.05.371, the terms of an approved contract govern the terms 2
and conditions under which the utility offers its services and facilities to the data 3
center. 4
(b) A contract may not increase the risk of inadequate fuel supplies for any 5
public utility in the state, including utilities not party to the contract. 6
(c) The terms of a contract must include an accounting of all costs for 7
infrastructure primarily used by an electric utility or gas utility to furnish service to a 8
data center and directly assign those costs to the customer with the data center for the 9
duration of the contract. If an infrastructure component is primarily used to furnish 10
service to both the data center and other customers, the contract must specify the 11
portion of infrastructure costs to serve the data center and assign that portion to the 12
data center. If, during the contract period, an infrastructure component is no longer 13
primarily used to furnish service to the data center, the utility may submit a proposed 14
contract modification to the commission that includes evidence to support the 15
modification. The contract may provide for the utility to recover infrastructure costs 16
from the customer with a data center by the customer constructing the data center's 17
infrastructure, making contributions in aid of construction, or paying utility rates for 18
the data center with the costs included. 19
(d) Transmission infrastructure built specifically to serve a data center may 20
not initially be considered part of a backbone transmission system for the purpose of 21
allocating backbone transmission system costs under a nondiscriminatory open access 22
transmission tariff. If a review at the end of the contract term finds that the 23
transmission infrastructure is also used for other customers, the infrastructure may be 24
evaluated for consideration as part of a backbone transmission system. In this 25
subsection, "backbone transmission system" has the meaning given in AS 44.83.720. 26
(e) A contract must include a detailed analysis of all variable costs that will 27
change when an electric utility or gas utility furnishes service to a data center and 28
assign those costs directly to the data center using a separate customer-specific cost of 29
power adjustment or gas cost adjustment methodology. A contract must ensure that 30
furnishing service to a data center does not increase the cost of power adjustment or 31
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gas cost adjustment for other customers. 1
(f) A contract must include a backup power and reliability plan that prioritizes 2
renewable generation, storage, and demand response, limits fossil fuel backup 3
generation to emergencies and testing, and ensures backup operations do not increase 4
emissions or effects to other customers. A contract must specify that a data center may 5
use diesel or other fossil fuel backup power only for a limited duration, which must be 6
reported annually to the commission, and may not shift fuel or reliability risk to other 7
customers when using backup power. 8
(g) If furnishing service to a data center will require an electric utility or gas 9
utility to incur capital investment costs in excess of $1,000,000, a contract must 10
require the data center to provide financial security to the utility. In the event the data 11
center fails to perform under the contract, the utility may immediately enforce the 12
financial security to recover outstanding costs. The financial security must 13
(1) be in a form acceptable to the utility; 14
(2) remain in effect for a term specified by the utility; and 15
(3) be in an amount that is sufficient, as determined by the utility, to 16
ensure full recovery of all of the utility's costs associated with furnishing service to the 17
data center. 18
(h) If geographically dispersed buildings, equipment, structures, and other 19
stationary infrastructure are used for the same purpose and owned or operated by the 20
same person, or by any person who controls, is controlled by, or is under common 21
control with the person, the commission may determine that the infrastructure is a 22
single facility for the purposes of this section. 23
(i) A municipality shall enter into a community benefit agreement with a 24
customer with a data center within the municipality before the commission approves 25
the contract between an electric utility or gas utility and the data center and before 26
construction of the data center begins. The municipality may address any community 27
benefits related to the data center in the agreement based on the municipality's unique 28
needs, including emergency response, local hire, and any other concerns and priorities 29
of the municipality. If the customer with a data center has not entered into a 30
community benefit agreement with the municipality before construction of the data 31
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center begins, a municipality may file a civil lawsuit to obtain 1
(1) an injunction to stop construction of the data center or to prevent 2
the data center from operating; and 3
(2) any other appropriate relief. 4
(j) The community benefit agreement required under (i) of this section must 5
(1) require the customer with a data center to 6
(A) submit a waste heat recovery assessment to the 7
municipality that quantifies the potential recoverable heat when the data center 8
is fully built, identifies nearby potential users for waste heat, and describes the 9
practicability of implementing waste heat recovery, including technical 10
practicability and potential costs; and 11
(B) if the assessment determines that waste heat recovery is 12
practicable, implement the waste heat recovery in the assessment or 13
alternatively pay to the municipality an agreed-on amount that the municipality 14
shall use to fund local thermal projects; 15
(2) require the customer with a data center to submit a water usage 16
plan to the municipality that quantifies the data center's monthly water usage and 17
wastewater discharge and describes how the data center complies with all applicable 18
water quality requirements; 19
(3) address broadband interconnection costs necessary to serve the data 20
center; and 21
(4) require a digital equity contribution that must be used by the 22
customer with a data center to make digital infrastructure investments in or near the 23
municipality, with priority given to investing in infrastructure that reduces digital 24
divides in or near the municipality; digital infrastructure investments include building 25
conduit, dark fiber, and last-mile broadband in unserved or underserved areas and 26
supporting rural or low-income connectivity programs. 27
(k) A customer with a data center must file with the Department of 28
Environmental Conservation the end-of-life decommissioning and recycling plan 29
required under AS 46.03.125 before the commission may approve the contract. 30
(l) This section does not apply to a data center that consumes less than 31
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(1) 15 megawatts of peak power demand from an electric utility; and 1
(2) 1,500,000,000 standard cubic feet of gas annually from a gas 2
utility. 3
(m) In this section, 4
(1) "contract" means a contract between an electric utility or gas utility 5
and a customer with a data center for the utility to furnish service to the data center; 6
(2) "data center" means a facility used to house computer systems and 7
associated components at which the primary function is the storage, management, and 8
dissemination of data; 9
(3) "electric utility" means a public utility that furnishes electrical 10
service; 11
(4) "facility" means all buildings, equipment, structures, and other 12
stationary infrastructure that are owned or operated by the same person, or by any 13
person who controls, is controlled by, or is under common control with the person, and 14
that are 15
(A) located on a single site or on contiguous or adjacent sites, 16
including sites with multiple metering points; or 17
(B) geographically dispersed, if the commission determines the 18
sites should be considered a single facility under (g) of this section; 19
(5) "gas utility" means a public utility that furnishes natural or 20
manufactured gas by transmission or distribution; 21
(6) "municipality" has the meaning given in AS 29.71.800. 22
* Sec. 3. AS 46.03 is amended by adding a new section to article 3 to read: 23
Sec. 46.03.125. Data center end-of-life decommissioning and recycling. (a) 24
A person who constructs a data center in the state shall file with the department an 25
end-of-life decommissioning and recycling plan. The plan must specify the actions the 26
person will take to 27
(1) systematically dismantle and remove equipment and infrastructure 28
from the data center when the data center is no longer in use; 29
(2) perform secure data destruction, equipment removal, asset 30
recovery, and site restoration related to the data center; and 31
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(3) ensure regulatory compliance and environmental responsibility 1
when decommissioning the data center. 2
(b) The department may accept an end-of-life decommissioning and recycling 3
plan as filed or, if the department determines that the filed plan does not satisfy the 4
requirements of this section, may require the person to file a revised plan. 5
(c) This section does not apply to a data center that consumes less than 6
(1) 15 megawatts of peak power demand from an electric utility; and 7
(2) 1,500,000,000 standard cubic feet of gas annually from a gas 8
utility. 9
(d) In this section, "data center" has the meaning given in AS 42.05.435. 10