As data centers drive electricity demand to unprecedented heights, states are now experimenting with a new policy that can help alleviate the burden on households.  

Consumer-Regulated Electricity, or CRE, allows private companies to build their own power sources – like solar farms, gas generators or even small nuclear reactors – without connecting them to the larger grid.  

The policy is designed to address two big issues that consumers and businesses are increasingly running into. Companies are finding a utility system that’s too slow, too costly, and too regulated to deliver the power they need.  At the same time, electricity prices are increasing quickly – an added cost for everyday homeowners. 

Solving for Speed   

Public utilities got used to an era of slow and predictable growth in energy demand and now find themselves unable to keep up with the speed and scale of 21st century technology. Companies like Google and Amazon want to break ground on massive data centers now. CRE gives them a way to build their own power without waiting around for utility companies to catch up.   

The policy also exempts these power sources from a number of regulations that would typically apply. Free from the strictures of utility rules, off-grid producers can experiment with new technologies and designs. Connecting to the grid typically requires lengthy interconnection studies, regulatory approval of project design and financing, and ongoing government oversight. CRE lessens these hurdles. 

To be clear, CRE is not the “Wild West” of electricity. Companies would still be subject to environmental and permitting laws, building and fire codes, workplace safety standards, and approvals. All this does is remove onerous utilities regulations from power plants that aren’t intended to operate as utilities.  

Reduced Risk to Homeowners 

When big economic development projects get announced, utility companies tend to respond by pushing for higher rates so they have money to build new generation capacity.  

If the projects don’t materialize, ratepayers are still on the hook for all those costs. With CRE, the companies themselves bear the risk and can match the power generation project to the business.  

States Leading the Way 

New Hampshire led the way in CRE last year by passing HB 672, a one-page bill that lets private generators serve non-residential customers so long as they remain physically separate from the existing grid. The framework hinges on fewer rules, fewer delays, and faster permission to build. 

The Josiah Bartlett Center for Public Policy, an SPN affiliate, helped push the bill forward. Center president Andrew Cline argued in an op-ed that New Hampshire’s high electric rates stem from a monopoly regulatory system that shields utilities from competition. HB 672, he wrote, shows how letting new providers operate outside the system can bring faster innovation and lower costs.   

The idea is catching on. Six other states are considering CRE.  

Missouri’s Show-Me Institute, another SPN affiliate, has published multiple analyses making the case for CRE, arguing it could relieve strain on the state’s grid while attracting energy-intensive industries. The Cato Institute, a longtime SPN partner, has been building the intellectual foundation for the movement, as well, with their Director of Energy and Environmental Studies Travis Fisher publishing major papers and op-eds laying out the case for CRE. 

The American Legislative Exchange Council (ALEC) also adopted CRE as a model policy last year, language that SPN supports.  

Federal legislation modeled on the concept is advancing in Congress as well. The DATA Act, introduced by Sen. Tom Cotton, aims to extend this principle nationally. Like New Hampshire’s law, it exempts off-grid generators from federal utility regulations, clearing a path for faster, cleaner, more customer-focused energy, especially for AI and advanced industries demanding reliability and autonomy.   

While data centers may be the first to take advantage, the door is open to any industrial or commercial user with serious energy needs. Instead of waiting for utilities to catch up, CRE lets businesses lead, making energy supply responsive to demand, not bureaucracy.  

The Takeaway 

Consumer Regulated Electricity is a practical fix to real problems. It gives states a way to accommodate new industrial demand without overhauling the entire grid or relying on subsidies. 

The policy is not without objectors. Opponents have pointed out that under this framework, big tech companies can escape having to help fund improvements in energy infrastructure in areas where they operate. But relying on these companies comes with its own risks. 

Rather than forcing every project through a slow, centralized system, CRE allows new supply to come online when and where it’s needed.