Case file 1 of 5 · Aug. 19, 2026 EDWS interim hearing

Data Centers & SB 132

The Office of Energy Development's pitch to lawmakers: Utah is a national leader on data center policy, and SB 132 protects ratepayers. Here's what the slide says, and what the bill it's describing actually does.

Presenter: Office of Energy Development
Committee: Economic Development & Workforce Services Interim
Date: August 19, 2026
Quick recap

Tap a term for a plain-language definition. Everything past this point assumes you know these. One more: OED stands for the Office of Energy Development, the state office that gave the presentation this page is about.

PSC
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Public Service Commission
Utah's utility regulator — the body that has to approve rates and contracts for a power company like Rocky Mountain Power.
Rate base
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Rate base
The pool of costs a utility is allowed to recover from everyday customers' bills. If a cost is "in the rate base," you're paying for it.
Ratepayer
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Ratepayer
Anyone who pays a regular electric bill — the person this whole bill claims to protect.
Large load customer
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Large load customer
Utah's legal term for anything needing 100+ megawatts of power — roughly enough for 80,000–100,000 homes. Most data centers qualify.
Connected generation
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Connected generation system
A large load customer's power setup that stays hooked to the utility's grid — and stays under PSC oversight.
Closed private generation
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Closed private generation system
A large load customer's own private power plant, never connected to the public grid — and exempt from PSC oversight entirely.
MIDA
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Military Installation Development Authority
A state authority that can act like a city government — approving zoning and land use — for development near military installations. Comes up because it's one of the local land-use paths a large data center project can go through.
Why this matters here

OED's whole "cost-causer pays" pitch, below, depends entirely on which of the last two terms a data center picks. A connected-generation project goes through the PSC, and the ratepayer protections apply. A closed private generation project doesn't — none of them do. Pick a path in the tool below to see the difference play out.

Two paths for powering a data center

This part is the whole story — everything later on this page is about which path a given project takes, and what OED's slide leaves out about the second one.

Try it: pick a path and see what applies
Regulated path
The PSC has to sign off — and check that ratepayers aren't footing the bill.
  • Must submit a formal service request and go through a utility evaluation
  • The Public Service Commission must find the data center — not regular customers — bears the cost
  • Subject to a separate PSC proceeding on transmission cost allocation
  • Individual revenue details still don't have to be made public, even here
Unregulated path
No PSC review. No service request required. No public utility oversight at all.
  • Doesn't have to submit a large-scale service request to any utility
  • Statute says it's "exempt from commission oversight or regulation as a public utility"
  • Financial capability is negotiated privately between the data center and its power provider — no state-set standard
  • This is the pathway OED's "cost-causer pays" slide doesn't mention
Start here

The short version

A state office called the Office of Energy Development (OED) gave a presentation to a legislative committee arguing that a 2025 law, SB 132, protects Utah electricity customers from paying for the massive amount of power data centers use. OED calls it a "cost-causer pays" policy — the idea that whoever causes a cost should pay for it, not everyone else on the bill.

The slide is accurate for part of what SB 132 does. But the bill also created a separate path — called a "closed private generation system" — where a data center can build its own power plant, never touch the regular electric grid, and in that case there's no state utility regulator watching over it at all. No rate review. No public oversight body checking its finances. Nothing in the bill requires it to disclose to the public what it's spending or how it's structured.

So "cost-causer pays" is true for data centers that plug into Rocky Mountain Power's grid. It says nothing about the data centers that build around the grid entirely.

01

What the slides say

Slide 2 — "S.B. 132: National leader in data center policy"

OED's presentation frames SB 132 around four points:

— Slide 2, "S.B. 132 – National leader in data center policy"

The rest of the deck

The remaining ten slides build the case that Utah is a good, low-cost, water-conscious place to build: Utah's electricity rates shown as "Low" nationally (13–15¢/kWh), a statewide map of operational and under-construction data centers, a rundown of cooling technologies, corporate water-use figures self-reported by Microsoft, Google, Meta and Amazon, and a pitch that data centers can act as flexible grid assets. It closes with five Utah examples: Novva (West Jordan), a Valar Atomics–Nvidia partnership, Fervo Energy geothermal, the Faraday Solar Project (which sells power to Meta's Eagle Mountain data center), and Creekstone Energy's Delta Gigasite.

What this deck does not mention

Nowhere in this presentation does OED describe the "closed private generation system" pathway in SB 132 — the option that removes a data center from utility-commission oversight entirely. The deck's ratepayer-protection framing is presented as if it covers the whole bill.

02

What SB 132 actually does

SB 132 ("Electric Utility Amendments," 2025 General Session) is a real bill, passed 22–1 in the Senate, signed March 25, 2025, effective May 7, 2025. Chief sponsor Sen. Scott D. Sandall (R–Tremonton); House sponsor Rep. Colin W. Jack. It applies to any customer with electrical demand of 100 megawatts or more.

The part that matches the slide

For a data center that stays connected to a utility's grid (a "connected generation system"), the bill really does build in ratepayer protection. Before the Public Service Commission (PSC) can approve a contract, it must find:

"...the large load customer bears all just and reasonable incremental costs attributable to receiving the requested electric service; and existing ratepayers do not bear costs justly and reasonably attributable to providing electric service for the large load customer." SB 132, enrolled copy, §54-26-302(2)(b)–(c)

The bill also excludes large-load revenue and costs from the utility's normal rate-setting process (§54-26-602(3)), and sets up a separate PSC investigation into a "large load flexible tariff" and a transmission cost-allocation proceeding. That much is a genuine, verifiable ratepayer-isolation mechanism — for data centers that use it.

The part the slide leaves out

SB 132 also creates a second, separate track: a closed private generation system — a data center's own power plant, built and operated independently, never connected to a utility's transmission system. For that track, the bill says plainly:

"A closed private generation system and a large-scale generation provider that provides service on or through a closed private generation system in accordance with this chapter... are exempt from commission oversight or regulation as a public utility under this title." SB 132, enrolled copy, §54-26-504(2)(a)

A large load customer pursuing this path "is not required to submit a large-scale service request to a qualified electric utility" at all (§54-26-301.5) — meaning none of the evaluation, cost-allocation, or PSC-approval steps that produce the "cost-causer pays" protections apply to it in the first place.

Two more provisions worth flagging:

Full statutory citations used on this page
  • §54-26-102(2) — connected-load service is exempt from standard rate regulation (§54-3-1, §54-3-2, §54-3-4)
  • §54-26-301.5 — private generation contracts skip the service-request process entirely
  • §54-26-302(2) — PSC approval standard for connected large load contracts
  • §54-26-501(2)(b) — financial capability standard is negotiated, not state-set
  • §54-26-504(2)(a) — closed private generation systems exempt from PSC oversight as public utilities
  • §54-26-602(3), (5) — large load costs excluded from rate cases; individual revenue disclosure not required
  • §54-26-701 — PSC directed to investigate a large load flexible tariff
  • §54-26-901 — separate transmission cost-allocation rulemaking
03

Where the framing and the bill diverge

OED's slide saysWhat the bill text says
"Cost-causer pays" policy True for connected-grid large loads. Not applicable to closed private generation systems, which sit outside PSC jurisdiction and pay whatever their own private contract says.
Data center infrastructure "cannot get into the rate base" Also only governs the connected-load pathway. A closed private generation system was never going to be in the rate base regardless — it's not a public utility under the bill.
Drives "behind the meter" development Accurate as a description of the bill's intent, but "behind the meter" is precisely the pathway with no PSC oversight — the slide presents this as a benefit without noting the oversight trade-off.
Open question

Whether a specific project is pursuing the connected pathway (with PSC review and ratepayer-isolation findings) or the closed private generation pathway (with none) determines whether OED's "cost-causer pays" framing applies to it at all. That's a project-by-project fact question, not something this presentation resolves either way.

Sources

Primary sources