Three States, Three Philosophies, One Problem
California’s Senate Energy Committee voted 12-4 last week to advance SB 886, a bill that would require any facility requesting 25 megawatts or more of new grid capacity to secure dispatchable zero-carbon energy for half its hourly consumption, locked in for 15 years. Financial penalties apply for early termination. A companion measure, SB 887, would create special California Public Utilities Commission tariffs to insulate ratepayers from transmission costs associated with serving large data centers.
The same week, the Illinois Commerce Commission approved ComEd’s proposal to scale up security deposits for data center interconnection and ordered a formal docketed investigation, due to open by April 23, into the broader risks that large demand customers pose to ratepayers. The numbers driving the action: ComEd’s pipeline includes more than 75 large-load projects expecting 28,000 megawatts of new demand, exceeding the utility’s 118-year all-time peak of 24,000 megawatts.
And in Nebraska, the only fully public-power state in the country, the unicameral legislature advanced LB 1010 and LB 1261 to allow private companies to build generation facilities exceeding 1,000 megawatts and connect them to the public grid. The catalyst: Google has proposed a data center requiring more electricity than the entire city of Lincoln, Nebraska’s second-largest city. The proposal does not fit within the existing public power framework, and rather than turn the project away, the legislature is rewriting a century of regulatory architecture.
Three states are moving simultaneously on data center power demand, each from a fundamentally different regulatory premise.
California: mandate. SB 886 does not mention battery storage by name. It does not need to. The bill’s requirement that large load customers secure 50 percent of hourly consumption from dispatchable zero-carbon energy, committed for 15 years, effectively mandates it. No other zero-carbon dispatchable technology deploys at scale within typical data center construction timelines. Together with SB 887’s ratepayer protections, the bills treat data centers as a category of load that must prove it will not degrade grid reliability or shift costs before it connects.
California already has the deepest battery storage pipeline in the country. SB 886 would deepen it further by converting every major data center interconnection into a storage procurement event.
Illinois: accountability. The ICC’s approach starts from a different premise. Rather than mandating a technology solution, Illinois is mandating accountability. ComEd’s new deposit structure requires upfront capital, often reaching tens of millions of dollars, to protect ratepayers if a data center goes dark, relocates, or underutilizes the infrastructure built to serve it. The formal investigation goes further: an eight-month proceeding to determine how large load customers should pay for grid infrastructure in ComEd territory.
The Union of Concerned Scientists has estimated that ratepayers are already absorbing hundreds of millions in data center interconnection costs. The ICC investigation will produce binding precedent on cost allocation in northern Illinois, with implications for every commercial customer in the service territory. If the commission concludes that data centers have been cross-subsidized by general commercial ratepayers, the resulting rate design changes would ripple across PJM.
ComEd’s all-time peak load over its 118-year history is 24,000 megawatts. The data center queue alone exceeds that. Not every project will materialize. The ICC is not waiting to find out which ones do.
Nebraska: accommodation. Nebraska’s response is the most structurally novel. For over a century, the state has operated under a fully public power system: no investor-owned utilities, no private generation at scale. LB 1261 would authorize private companies to build generation facilities exceeding 1,000 megawatts and partner with public power systems for transmission. LB 1010 addresses eminent domain protections, energy storage taxation, and disclosure requirements for data center electricity usage.
Google’s existing Nebraska operations work within the public power model. The new proposal does not, and the legislature’s response has been to rewrite the regulatory framework rather than reject the project. The debate in the unicameral has split between legislators who view private generation partnerships as a natural evolution of public power and those who argue the state should not restructure its century-old model to accommodate a single corporate customer.
Three models. These are not three versions of the same policy. They represent fundamentally different theories about where the burden of data center load growth should fall. California says the burden falls on the data center operator, who must bring clean dispatchable capacity or not connect. Illinois says the burden falls on a regulatory process that must determine fair cost allocation before more infrastructure is built. Nebraska says the burden falls on the regulatory model itself, which must evolve to accommodate demand it was never designed to serve.
Each approach carries distinct consequences for battery storage.
In California, every data center above 25 megawatts becomes a storage buyer by necessity. The market expands through mandate.
In Illinois, the ICC investigation could produce rate design changes that sharpen demand charge signals for all commercial customers, not just data centers. If regulators conclude that peak-driven infrastructure costs have been socialized, the fix is cost-causation pricing, which is precisely the rate structure that makes behind-the-meter storage economics work.
In Nebraska, the creation of a private generation framework opens a new market for co-located storage. If private developers can build large-scale generation for data centers, they can also build battery systems alongside them, particularly as ERCOT’s real-time co-optimization model demonstrates the revenue case for hybrid configurations.
What is absent. No state is telling data centers to slow down. California is not capping load. Illinois is not denying interconnection. Nebraska is not saying no. The question everywhere is how, not whether.
This is a meaningful shift from even 18 months ago, when local moratoriums and zoning battles were the primary regulatory response to large energy facilities. State-level policy has moved past resistance and into accommodation, with storage increasingly embedded in the terms of that accommodation.
The risk is fragmentation. If 50 states develop 50 different frameworks for how data centers connect, pay for infrastructure, and procure clean energy, developers face a compliance patchwork that slows deployment everywhere. If California’s mandate model, Illinois’s accountability model, and Nebraska’s accommodation model each produce workable outcomes, the question becomes which framework other states adopt and whether any federal coordination emerges to prevent the patchwork from calcifying.
FERC has shown no appetite for that coordination. Its March 19 meeting denied a complaint about PJM cost allocation methodology and approved a gas storage expansion in Texas, leaving the data center question entirely to states.
Three states moved in the same week. They moved in opposite directions. The problem they are trying to solve is the same one that pushed 18.9 gigawatts of battery storage onto the grid in 2025. The solutions will determine where the next 18.9 gigawatts land.
Sources
California’s SB 886 Could Make Storage a Prerequisite for Data Center Interconnection (pv magazine USA)
Bills Protecting Ratepayers from Data Center Costs (Senator Padilla Office)
Regulators OK ComEd’s Plan to Increase Deposit Costs for Large-Load Projects Like Data Centers (NPR Illinois)
ICC Orders Investigation into Data Center Risks in ComEd Case (Environmental Law & Policy Center)
Google Proposes Nebraska Data Center Requiring More Power Than All of Lincoln (Flatwater Free Press)
Senators Advance Bill for Energy Projects in Response to Google’s Proposal for a Nebraska Data Center (Nebraska Public Media)
Nebraska Advances Energy Storage and Data Centre-Focused Bill (Energy-Storage.News)
U.S. Energy Storage Installations Reach Record 18.9 GW in 2025 (pv magazine USA)