New DATA Act Exempts 'Consumer-Regulated' Utilities from Federal Oversight, Raising Reliability Questions

Alright, let's talk about the DATA Act of 2026. This bill is looking to shake up how we get our electricity by creating a whole new type of power company: the Consumer-Regulated Electric Utility, or CREU. Think of it like this: if you're building a new neighborhood or a big industrial park that needs its own dedicated power source, this bill says you can set up your own mini-grid, completely cut off from the big, interconnected power system we all rely on. The catch? Because it's isolated, it gets a pass on nearly all federal regulations, including those pesky reliability standards. This could be a game-changer for new developments, but it also raises some eyebrows about who's watching the store when it comes to keeping the lights on.

Going Off-Grid, Federally Speaking

The core idea behind the DATA Act is to allow these new CREUs to operate without the usual federal strings attached. Under Section 3, a CREU won't be considered a 'public utility' under the Federal Power Act, meaning it bypasses federal rate regulation, corporate oversight, and even rules about merging or acquiring other companies. It's also specifically exempt from reliability standards set by the Electric Reliability Organization (ERO). This is a pretty big deal because those standards are literally designed to prevent widespread blackouts and ensure the grid stays stable. The bill, in Section 4, doubles down on this by exempting CREUs from all Federal Energy Regulatory Commission (FERC) and Department of Energy (DOE) regulations, including all reliability standards, as long as they stay physically isolated from the main bulk-power system. For a small business owner looking to power a new facility or a developer building a new community, this could mean faster setup and potentially lower costs without all the regulatory hurdles. However, it also means that if something goes wrong, there's no federal agency directly overseeing the fix.

The 'Catch' of Connection

Now, there’s a big asterisk on this whole exemption thing. The bill makes it crystal clear: if a CREU ever decides to connect to the main bulk-power system for primary or even backup power, the party's over. According to Section 4, that exemption immediately vanishes, and the CREU suddenly becomes subject to all the federal regulations it was previously sidestepping. This is a critical point because it aims to keep the main grid safe from potential instability caused by unregulated, isolated systems. But it also means these CREUs are truly on their own. If your local CREU experiences a major outage, there's no backup from the larger grid, which could leave customers in the dark with no immediate federal safety net.

Paving the Way for New Infrastructure

Beyond just the regulatory exemptions, the DATA Act also tackles the nitty-gritty of getting these new power systems built. Section 7 allows CREUs to build and operate their facilities within existing public rights-of-way, like alongside roads, just like traditional public utilities. The catch here is that when a city or county reviews their application, they can only look at two things: how well the CREU plans to restore the right-of-way after construction and their storm-response planning. While it's good that they have to think about cleaning up and planning for bad weather, this limited review means other concerns, like potential long-term environmental impacts or even how the infrastructure might affect local traffic, might not get the same scrutiny. For someone managing a town's infrastructure, this narrow scope could be a headache, potentially forcing them to approve projects without a full picture of their community impact.