July 22, 2026: Cotton Q&A at Energy and Natural Resources Committee Hearing

[00:00:00]Um thank you. I also want to address artificial intelligence and data centers. I get a lot of conversa hear a lot of conversation from our canons about that. Um at various levels at maybe the highest level you might say they're they're very concerned about the threat that China poses. You know just in the last week or so China's released another open weighted model um and they want to make sure that we maintain our advantage over China. uh they recognize at another level the the great potential that artificial intelligence has for scientific breakthroughs, for health care and pharmaceutical breakthroughs, maybe to cure cancer or Alzheimer's um and other terrible diseases. Um at a personal level, I think a lot of them are very excited about it. Uh many of them are using it in their business, whether it's a giant business, whether it's a small mom and pop business or maybe just um using it for their day-to-day needs, whether getting it, you know, rehab for regimen for an aching knee, you know, comparing pickup trucks they're they're going to buy, developing a summer reading plan for a kid uh to have him ready to go back to school. All very positive, constructive things. On the other hand, they they are worried about what it means for their communities to have large data centers in or near them, especially what it might mean for the strain on infrastructure, most notably on electricity and what they're going to pay for their power bills, whether the uh uh power is going to be there during terrible winter storms, summer heat waves. So, um Mr. Lur, let me let me start with you.

[00:01:36]uh if a data center brings and pays for its own generation. So you've got a data center that the hyperscalers are bringing in, they're say they're going to build it and they [snorts] pay for the generation, they pay for the grid upgrades. Should ordinary families and businesses also pay for those same facilities? I would assume not. You know, Senator, there's a long-standing tenant at FK of of beneficiary pays. So the person who is reaping the benefit of the new line, the new generation should uh be borne the cost of that infrastructure upgrades and we we take that seriously. A and that means that so that the people who are building these centers and and using them for all these important purposes, they're willing to put down the money to build their generation. Um Arkansas rateayers, businesses are not going to be building those costs either.

[00:02:25]That's that's a core tenant of when the president brought the governors from PGM together to agree on on what the rules of the road are um in the rape pair protection pledge and I applaud the governors for coming together in a bipartisan manager manner with the president in doing so. Um and that has been something that's been expanded that's been something that's been agreed to by all the major hyperscalers and that these costs in which they're going to incur they are going to be assigned to and it's something that we're going to hold them to. It's a state. It's something that the states need to hold those hyperscalers accountable for on the retail level. Um, and I think it's an all of the above approach as it relates to assigning costs to the the data centers themselves, >> which those hyperscalers right now are are perfectly willing to do. They're willing to make those investments.

[00:03:06]>> Absolutely.

[00:03:07]>> Miss Sweat, I see you nodding your head.

[00:03:09]You've had conversations with them, I presume.

[00:03:11]>> Yes, sir. I have met with many hyperscalers who are at a minimum willing to pay all the costs associated with their interconnection and many of them are going beyond that and offering to subsidize the community with additional infrastructure programs or even bill subsidies.

[00:03:27]>> I think the CEO of one of them said that even if they spent a few hundred billion dollars more than was necessary in retrospect it was a worthwhile investment. Mr. Rosner, I see you nodding your head.

[00:03:37]>> I I completely agree. um we we've had them come before our commission and and testify there and and what they say is we'd like to go fast and we want to pay for it. And so my my view is let's let's let them. And to your point on investments in communities, I mean, we've got examples of them putting a battery in every home for people affected by, you know, the having the data center nearby, things like that are great. Other things that they've done to to lower regular bills, you know, I'm I'm I'm completely in favor of that. And do you is is FK postured right now from a from a policy and regulatory standpoint to ensure there's not that kind of double recovery? Do you need any other specific safeguards or reforms or or do you think you're postured well?

[00:04:17]>> Uh well well Senator um you know we've discussed the the orders to show cause that we gave to each RTO and I think those those orders make very important progress on making sure that regular consumers don't pay for infrastructure associ associated with data centers. Uh, of course, you know, if Congress wanted to add more specificity, uh, you know, I I I would defer to you and I'm happy to provide.

[00:04:38]>> Well, I just think bas based on what I hear from our canons, you know, they don't want to pay more for their power bills, uh, for these data centers, but they recognize that the data centers are a critical part of artificial intelligence, whether it's going to help us beat China or cure cancer or develop a summer reading plan for a kid to disregard and not follow. But they know that they want both of those things and it's just important for us here in Congress and at FK to make sure that we can deliver both of them. So, thank you.