LAREDO, Texas — Expressing sharp concerns over the surging strain that massive commercial data centers threaten to place on South Texas power grids and municipal water supplies, U.S. Rep. Henry Cuellar (D-TX) unveiled proposed federal legislation on Monday designed to shield local households, ranchers, and small business owners from subsidizing multi-billion-dollar technology developments.
Speaking to news reporters during a "Conversations with Cuellar" media briefing on August 17, 2026, the veteran Congressman declared that working families across the Rio Grande Valley, Laredo, San Antonio, and rural South Texas counties must not become the "financial backstop" for energy-hungry and water-intensive data center installations.
Cuellar revealed he is currently finalizing the draft of the "Ratepayer Bill of Rights of 2026" alongside congressional legislative counsel in Washington, with plans to formally introduce the measure when Congress reconvenes in two weeks.
"Tell the public what the project will use. Protect our water and electricity service and make the project pay its own cost. That's a simple rule, the overarching rule from my legislation. A family ratepayer should never become the financial backstop for a billion-dollar project," Cuellar said.
Cuellar stressed that the issue of commercial data center expansions has surfaced in virtually every county he has visited recently across his district, spanning Webb, Zapata, and Atascosa counties down into the Rio Grande Valley. While acknowledging the potential economic development aspects of tech investments, Cuellar maintained that growth should not come at the expense of existing residents' utility bills or vital agricultural water supplies.
"Whether you are in Laredo, San Antonio, or a rural area like Zapata, a family in one of those areas should not see a higher bill because a private project needs water or electricity," Cuellar said. "A farmer in Atascosa County should not lose dependable water. There has to be notice, there has to be protection, and a small business person should not become the financial backstop for a project that's worth billions of dollars."
Under Cuellar’s proposed framework, data centers would be mandated to pay all project-driven infrastructure and supply costs assigned to serve them before service can officially begin. Companies would also be legally required to sign binding cost-recovery agreements and post adequate financial security, ensuring local taxpayers and rate-paying residents are not left holding the bill if a facility shuts down or alters operations.
Cuellar spelled out in plain language the ten core protections embedded in his proposed legislation:
Cuellar emphasized that his federal legislation sets a foundational baseline and does not preempt or prevent state or local governments from passing stricter rules. He noted ongoing communications with state lawmakers, including Texas State Rep. Richard Peña Raymond (D-Laredo), who has called for a special legislative session to address data center regulation, as well as municipal leaders in the City of Laredo currently exploring local ordinances.
"Anything that we're doing here at the federal level does not take away from the state government or the local government to make it tougher," Cuellar said. "If they want to come up with something that's stronger than the basic 10 rights, that’s good."
The Representative reiterated that his primary objective is ensuring South Texas residents receive transparency and protection as large-scale technological infrastructure spreads across the region.
"Tell the public the truth. Protect our water and our power. Pay the cost your project creates—that is the ratepayer bill of rights," Cuellar concluded. "Our water belongs to the public conversation before the deal is signed."
