Propane Opportunities from the “Ratepayer Protection Pledge”

Last week President Donald Trump issued a proclamation entitled the “Ratepayer Protection Pledge.” This pledge calls on United States hyperscalers and AI companies to bring, build, or buy all of the energy needed for building and operating data centers by paying the full cost of their energy and infrastructure – whether it is utilized or not. In a monumental shift in U.S. utility regulatory policy, the “Ratepayer Protection Pledge” attempts to ensure that as infrastructure growth and electricity demand increase due to data center development, the cost will not be passed on to American ratepayers.

The “Ratepayer Protection Pledge” contains several commitments:

• Companies will build, bring, or buy the new generation resources and electricity needed to satisfy their new energy demands, paying the full cost of those resources
• Companies will pay for all new power delivery infrastructure upgrades required to service their data centers
• Companies will voluntarily negotiate new, separate rate structures with their utilities and relevant State governments. Companies will pay these rates for the power and related infrastructure whether they use the electricity or not
• Companies will coordinate with grid operators to ensure grid reliability, and will make their backup generation resources available at times of scarcity to prevent backup and power shortages in communities

As of March 4^th, seven companies have committed to the pledge, including: Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI. This pledge presents significant and immediate opportunities for the propane industry. Hyperscale developers that have committed to develop their own generation and requisite infrastructure will likely look to more economical solutions such as co-located thermal power via microgrids, particularly for bridge applications. Propane co-located power offers an immediate, low-emission solution that prevents the need for extensive transmission investments, and allows for development opportunities outside of traditional electric and natural gas infrastructure.

Additionally, companies that commit to offering up their backup generation sources to prevent power shortages will face increased pressure to have reliable, lower-emission backup sources. Given that diesel storage must be cycled through every 6-9 months due to the degradative nature of diesel, propane’s indefinite shelf life will be attractive to developers looking to maintain adequate supply to ensure backup continuity not only for their own operations, but for community support obligations as well.

For more information on the Ratepayer Protection Pledge or its implications for the propane industry, please contact NPGA’s Senior Manager of State Government Affairs, Austin Wicker.