AI data centers would have to generate their own power: House bill demands 50% reserve and offers a 2% tax rate

A bill filed in the Puerto Rico House of Representatives would open the door to artificial intelligence data centers on the island, but with a condition few would expect: they must bring their own power and have some left over for everyone else. House Bill 1523 would require every facility above 5 megawatts (MW) to have its own firm capacity and to make available to the grid a reserve equal to half its load, at a time when the system is already stretched past its limits ¹².

Background: a grid with no cushion

The measure, titled the "Puerto Rico Computing and Artificial Intelligence Infrastructure Development Act," runs 47 pages and was filed the week before November 2 by three New Progressive Party legislators: Jerry Zahamir Nieves Rosario, Luis J. Jiménez Torres and Jorge Navarro Suárez. It was referred to the House Government Committee and has not advanced beyond that step so far ²³.

The backdrop is the power system. According to the bill's statement of motives, peak summer demand was about 3,234 MW against roughly 3,200 MW available. The structural shortfall is estimated at 700 to 850 MW, and there were fifteen manual load sheds in July and August ¹. In addition, inspections before the Energy Bureau found deterioration in the TM2500 temporary generators, which the government bought for $300 million, with some described as "not operational" ¹.

The numbers and the rules

• Threshold: it would apply to data centers above 5 MW that request new or expanded electric service ¹.
• Self-sufficiency: each facility would have to sustain its entire operation with its own firm capacity during emergencies, reserve alerts or outages, without relying on the local system's generation ¹².
• "Megawatt Commitment": anyone seeking incentives would have to produce or contract power to keep a reserve of at least 50% of operating load available to the system ¹.
• The bill's math: ten 50 MW centers could contribute up to 250 MW of reserve, about one third of the reported shortfall ¹.
• Incentives: for existing centers that expand capacity and export digital services, a 2% tax rate on expansion income for ten years, plus exemptions from sales and use tax and excise taxes on technology equipment, cooling and energy infrastructure ¹.
• Energy Bureau: it would have to regulate so that interconnection, transmission and upgrade costs do not fall on other customers, and set up competitive processes to allocate capacity ¹.
• "Sovereign Computing Bank": incentivized centers would set aside at least 5% of their processing for the University of Puerto Rico, agencies, municipalities, researchers and local startups ¹.
• Other components: Qualified Computing Center status, designated computing and energy zones, and water efficiency and management requirements, although the reported text does not specify volumes or limits ².

The criticism

The proposal has already drawn resistance. Former senator and attorney Ramón Luis Nieves, who is not an author of the bill, said "this is not the time to talk about data centers" and asked the House to withdraw the measure or put it on hold ¹. Activist Gabo Ramos warned about the heavy water and electricity use of these facilities on an island short on both, and demanded that any step rest on real data and studies, which he says the bill lacks ³. Ramos named Ponce, Guayanilla and Lajas as areas that could interest companies; no site has been set ³.

What it means for you

Nothing changes on your bill or your service today: this is a bill in committee with no vote scheduled. But the debate touches your wallet directly. If a data center draws hundreds of megawatts, someone pays for the interconnection and transmission upgrades. The bill says that cost should not land on other customers and tasks the Energy Bureau with ensuring it ¹. The reasonable question is whether that protection would work in practice on a system where the reserve is already minimal. Water is also at stake, and it has been the scarcest resource in several towns this year ³.

How to / Checklist

1. Read the full text of H.B. 1523 on the House legislative tracking system (camara.pr.gov, or the Microjuris portal that links the bill) and mark the sections on energy, water and incentives ².
2. Find your district representative at camara.pr.gov and write or call with your position before the Government Committee schedules hearings.
3. Ask the Government Committee in writing to notify you when public hearings are announced, and request a turn to testify or submit a written memorial.
4. If you are worried about rate impacts, file comments with the Energy Bureau (energia.pr.gov), which would be in charge of regulating how interconnection costs are shared ¹.
5. Compare the bill with the real state of the grid: review the inspection reports on the temporary generators and the 700 to 850 MW shortfall before forming an opinion ¹.

What's next

The House Government Committee is the next stop. If its chair calls public hearings, that is where support will be measured for a law that pairs tax incentives with demands for energy self-sufficiency ²³. Critics want a pause and impact studies on water and electricity; the authors argue the industry should add megawatts to the system rather than compete with homes and businesses for scarce power ¹². It remains to be seen whether the bill survives the debate and what the Energy Bureau, LUMA and Genera will say about its technical feasibility.

Sources

1. Metro Puerto Rico - https://www.metro.pr/negocios/2026/11/05/proyecto-busca-atraer-inteligencia-artificial-sin-sobrecargar-la-red-electrica
2. Microjuris al Día - https://aldia.microjuris.com/2026/11/02/proyecto-de-ley-busca-atraer-centros-de-datos-de-ia-a-puerto-rico/
3. Radio Isla - https://radioisla.tv/proyecto-para-atraer-centros-de-datos-de-inteligencia-artificial-genera-criticas-por-su-consumo-de-recursos/