The House Passes Bill to Shield Consumers From Data Center Costs. These Nuclear Stocks Should Win
On Sept. 16, the U.S. House of Representatives voted 417 to 3 to pass the Ratepayer Protection Act. Importantly, the bill still needs to pass the Senate and be signed into law by the President.
Given the bill’s bipartisan nature and its strong passage in the House, there is a good chance the Ratepayer Protection Act will eventually become law in some form. That could affect several industries, especially certain nuclear stocks.
Before we look at which stocks will benefit, it’s important to understand exactly what the bill aims to do.
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Here’s what the Ratepayer Protection Act accomplishes
Data center construction is progressing rapidly as AI companies seek to expand compute capacity as quickly as possible. The current electric grid, however, wasn’t designed to handle such a surge in demand.
In response, electricity rates have risen in many areas where data center construction is occurring. Many residents are displeased. The Ratepayer Protection Act aims to resolve this issue by forcing large data center operators to pay higher rates for their consumption rather than spreading the costs across the entire ratepayer base.
“The bill would establish a regulatory framework that states could choose to adopt,” CNBC reports. “They would aim to require AI data centers with a demand of 100 megawatts or more to cover the costs of building new power sources, transmission lines, and other infrastructure, rather than passing those costs down to consumers.”
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These nuclear stocks should benefit
If the Ratepayer Protection Act becomes law, the nuclear industry will likely receive a boost. AI companies are already investing in nuclear energy to ensure their data centers have enough long-term power generation to scale.
In particular, many AI firms have expressed interest in small modular reactors, or SMRs. These miniature power plants can be built faster than conventional nuclear power plants — an advantage for AI companies looking to add new energy sources as quickly as possible.
While SMRs are typically most expensive on a per-megawatt basis versus traditional nuclear facilities, they usually have lower upfront costs, allowing AI companies to spend that money on other growth initiatives.
NuScale Power (SMR -7.25%) and Oklo Inc. (OKLO -4.04%) are two of the more popular SMR stocks. When it comes to benefiting from the Ratepayer Protection Act, however, Oklo likely has a slight edge. That’s because Oklo sells directly to AI companies, whereas NuScale largely targets utilities. If AI companies look to go behind the meter, the direct sales approach of Oklo would gain the most.
Other nuclear-related stocks could also benefit. Vistra Corp. (VST -1.49%), for example, operates a diversified energy generation portfolio, including around 6.5 gigawatts of nuclear. GE Vernova Inc. (GEV +1.86%), meanwhile, is building next-gen SMRs. And while Bloom Energy Corp (BE -4.89%) isn’t focused on nuclear, it designs modular, miniature power plants — usually run on natural gas, biogas, or hydrogen — that can be deployed directly near data center infrastructure.
Despite their different approaches, all of these companies should benefit if data centers are required to pay for more of their power usage — conditions that would encourage them to seek additional, independent ways of generating electricity.
