The Environmental Protection Agency said Monday that certain power plants used only to serve facilities such as data centers are not covered by federal acid rain requirements if they do not sell electricity to the grid.

In new guidance, EPA said power generators that operate as "islanded" plants are not subject to the agency’s cap-and-trade program for sulfur dioxide or its limits on nitrogen oxides. The guidance states that "under the best reading" of the Clean Air Act, "islanded" power plants like those used exclusively to power data centers aren’t subject to those standards.

EPA described the move as a way to protect utility customers from costs tied to rising electricity demand from data center construction.

"Ensuring that the United States maintains our artificial intelligence dominance is essential to national security and economic prosperity", said Aaron Szabo, EPA’s assistant administrator for air and radiation. "At the same time, it is equally important that we safeguard our communities from utility price hikes.

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