The Overnight RateThe visible effect of a data center is the building. The one to foresee lands on the power bill, and on Wednesday the House voted 417 to 3 on whose.
- Freddie Mac’s 30-year averaged 6.95% this week, from 6.76 (Freddie Mac). That’s the biggest one-week jump since April 2025, and the highest print since January 2025 (PMMS history). In late February it was 5.98. On a $300,000 loan, principal and interest at 6.95 runs about $1,986 a month. At February’s rate it was about $1,795: roughly $2,300 a year more for the same house.
- Receipt on Thursday’s threshold. We called a 6.8-something a normal Thursday and a 7 handle the end of the market. It printed 6.95, which we didn’t cover, and the market on a 7.00 print this year went from 72% to 84% (Polymarket). The survey averages offers from the prior Thursday through Wednesday (Freddie Mac), so it closed on Fed day. Mortgage News Daily’s daily index eased to 7.19% on Thursday, from 7.24 (Mortgage News Daily).
- Polymarket and the Treasury market read Thursday differently. An October hike went from 46% in Thursday’s issue to 53% this morning (Polymarket). The 2-year Treasury yield, which climbs when traders price in more hikes, fell to 4.67% on Thursday from 4.74 (Treasury). I’d give the 2-year more weight. Far more money trades there.
What things cost this morning
Regular gas is $4.47 and diesel $6.45 as of this morning, and AAA’s record table now shows today’s diesel as its new high (AAA). Diesel is up 39 cents in a week and 74% in a year. Prime is 7.00% (Bank of America), so cards and home equity lines carry Wednesday’s quarter point from the next statement on. The mortgage line is above.
Who pays: the substation
The House passed the Ratepayer Protection Act on Wednesday, 417 to 3 (House roll call 312). It asks state regulators to consider rules for any load over 100 megawatts, which in practice means data centers. The load would pay the “full, incremental” cost of the generation, transmission and distribution built to serve it, post financial assurance before the work starts, and cover the cost if it walks away early (Utility Dive). States get a year to start and two to decide.
The mechanism, once: the utility builds the substation and the lines, recovers the cost through rates with an allowed return, and the state regulator decides which customers’ rates. Thirteen states have no large-load tariff at all, and ClearView Energy Partners told clients the bill is unlikely to clear the Senate before November (Utility Dive).
The meter has leaned one way for a while. Since 2019, residential rates rose 33% against 27% for industrial, per Lawrence Berkeley National Laboratory (Utility Dive). In June, residential power ran 18.34 cents a kilowatt hour, up 5.0% in a year. Industrial was up 3.0% (EIA). A 417 to 3 vote is what it looks like when nobody in the building wants a data center line on a residential bill.
Net net: the bill makes every state decide, within two years, whose rates carry the substation. Thirteen haven’t started.
Headlines
- Microsoft puts Xbox cloud gaming on a meter in November: 15 hours a month on Game Pass Ultimate, 10 on Premium, 5 on Essential, with extra hours sold separately. Its stated reason is that “the cost of providing cloud gaming grows as more people use it and play for longer,” and it expects 4% of subscribers to hit the cap (Xbox Wire). Compute gets a meter wherever it runs, chatbot or console.
- PJM’s July capacity auction came up 6,831 megawatts short for 2028-29, per the Pennsylvania PUC, which is now rewriting the order in which customers get curtailed in an emergency. The draft goes to the commission Oct. 1 (Utility Dive). Deciding who goes dark first is the other way to price a shortage.
Seven is five basis points away, and the next survey closes Wednesday.