Lawmaker seeks to protect Pennsylvanians from data center-fueled rate hikes

(WHTM) — As much as there’s a demand for data centers, so too is there for energy.

President Donald Trump pledged “energy dominance” as he touted touted tens of billions of dollars of recent energy and technology investments earlier this month in the state. Pennsylvania will need a lot of it to power several data centers planned there.

An estimate from the International Energy Agency projected electricity demand from data centers worldwide will double by 2030 to more than the entire electricity consumption of Japan today.

Pennsylvania lawmakers have expressed worry that excess strain on the grid could pass higher energy costs onto consumers. Now one has a plan.

Sen. Katie Muth (D-Berks/Chester/Montgomery) said she will introduce the Pennsylvania Ratepayer Protection Act, which would establish a separate rate class for high-load data centers and require them to cover utility infrastructure costs.

“Without reform, the cost of utility infrastructure built to serve massive data center facilities will fall on everyday Pennsylvanians, even though they receive little to no benefit from these projects,” Muth said in a co-sponsorship memo for the proposed bill.

The legislation is modeled after Oregon’s bipartisan POWER Act that passed last month. Like that legislation, Muth’s bill would create a “high-load customer class” that applies to new or expanding data centers with a peak demand of 20 megawatts or more.

Muth also proposed requiring all data center facilities, including ones built next to an existing power plant and share interconnection with the grid, to sign cost-responsibility contracts for at least 10 years to cover expansions to the grid.

If passed, the Pennsylvania Public Utility Commission would enforce the legislation by setting cost-allocation rules, monitoring compliance and protecting non-industrial customers from rate increases. Data centers would also need to report annual electricity and water usage.

Data centers require significant energy to power computers, servers, network equipment and complex cooling systems. Power is the largest operating cost for data centers, ranging between 40% and 80% of annual expenditures, the U.S. Chamber of Commerce said.

At least three companies have promised to build data centers in central Pennsylvania. York County will see a $5 billion data center and an AI company said it plans to invest $6 billion in Lancaster County. Microsoft also announced a 20-year agreement to restart a nuclear reactor on Dauphin County’s Three Mile Island to power its data centers.

Just this week, Cleveland-Cliffs said it could sell the idle Steelton mill because the site has “what data center developers are looking for,” such as access to power and water.

“With major data center projects proposed along PJM transmission lines, we must act before these projects are approved and costs are passed on to ordinary ratepayers through future rate increases,” Muth said in the memo.


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