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The new collaboration between state-level lawmakers will look at solving long-term energy-cost problems.
ANNAPOLIS, Md. — A booming build-out of massive data centers in the region is driving a major energy crunch and causing utility bills to soar for millions of residents.
Maryland State Senator Katie Fry Hester has launched a multi-state collaborative of lawmakers to confront the regional grid operator, PJM Interconnection, and challenge how the costs are being allocated.
“(This is about a process) that ultimately will decide who will pay for the 32 gigawatts of new data center load,” Hester said. “Which is over $100 billion decision.”
The Problem: $100 Billion Question
The PJM region faces a projected 32 gigawatts (GW) of new data center load by 2028, a surge in demand equivalent to adding a major city’s energy needs annually.
Lawmakers are focusing on a process at PJM — the Critical Issue Fast Path (CIFP) — that will effectively decide who pays for the more than $100 billion in grid costs tied to this new load. They worry that ordinary ratepayers will unfairly foot the bill.
Ratepayer Impact: The Natural Resources Defense Council (NRDC) projects that without changes, the average family in the PJM region could pay an extra $70 a month on their electricity bills by 2028.
PJM’s Pushback
PJM, through a spokesperson, responded to the collaborative with skepticism, stating, “This Collaborative’s thesis, as described in today’s press release, is not sound.”
PJM argues that the criticism is a “distraction that is not based in fact or an understanding of the fundamentals of utility regulation.”
The operator maintains that they initiated the conversation related to data center additions, citing a letter from the Board Chair.
A spokesperson also d has said determining how different customer classes (like residential vs. large commercial/data centers) are billed — is “in the hands of the states themselves through their retail rate making regimes” and not PJM’s responsibility.
PJM concludes that “continued politicization… will not solve the overall supply problem” and affirms that it will continue working with stakeholders, including states, to meet the challenge of accelerating demand.
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