Contact:
Lori Sears
lori.sears@maryland.gov
410-767-8172

PJM proposal would unlawfully saddle Maryland customers with nearly $800 million for out-of-state data center growth, OPC tells federal regulators

BALTIMORE – The regional power system operator’s plan to pay for approximately $6 billion in new transmission investments would unfairly charge hundreds of millions of dollars to Maryland customers, the Office of People’s Counsel told the Federal Energy Regulatory Commission in comments filed today.

The forecasted power demand increases driving the need for these investments are due almost exclusively to data center growth in Virginia, but PJM Interconnection LLC’s rules would disproportionately foist massive costs—nearly $800 million—for the new transmission facilities on Maryland ratepayers, OPC said.

“Once again, Maryland’s residential electric customers are being asked to pay hundreds of millions for infrastructure being built to support out-of-state data centers,” Maryland People’s Counsel David S. Lapp said. “Requiring Maryland’s residential customers to bear these massive costs is contrary to bedrock ratemaking principles that allocate costs based on who causes the costs and who benefits—and is unlawful.”

PJM’s rules for sharing the costs of “network” transmission upgrades require Maryland customers to bear substantial costs simply because Maryland areas are located close to the more than 10 gigawatts (GW) of new data center electricity demand—known as “load” growth—in Northern Virginia, OPC’s filing explains. That 10 GW of forecasted growth in data center demand is far more than the 6.7 GW of existing peak demand of Maryland’s largest utility, Baltimore Gas and Electric—peak demand built up over the last century.

In contrast to the massive growth in forecasted demand caused by data centers in Northern Virginia, the customers of Pepco and BGE—who will bear significant costs for the transmission upgrades—will experience relatively little load growth over the same period, OPC’s filing explains, citing PJM’s own load forecasts. PJM projects BGE’s peak will decline in 2030 relative to 2024, and that Pepco’s will increase by just 5 megawatts (0.005 GW).

PJM’s proposal puts huge risks on the backs of Maryland customers as well, OPC’s filing notes. If the projected load growth in Northern Virginia is never built, Maryland customers will be paying for transmission investments that turn out to be unnecessary.

“Data center load represents an unprecedented risk to ratepayers,” Lapp said.  “PJM needs to change its rules for data center load growth so that Maryland residential customers don’t have to pay for and bear big risks from massive data center growth that isn’t even occurring in Maryland.”

The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.