VIDEO: SMECO Briefs Calvert County Commissioners on Data Center Energy Demands and Rising Electricity Costs

Southern Maryland Electric Cooperative (SMECO) officials presented a comprehensive briefing to Calvert County commissioners, detailing the substantial impact of large-scale data centers on the region's electricity demand, infrastructure, and consumer costs. The cooperative highlighted that proposed data center projects in Southern Maryland alone could require approximately 1.1 gigawatts of power, exceeding SMECO's current peak demand of about 1 gigawatt. This surge in demand contributes significantly to rising wholesale electricity prices within the PJM regional grid, which have seen capacity costs jump from $49 per megawatt-day in 2020 to over $269 for the 2025–2026 delivery year. SMECO underscored the necessity for large-load customers, particularly data centers, to fully fund the infrastructure upgrades their operations demand. Under existing Maryland law, developers are responsible for transmission, distribution, and interconnection costs. To further this, SMECO intends to establish a dedicated "large load tariff" for data centers, which would dictate billing structures and ensure that current ratepayers do not subsidize these high-demand users. This tariff is slated for submission to the Maryland Public Service Commission (PSC) by September 1. Commissioners expressed valid concerns regarding potential strain on the electricity grid and the long-term financial implications for residents, who are already experiencing sharp increases in household electricity bills. SMECO officials acknowledged these issues, noting that Maryland has retired significantly more generation capacity than it has replaced since 2018. While state incentives for new generation sources exist, infrastructure development faces considerable delays due to permitting and supply chain challenges. The cooperative reiterated that regulatory authority for rate approvals and tariff structures ultimately rests with the Maryland Public Service Commission, where SMECO will continue to advocate for fair cost allocation.