Maryland consumer group challenges PJM over residents footing the bill for Virginia data centers
The Maryland Office of People's Counsel has filed a complaint with the Federal Energy Regulatory Commission (FERC) against PJM Interconnection. The agency argues that Maryland residents are unfairly bearing the costs of new transmission projects largely driven by data center growth in Northern Virginia, potentially costing ratepayers $823 million over the next decade. They propose shifting these costs to the regions with high data center demand or directly to the data center companies.
The Maryland Office of People's Counsel, a consumer protection agency, has filed a formal complaint with the Federal Energy Regulatory Commission (FERC) against PJM Interconnection, the mid-Atlantic's regional grid operator. The complaint, filed on May 7, alleges that PJM's current cost allocation system for transmission projects disproportionately burdens Maryland residential ratepayers, forcing them to pay an estimated $823 million over the next decade.
People's Counsel representative David Lapp stated that these costs, approximately $345 per average customer, are primarily driven by the massive load growth from data centers, particularly in Northern Virginia. The agency argues that PJM's existing rules are an "anachronism," designed for an era of slower, steady electricity growth rather than the sudden demand spikes caused by the data center industry.
The People's Counsel proposes that transmission costs should be reallocated to the zones with the highest data center demand or directly charged to the data center companies themselves, asserting that "common sense tells you data centers should be paying for those projects." This action follows previous protests by the People's Counsel to FERC regarding approved transmission projects. FERC had directed the group to pursue the issue through a formal complaint.
PJM has received an extension from FERC and, along with its member utility organizations, has until July 27 to file responses. FERC will either resolve the matter based on written filings or proceed to an evidentiary hearing. While PJM maintains that new transmission projects are vital for grid reliability, Maryland's complaint contends that the Federal Power Act is being violated by broadly spreading costs for demand largely originating outside Maryland.