Data Center Q&A: How will the facilities really impact power bills?

Last month, a "Spotlight On: Data Centers" event at Wilmington University in Dover, Delaware, brought together local and regional experts to discuss the multifaceted impacts of data centers on local economic development, energy infrastructure, and environmental sustainability. A key panel, moderated by land-use reporter Olivia Marble, specifically addressed the electricity infrastructure needs of these facilities and their effects on power supply, demand, and ultimately, consumer power bills. Panelists included Delaware Public Advocate Jameson Tweedie, former Virginia Energy Director Glenn Davis (now leading Davis Energy & Infrastructure Strategy Group), and Jeffrey Sturla, Vice President of Critical Facilities at Wohlsen Construction. Tweedie detailed research suggesting significant potential increases in locational marginal prices (energy costs) across Delaware due to data center development. He indicated that a 1.2 gigawatt scale could lead to a 9% increase, while a 2.4 gigawatt scale, which utility Delmarva is reportedly studying, might result in an 82% increase above baseline energy costs for the state. He also discussed how transmission costs are socialized regionally but concentrated locally, and how Delmarva proposes data centers bear distribution infrastructure costs to prevent them from being passed to other Delawareans. The discussion also delved into the environmental concerns surrounding data centers, particularly the use and emissions of backup generators. While historically generators run infrequently, panelists explored scenarios where increased grid strain or policy mandates (like those from the Department of Energy) could require them to run more often, leading to local air pollution, especially with less efficient models. Sturla, referencing a past project in Lancaster City, emphasized the use of community benefits agreements to ensure 100% clean power, strict noise limits, and minimal water usage, providing a $20 million fund for local development. Davis added that PJM and government actions are working to fix grid issues to prevent rolling blackouts, which could otherwise necessitate more frequent generator use. The experts agreed that policy choices, such as mandating batteries or non-emitting backup technologies, could mitigate these environmental and reliability challenges, avoiding a binary choice between power and pollution.