‘Beyond the Headlines’: How Delaware is responding to the data center boom

Olivia Marble, Spotlight Delaware's land use reporter, discussed Delaware's proactive approach to regulating the burgeoning data center industry and its significant impact on energy markets and local communities. The rapid growth of data centers, largely driven by artificial intelligence, has amplified concerns about their substantial electricity consumption, potential increases in electricity prices for residents, and the physical footprint of these large industrial facilities. Independent analyses indicated that if 2.4 gigawatts of proposed data centers were built without new power generation, wholesale electricity prices could potentially rise by as much as 80%.

The Delaware General Assembly responded by passing several key bills. House Bill 445 mandates that new data centers must either provide their own power supply or fund new power generation to support their operations. An initial version requiring in-state generation was amended to allow projects in neighboring states and count upgrades to existing power plants, making the bill more practical. Senate Bill 326, which caps the amount of infrastructure spending Delmarva Power can pass on to customers, also passed despite initial lobbying efforts against it by the utility. Governor Matt Meyer publicly endorsed SB 326, contributing to its bipartisan support driven by concerns over affordability. Additionally, House Bill 233 was passed, requiring the Public Service Commission to negotiate service agreements with large data centers.

Beyond state-level actions, local governments are implementing their own regulations. New Castle County adopted the state's first data center-specific regulations, which include a 1,000-foot setback requirement. Kent County Levy Court is considering proposed regulations that feature a 55-decibel noise limit and a 300-foot buffer, controversially classifying data centers as a permitted use in industrial zoning districts, which could reduce opportunities for direct public review. The article also notes a significant shift in the Delaware Public Service Commission's approach, particularly under Governor Meyer's recent appointees, demonstrating a more assertive stance against utilities like Delmarva Power regarding rate increases, reflecting a broader regional trend toward greater utility accountability.

Sussex County is also engaging in informal discussions about potential regulations, with the Delaware Electric Cooperative, which serves much of the county, expressing concerns that a single large data center could consume as much electricity as all its existing members, potentially altering the cooperative's governance structure.