Rising electricity costs and data center growth pressure Philadelphia households
Electricity costs are rising for Philadelphia families, partly due to increasing demand, with data centers identified as significant energy consumers. Local residents and environmental groups are opposing data center expansion and advocating for a three-year moratorium on new construction until the city develops specific regulations. The Governor has issued an executive order requiring local approval and cost-shifting protections for new data center installations statewide.
Philadelphia families are facing increased electricity costs, adding strain to household budgets already challenged by other necessities. PECO, the region's primary electric utility, acknowledges the higher energy bills, attributing them to growing electricity demand and limited energy supply across southeastern Pennsylvania. The Pennsylvania Public Utility Commission Chairman, Steve DeFrank, cited various factors contributing to utility industry turbulence, including data center development.
Energy affordability has become intertwined with the potential growth of electricity-hungry data centers in Philadelphia. While the city currently has eight smaller data centers, no hyperscale AI data centers have been built, though two locations, the Bellwether District and property near Northeast Philadelphia Airport, have been identified for potential development. This prospect has sparked opposition from residents and environmental groups.
On September 14, approximately 100 people rallied outside Philadelphia City Hall, organized by the No Data Centers in Philly coalition, demanding a three-year moratorium on data center construction. This pause would allow the city to develop specific zoning laws and regulations, which currently do not exist for data centers. Sonya Sanders of Philly Thrive emphasized the need for city officials to protect communities from potential impacts on electricity affordability and pollution.
In response to these concerns, PECO stated it is implementing measures to ensure large energy users, including data centers, pay upfront for necessary infrastructure upgrades, aiming to prevent residential and small-business customers from bearing these costs. Additionally, Governor Josh Shapiro signed an executive order in August, requiring local approval for new data center installations statewide and implementing policies to prevent infrastructure costs from being passed on to other customers. Philadelphia City Council President Kenyatta Johnson is reportedly engaged in discussions regarding the future of data centers in the city.