Maryland Lawmakers Urge Federal Regulators to Stop Shifting Data Center Costs to State Ratepayers
Maryland's Democratic congressional delegation is urging the Federal Energy Regulatory Commission (FERC) to prevent an estimated $1.6 billion in electricity transmission costs, driven by out-of-state data centers, from being passed on to Maryland ratepayers. The lawmakers argue that PJM Interconnection's cost-allocation rules are unjust and should be revised, supporting a complaint filed by the Maryland Office of People's Counsel. They are concerned about rising electricity bills and the financial burden on residents for infrastructure serving large AI data centers.
Maryland's Democratic congressional delegation has called on the Federal Energy Regulatory Commission (FERC) to intervene and prevent an estimated $1.6 billion in electricity transmission costs, largely driven by the expansion of hyperscale data centers in neighboring states, from being unjustly allocated to Maryland households and businesses. In a letter to FERC, U.S. Sens. Chris Van Hollen and Angela Alsobrooks, along with U.S. Reps. Steny Hoyer, Kweisi Mfume, Jamie Raskin, Glenn Ivey, Sarah Elfreth, April McClain Delaney, and Johnny Olszewski, urged the commission to compel PJM Interconnection to revise its current cost-allocation methodology.
The lawmakers' appeal supports a complaint filed by the Maryland Office of People’s Counsel in FERC Docket EL26-63, which challenges PJM’s existing rules. They contend that the rapid growth of AI infrastructure has necessitated approximately $22 billion in transmission projects across PJM's service area, with roughly $2 billion of those costs already assigned to Maryland ratepayers. Without FERC's timely intervention, Maryland customers could bear an additional $1.6 billion over the next decade, with residential households potentially paying an average of $345 each.
The delegation emphasized that PJM's rules have failed to adapt to the unprecedented electricity demands of hyperscale data centers, which can consume as much power as a small city. They expressed concern that Maryland regulators lack the authority to make out-of-state developers pay for the infrastructure their projects necessitate, and warned that future data center demand could exacerbate this financial burden. They also highlighted public opposition to data centers due to concerns about energy consumption, water use, environmental impacts, and rising electric bills, citing a Gallup poll where 71% of Americans oppose such developments in their local communities.
While acknowledging FERC's recent directives to PJM and other grid operators to review cost allocation for large electricity users, the Maryland delegation stressed that these orders only address future projects and do not resolve the billions in costs already assigned to Maryland customers. They urged swift commission action to prevent these costs from appearing on customer bills and ensure just and reasonable energy costs for their constituents.