Data Center Boom Driving Up Electric Rates
Electricity demand is surging in PA, thanks to the data center boom. According to the EIA, in 2024 they used more electricity in PA than homes and businesses combined! And that’s partly why both utility and electric supplier rates have risen in the last year.
With more data centers waiting in the wings, PA lawmakers are scrambling to bring down electricity rates. However, PA data center regulation could face an unlikely foe in the Federal Regulatory Commission (FERC).
Data Center Drain in PA
AI data centers are already straining the PJM grid. During the most recent capacity auction, PJM barely got enough electricity to supply the region. Plus, PJM expects another 30 GW of power demand from data centers by 2030.
Data center demand is also pushing up home electric rates right now. For example, PECO and PPL are both asking for rate hikes. And these hikes would fund grid upgrades to meet data center demand. But, utilities also earn a profit on these investments. As a result, even if you shop for the best energy supplier, the utilities can pass these costs on to you in your bills.
PA Lawmakers Take On Rising Electric Costs
To be sure, state lawmakers are not standing by idly. Last month, the House passed a bill to help regulate data centers. House Bill 1834 charges the PA PUC with setting rules to help stop rising electricity rates due to data centers. Among other things, it would stop electric companies from passing on data center costs to ratepayers. The bill is still waiting on state Senate approval.
However, Gov. Shapiro is taking a different approach. The governor seeks to fast-track new electric generation. By funding and approving projects that can quickly get up and running, they can add more energy to the grid. In this way, they hope to bypass the slow PJM Interconnection queue and lower electricity rates.
Meanwhile, state Republicans have proposed a bill that would fast-track data centers that bring their own power. This way, data centers wouldn’t raise demand on the grid. However, this bill would also remove permitting authority from local governments concerned about water usage and air quality. Instead, permitting would be placed it in the hands of a small, state-run board. So, while it’s a controversial idea, Gov. Shapiro says he approves it.
Feds Fight for Data Centers Despite Controversy
All of this could be for nothing. President Trump is pushing for data center development. And he’s using FERC to do it. Traditionally, FERC is in charge of the costs and reliability of interstate power markets. However, states handle generation and local power lines. But FERC is expected to make a proposal soon, to push for more AI data centers. And that new federal policy could step right over state’s rights to do it.
But data centers and the projects needed to support them, are facing more local opposition. Rising energy costs, land and water use, power line projects, and noise are all concerns. And as more people protest data centers sprouting up in their back yard, these projects are being delayed or rejected.
Stay Ahead of Rising Electricity Rates
As lawmakers try to find an answer, it’s important to save where you can on your electric bills. Locking in a low fixed rate electric plan now is one of the best ways to start. So compare rates, read reviews, and shop https://www.paenergyratings.com to see the electric plan deals in your area.