Pennsylvania State Senator Katie Muth will soon introduce legislation to prevent Pennsylvania residents and small businesses from subsidizing energy costs driven by large data center operations.
The proposal is modeled on Oregon’s recently enacted POWER Act (HB 3546), which established a dedicated rate class for high load data centers and required them, not residents or small businesses, to fully cover the cost of their infrastructure buildout and operations, she noted in a July 25 memo posted on her website.
Under Oregon’s bipartisan POWER Act, facilities with a peak demand of 20 megawatts or more are designated as “high load customers” and are required to pay the full incremental costs of energy and grid upgrades. The law also gave regulators the authority to prevent cost-shifting and protect residential customers from rate increases.
“My legislation will mirror Oregon’s POWER Act by creating a dedicated High-Load Customer Class in Pennsylvania that will apply to new or expanding data centers with a peak demand of 20 megawatts (MW) or more,” Muth, a Democrat, said.
The legislation will also mandate Cost-Responsibility Contracts for all data center facilities, including power plants for co-located data centers (co-location is the practice in which data centers are built next to an existing power plant and share interconnection with the grid) requiring long-term service agreements of no less than 10 years to ensure facilities cover the full infrastructure costs they generate.
The legislation will also empower the Pennsylvania Public Utility Commission to set cost-allocation rules, monitor compliance, and protect non-industrial customers from rate increases.
Finally, this legislation will require annual reporting of electricity and water usage to support community transparency and grid planning.
“This legislation will protect ratepayers by preventing unfair cost-shifting onto residents, small businesses, schools, and local governments by ensuring that data center infrastructure is funded by the entities that develop, operate and benefit from them. This legislation will help build public trust and ensure utility rate equity by keeping costs stable and affordable,” Muth said.
Muth is asking her colleagues in the State Senate to co sponsor “this important legislation to ensure Pennsylvania residents and small businesses are safeguarded from subsidizing the exponential energy costs of hyperscale data centers.”
