AI Push to Add $1.6 Billion to Maryland Power Bills, State Says
(Bloomberg) -- Maryland homeowners will pay an extra $1.6 billion on their electric bills over the next decade to subsidize grid costs to feed data centers, according to a state agency.
PJM Interconnection LLC, the largest US grid operator, is making Maryland customers cover the costs for transmission projects driven primarily by energy needs of data centers outside the state, Maryland’s Office of People’s Counsel alleged in a complaint to the Federal Energy Regulatory Commission. Homeowners are effectively subsidizing data-center growth due to the way PJM allocates costs to build those projects, said the agency that represents the interests of Maryland’s utility customers.
“Without FERC action, Maryland customers face paying billions for transmission infrastructure that PJM is advancing to benefit data centers,” People’s Counsel David Lapp said. “Maryland customers have neither caused the need for these billions in new transmission projects nor will they meaningfully benefit from them.”
A spokesperson for PJM didn’t immediately respond to a request for comment.
PJM, which serves 67 million people across 13 states, is facing a barrage of criticism from customers over skyrocketing bills amid a boom in AI data centers, while utilities have complained about the slow pace of matching supply with growing electricity demand. Rates have risen more than 50% in Maryland in the past five years, according to a US Chamber of Commerce report released on Tuesday.
The People’s Counsel argued that Maryland’s residential users will be on the hook to help fund PJM’s infrastructure build-out even though data center demand is beyond the state borders, with those customers bearing responsibility for $2 billion in capital expenditures.
The state agency asked the energy regulator to require PJM to take immediate action to assign data center-driven transmission costs to areas where the data center customers are located. Alternatively, the agency argues that — depending on its rule-making process for large power users — FERC should directly charge the transmission costs to the large data center customers.
The complaint comes within the same week that American Electric Power Co., one of the largest US utilities, said it was considering removing itself from PJM’s grid because it’s too slow in connecting new data centers to the operator’s network. That followed last year’s threat by Pennsylvania Governor Josh Shapiro, who said that his state would leave PJM if it didn’t make changes to rein in soaring power prices.
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