FERC fails to shield PJM consumers from data center transmission costs: ratepayer advocates

Federal regulators are facing pushback over a plan meant to keep everyday electric customers from covering the grid costs of new data centers. Last month, the Federal Energy Regulatory Commission (FERC) told PJM Interconnection, the grid operator for 13 Mid-Atlantic and Midwestern states plus Washington, D.C., that its rules for connecting large power users like data centers to the grid appeared unfair, partly because regular households may be footing part of the bill for transmission upgrades those data centers require.

Now ratepayer advocates from Delaware, Illinois, Maryland, Ohio and Pennsylvania say FERC's order doesn't go far enough. They argue it fails to fix how costs for grid upgrades get spread across a whole region, meaning households could still end up paying for infrastructure built mainly to serve data centers. The advocates want FERC to require that data centers cover the full cost of any upgrades needed to connect them, and to act quickly, since PJM has 60 days to respond to the original order, with a possible 90-day extension.

For homeowners in PJM's territory, this is a dispute about who pays for the wires and equipment upgrades driven by the data center boom, not something with an immediate bill impact. But it's worth watching: if these advocates don't succeed in tightening the rules, the added transmission costs from data center growth could eventually show up in electric rates for ordinary customers in these states.