The PUC, in an effort to address the potential impact of data centers and other energy-intensive users on Pennsylvania’s electric grid, proposed in November a statewide model tariff that would serve as guidance for Electric Distribution Companies in connecting data centers and other large loads to the grid.
The Commission’s draft model tariff includes protections designed to shield everyday ratepayers from paying for the grid upgrades required to serve these large customers.
Unfortunately, several aspects of the Commission’s draft model tariff would be insufficient to protect other ratepayers from these costs and from the pollution caused by dirty fossil fuel generation to power large-load customers like data centers.
In their comment letter, the Sierra Club, Pennsylvania Stands Up, Vote Solar, Clean Air Council, POWER Interfaith, and Earthjustice recommended that that contracts between Electric
Distribution Companies and large load customers be long-lasting and strong enough to ensure that they pay for the portion of the electric grid upgrades that they benefit from, and that those contracts also require large load customers to be flexible and reduce load if needed during peak demand periods.
In addition, the community groups recommended that large load customers be required to invest in grid-enhancing technologies that benefit the grid as a whole, and that the Commission not incentivize dirty, carbon-emitting energy generation on site.
The community groups also expressed support for many of the proposals that the Commission put forward to address the cost impacts of data centers and other new large load customers.
In recent years, state utility regulators across the county have been addressing the potentially massive costs associated with data centers and other new large load customers through tariff proceedings, which establish standardized contract terms between utilities and data center customers.
The Commission’s model tariff, along with the community groups’ proposed amendments, would be an important step in protecting Pennsylvania ratepayers from these costs.
“Data center growth has already increased electricity costs by $20-$30 per month across the region, and with exponential growth being planned, there is no end in sight. These facilities are already straining the power grid and exposing neighbors to excessive pollution from backup generators. We applaud the PUC for taking this issue on, but much more needs to be done to protect electric consumers and vulnerable communities,” said Tom Schuster, Director of the Sierra Club Pennsylvania Chapter.
"This is an unprecedented moment for our electric grid. Infrastructure investments made at the behest of an AI-driven data center boom risk asking everyday consumers to underwrite massive new facilities—often before those projects even materialize. It is imperative that the public is not forced to pay for polluting infrastructure that serves a narrow set of corporate interests. Our focus must be on delivering a clean energy grid that serves everyone and meets the needs and challenges of tomorrow. Data centers have a responsibility to be part of that solution, they must bring new clean energy online to meet their demand and pay their fair share—without increasing costs or pollution for our communities,” said Kartik Amarnath, Mid-Atlantic Regulatory Director at Vote Solar.
“The addition of large loads to the grid poses threats to grid reliability, the environment, community health, and energy affordability in Pennsylvania. Well-designed large load tariffs have proven to be essential in protecting ratepayers from footing the bill for data center costs. The PA PUC must finalize a model tariff that appropriately protects ratepayers by ensuring large load customers pay their share, and that incentivizes large load customers to make investments that have reliability and environmental benefits for all customers,” said Caroline Weinberg, Senior Research and Policy Analyst at Earthjustice.
“All too often, average Pennsylvanians are forced to clean up the mess after boom and bust cycles of massive over-investment and subsequent abandonment. This has played out most recently in the natural gas fracking boom, and there’s the danger that it will happen again with the AI data center boom. We applaud the PUC efforts to establish a standardized tariff that prevents the offloading of infrastructure and other large-load-related costs to everyday electricity ratepayers. But we also believe these terms should be tightened, contract durations lengthened, and load flexibility and new clean energy use encouraged,” said Frank Arcoleo, Volunteer Advocate at Pennsylvania Stands Up.
“POWER urges regulators to recognize that hyperscale data centers pose unique risks —
concentrating costs, straining local infrastructure, and shifting economic burdens onto the public. Large load tariffs must reflect fairness, transparency, and the realities of modern data center operations. Tariffs should encourage clean energy usage, demand reduction during peak usage, and equity and fairness for environmental justice communities, rather than simply subsidizing hyperscale growth. The public should not bear the cost of infrastructure enhancements that primarily benefit data centers and their owners. Site selection must ensure equity and justice,
requiring meaningful participation from affected communities. Regulators must act to ensure that data center expansion prioritizes public interest over the interests of data center owners. The regulators must protect communities from undue costs while advancing a cleaner, fairer energy future,” said Steve Greenspan, Volunteer Advocate at POWER Interfaith.
“Pennsylvania families are already paying the price for data center buildout in the state. The PUC is taking a critical step towards ensuring stronger safeguards for average consumers, and can go even further by requiring data centers to invest in grid efficiency and clean, non-emitting energy generation. As energy prices continue to rise, Pennsylvanians should not be stuck paying more while data centers pay less. We need protections that support energy affordability, grid reliability, and a clean and healthy environment," said Alice Lu, MPH, Policy Analyst at Clean Air Council.
Click Here for a copy of the comments.
Click Here for the group’s announcement.
For more information or if you would like to be put in touch with someone available for an interview, please contact Devin McDougall, dmcdougall@earthjustice.org or call (267) 690-5595.
Resource Links:
-- Scranton Times Chris Kelly Opinion: Welcome To ‘Data Center Valley’ - 84 A.I. Data Center Structures Proposed In Lackawanna County [PDF of Article]
-- In Case You Missed It: A.I./Data Center Articles - NewClips From Last Week - December 22 [PaEN]
Related Articles This Week:
-- DEP To Host Jan. 6 Public Information Meeting On Water Quality Permits For The A.I. Data Center Proposal In Archbald Boro, Lackawanna County [Some Of The 84 Data Center Buildings Proposed In NE PA] [PaEN]
-- PA Energy, Environmental, Citizen Advocates Call On PUC To Protect Ratepayers, Communities From Costs, Impacts Of A.I. Data Centers [PaEN]
[Posted: December 23, 2025] PA Environment Digest
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