DeFrank said in his testimony the PUC is “currently working on a proposed model tariff aimed at addressing characteristics such as appropriate MW size for tariff designations, financial security requirements, minimum contract terms, early termination fees, maximum interconnection study times, load ramping, and best practices from other jurisdictions.”
In response to questions, DeFrank said, “I have not seen the staff that's working on it, [but] one of the things that I've always espoused for is, again, making sure we're protecting our existing ratepayers from stranded costs.
‘So how do you do that? You’ve got to make sure the load's coming.
“As we talk about [A.I. ] development, I always talk about this isn't a strip mall here. We're not talking about curb cuts and turning lanes.
“This is hundreds of millions of dollars of infrastructure required to serve these entities, mostly in transmission infrastructure, so we want to make sure that the ratepayer is insulated from that.
“Because when we're dealing with data centers, it's all about speed to market, how quickly we can get connected and up and running.
“So if the end user's willing to do a lot of the infrastructure build out on their own dime, their own expense, we should espouse that.
“If we get people connected quicker and they're doing the build out, we're insulating the ratepayer then from potential stranded costs, so that's just one idea of how to insulate the ratepayer to make sure they're not paying for something that never comes to fruition.”
Load Projections
DeFrand said, “The most important thing is we have to keep the lights on. We have to make sure that we have enough power to serve our needs, so that's first and foremost and that's what led to our tech conference that we had last November.
“Coming out of that tech conference, as I said, was the en banc hearing to develop a model tariff, but we're also engaging in an RFP [request for proposal] to look at what our low projections are and if we have enough supply.
“ I do think that some of the projections that are out there are probably a bit inflated. When you look at some of the numbers out there, I'm not sure that they justify some of the projections that are out there.”
“I think you got to remember that we go beyond Pennsylvania. We are in a regional grid, so what happens in Maryland, what happens in Ohio, what happens in New Jersey affects us in Pennsylvania.
“So that's one of the reasons why I think this is an opportunity. As I said, we're long on generation in Pennsylvania, meaning we have excess capacity.
“However, if we see these developments happening in other states, that's going to be Pennsylvania power shipped into those other states to serve those entities.”
Affordability
“Again, [Pennsylvania is] in a restructured market, so our electric bills, there's two different sides of them.
“There's the generation component and there's the distribution component.
“The distribution side is what's regulated, the generation side is not, which means you can shop for your own electric supplier or decide with the default supply of your electric company.
‘When we look at those prices, and that's the increase you're talking about at the PJM marketplace, that's difficult to deal with because what that is is the supply and demand paradigm.
“We're seeing increased demand with reduced supply, so that's why you're seeing those prices jumping there with that regard.
“The way we address that is, first off, we need more generation, there's no question about it, but I also talk about it being an ‘all of the above approach.
“Demand response, we need to reduce peak demand times. You are not going to be able to build yourself [generation] to meet peak demand. It becomes very expensive if you do that.
‘You realize, many of our costs when we look at our costs are driven by 20 or 25 hours a year, and sometimes it's over several years, so how we meet the needs in those small times of the year when the grid is most stressed is what drives cost for ratepayers. So that's on the generation side.
Distribution Costs
“On the distribution side, that's what we regulate at the PUC, and this increased load can actually drive down distribution rates because a distribution rate is nothing more than a price per unit.
“So if you drastically increase your units and minimally increase your costs to serve those units, the price per unit will come down.
“So this increased load on the one side of the bill can bring it down. On the other side of the bill though, it's raising it and that's because of the demand-supply issue.”
Click Here for a copy of the Chairman’s written testimony.
Click Here to watch a video of the hearing.
Resource Links - A.I. Data Centers:
-- Guest Essay: Rewriting The Energy Story — Together - By Stephen M. DeFrank, Chairman, Pennsylvania Public Utility Commission [7.23.25]
-- PUC: Brace For Higher Electric Bills As A Result Of Soaring Power Use; Consumers Should Review Energy Options [7.25.25]
-- PJM Electricity Auction: PJM Lost 2.8 Gigawatts Of Power Due To Reduced Reliability Rating Of Natural Gas Power Plants; Could Gain 12.2 Gigawatts By Increasing Reliability From Less Than 75% Now To An Achievable 90% [7.31.25]
-- PJM Electric Auction Impacts: 1 In 5 PA Households Report Problems Now Paying Energy Bills; Electric Utility Shutoffs Up 38.1% So Far This Year [7.30.25]
-- What The A.I. Data Center & Energy Summit Missed: Exploding Electricity Demand Already Raising Prices - Ratepayers Need Protection; No Longer An ‘All Of The Above’ Energy Strategy [7.22.25]
-- What The A.I. Data Center & Energy Summit Missed: It’s Deja Vu - False Promises, Dirty Power - Our People And Communities Deserve Respect [7.22.25]
-- Senate Hearing: To Communities Facing Rapid A.I. Data Center Development: Review Your Zoning Ordinance NOW, Before It's Too Late To Have Meaningful Siting, Mitigation Conversations [8.12.25]
-- Senate Hearing: DEP Primer: Recurring Challenges Of A.I. Data Centers: Frequent Site Plan Changes, Inconsistent Zoning, Outdated Sewage Facilities, Limited Community Outreach [8.12.25]
-- Senate Hearing: Susquehanna River Basin Commission - A.I. Data Centers Have A Dramatic Demand For Water, And The Potential To Be Among The Largest Water Consumers In The Basin [8.13.25]
Related Articles This Week:
-- PUC Chairman: Model Tariff For Connecting A.I. Data Centers To Local Electric Grid To Be Published For Comment By End Of September [PaEN]
-- Southwest PA Environmental Advocates Urge Bigger Voice For Renewable Energy At A.I. Horizons Summit In Pittsburgh On Sept. 11 [PaEN]
-- Water At Risk: What Is Your Township's Plan For A.I. Data Centers? Sept. 15 Hearing In Tobyhanna Twp., Monroe County - By Carol Hillestad for Brodhead Watershed Association [PaEN]
-- Protecting Clean Water Together: Electric Bills Increased 10-20% Since June - Community Solar Could Be A Solution - By Carol Hillestad for Brodhead Watershed Association [PaEN]
-- Independent Fiscal Office Reports 2nd Quarter Increase In Natural Gas Production, New Wells And 60.8% Increase In Price Of Gas Over Last Year [PaEN]
-- Utility Dive: Rising Natural Gas Prices Expected To Drive Up Electricity Costs
-- PUC Commissioners Urge PA Congressional Delegation To Support Low-Income Energy Assistance - LIHEAP [PaEN]
NewsClips:
-- Pittsburgh Business Times: A.I. Horizons Summit Sept. 11-12 With Tech And Energy Execs, Political Heavyweights [PDF of Article]
-- Post-Gazette: Pittsburgh’s Labor Leaders Say They’re Ready For US Steel, A.I. Data Center Investments, Will The Money Come Through?
-- Scranton Times: State Lawmakers Hear Potential Impacts Of A.I. Data Centers At Scranton Hearing
-- WNEP: State Lawmakers Held Roundtable Discussion On Proposed A.I. Data Centers In Scranton
-- York Dispatch: Is A.I. Data Center Demand Too Much For A Delicate Electricity Grid In PA? York County Is A Fertile Area For Data Center Development [PDF of Article]
-- PA Capital-Star/Public Source: A.I. Data Center Growth Raises Pittsburgh-Area Hopes, But Community Benefits Aren’t Guaranteed
-- WITF: PA Lawmakers Look Underground For Geothermal Alternative To Cool A.I. Data Centers
-- Inquirer: Why This PA-Based Builder Is Shifting To A.I. Data Centers
-- The Center Square: A.I. Ethics: Bridging The Gap Between Public Concern And Global Pursuit
-- Pittsburgh Business Times: Democratic PA House Members Propose Reduction In Nuclear Reactor Fees Paid To DEP To Support Radiation Monitoring, Inspections, Oversight Based On Reactor Size [PDF of Article]
-- Utility Dive: DOE: PJM Faces Possible Long-Term ‘Energy Emergency;’ Consumer Advocates Say A ‘Concern’ Is Not An ‘Emergency’
[Posted: September 2, 2025] PA Environment Digest
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